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34–834 PDF 2007

FULL COMMITTEE LEGISLATIVE HEARING ON

ENERGY, VETERANS ENTREPRENEURSHIP,

AND THE SBA’S ENTREPRENEURIAL

DEVELOPMENT PROGRAMS

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF 

REPRESENTATIVES

ONE HUNDRED TENTH CONGRESS

FIRST SESSION

MAY 16, 2007

Serial Number 110-22

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house 

HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

WILLIAM JEFFERSON, Louisiana 

HEATH SHULER, North Carolina 

CHARLIE GONZA ́ LEZ, Texas 

RICK LARSEN, Washington 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

HENRY CUELLAR, Texas 

DAN LIPINSKI, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

BRUCE BRALEY, Iowa 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

STEVE CHABOT, Ohio, Ranking Member 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

STEVE KING, Iowa 

JEFF FORTENBERRY, Nebraska 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KEVIN FITZPATRICK, Minority Staff Director

STANDING SUBCOMMITTEES 

Subcommittee on Finance and Tax

MELISSA BEAN, Illinois, Chairwoman 

RAUL GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JOE SESTAK, Pennsylvania 

DEAN HELLER, Nevada, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Contracting and Technology

BRUCE BRALEY, IOWA, Chairman 

WILLIAM JEFFERSON, Louisiana 

HENRY CUELLAR, Texas 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

JOE SESTAK, Pennsylvania 

DAVID DAVIS, Tennessee, Ranking 

ROSCOE BARTLETT, Maryland 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma

(II) 

Subcommittee on Regulations, Health Care and Trade

CHARLES GONZA ́ LEZ, Texas, Chairman 

WILLIAM JEFFERSON, Louisiana 

RICK LARSEN, Washington 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

BILL SHUSTER, Pennsylvania 

STEVE KING, Iowa 

MARILYN MUSGRAVE, Colorado 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

JIM JORDAN, Ohio

Subcommittee on Urban and Rural Entrepreneurship

HEATH SHULER, North Carolina, Chairman 

RICK LARSEN, Washington 

MICHAEL MICHAUD, Maine 

GWEN MOORE, Wisconsin 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

HANK JOHNSON, Georgia 

JEFF FORTENBERRY, Nebraska, Ranking 

ROSCOE BARTLETT, Maryland 

MARILYN MUSGRAVE, Colorado 

DEAN HELLER, Nevada 

DAVID DAVIS, Tennessee

Subcommittee on Investigations and Oversight

JASON ALTMIRE, PENNSYLVANIA, Chairman 

CHARLIE GONZA ́ LEZ, Texas 

RAUL GRIJALVA, Arizona 

LOUIE GOHMERT, Texas, Ranking 

LYNN WESTMORELAND, Georgia

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1

Chabot, Hon. Steve .................................................................................................. 2

Sestak, Hon. Joe ...................................................................................................... 4

WITNESSES 

PANEL 

Goldstein, Wilma, Acting Assistant Administrator for the Office of Entrepreneurial Development, United States Small Business Administration ............. 5

Rowe, C.E. Tee, Associate Administrator of Congressional Legislative Affairs, 

United States Small Business Administration .................................................. 8

Higgins, Gregory L. Jr., Pennsylvania Small Business Development Centers .. 9

John, David L., New Mexico SBDC Statewide Advisory Council ........................ 12

Wrigley, Barbara, Women’s Business Center of Northern Virginia .................... 14

Sklar, Scott, Committee of the Sustainable Energy Coalition ............................. 16

APPENDIX 

Prepared Statements: 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 31

Chabot, Hon. Steve .................................................................................................. 33

Sestak, Hon. Joe ...................................................................................................... 35

Altmire, Hon. Jason ................................................................................................. 37

Goldstein, Wilma, United States Small Business Administration ...................... 38

Higgins, Gregory L. Jr., Pennsylvania Small Business Development Centers .. 45

John, David L., New Mexico SBDC Statewide Advisory Council ........................ 50

Wrigley, Barbara, Women’s Business Center of Northern Virginia .................... 52

Sklar, Scott, Committee of the Sustainable Energy Coalition ............................. 55

(V) 

(1)

FULL COMMITTEE LEGISLATIVE HEARING 

ON ENERGY, VETERANS ENTREPRENEURSHIP, AND THE SBA’S ENTREPRENEURIAL 

DEVELOPMENT PROGRAMS 

WEDNESDAY, MAY 16, 2007

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. Nydia Vela ́zquez 

[Chairwoman of the Committee] presiding. 

Present: Representatives Vela ́zquez, Jefferson, Shuler, Cuellar, 

Ellsworth, Johnson, Sestak, Chabot, Heller, and Jordan. 

OPENING STATEMENT OF CHAIRWOMAN VELA ́ ZQUEZ 

ChairwomanVELA ́ ZQUEZ. Good morning. I am very pleased to call 

this morning’s hearing on proposals to reauthorize the SBA’s entrepreneurial development programs to order. 

Over 400,000 new businesses are created each month during an 

outage year. As Americans pursue self-employment, most find it 

both a challenge as well as a rewarding adventure. Time and time 

again, entrepreneurs have found that strong sustainable enterprises result from steady commitment to developing a well-formulated business plan. The plans that are most likely to succeed are 

those that detail long-term strategies to obtain affordable capital, 

manage operational processes, and address human resources 

issues. 

As part of its mandate to ensure small business owners can be 

competitive in the marketplace, the Small Business Administration 

administers a portfolio of entrepreneurial development programs. 

These include small business development centers, women business 

centers, SCORE, Native American, and veterans’ business average 

programs. 

All of these initiatives support business development by providing counseling, technical assistance, research, and mentorship to 

entrepreneurs throughout the country. 

This program has a proven record of success. In fact, the businesses that utilize these initiatives are twice as likely to succeed. 

Over the past few years, as more and more Americans have decided to make their dreams of business ownership a reality, we 

have seen an increased demand for these services. Yet, despite the 

increasing need for entrepreneurial development initiatives, this 

program has not been modernized in the past six years. 

2

Today’s hearing will provide us with an opportunity to examine 

five proposals that aim to enhance these programs. The modifications will establish new initiatives and improved program operations to effectively fulfill the needs of small businesses. Most importantly, the proposals enable SBA programs to assist the next 

generation of entrepreneurs. By tailoring proposals to the current 

economic demand facing small businesses and the emerging sector 

of entrepreneurs, this initiative will promote business development 

in communities nationwide. 

The face of small business is changing today. Over the past two 

decades, women-owned businesses have increased at twice the rate 

of all firms. We are also seeing more minority entrepreneurs. In 

2002, they owned 18 percent of all small firms. Veterans represent 

14 percent of small business owners. And that number only continues to grow as more return from Iraq and Afghanistan. 

A key component to ensuring SBA’s entrepreneurial development 

programs are effectively assisting entrepreneurs is not only making 

sure the needs of these growing sectors are being met but also that 

changing economic conditions are being accounted for. 

Today entrepreneurs are being hit with a whole new set of challenges different from the ones many struggle with, even if they get 

a goal. To address these challenges, the proposal before us creates 

a new subprogram within the SBDC program to help entrepreneurs 

deal with health care, energy, tax, and regulatory costs. 

We are also expanding the number of veterans’ business centers 

and restructuring the women’s business centers to open additional 

spaces. Part of the proposal also includes launching a new initiative to help senior citizens who are interested in becoming a small 

business owner to get those ventures off the ground. 

The proposal before us today provides SBA entrepreneurial development programs with a capacity to develop training, technology, and informational resources to ensure small businesses can 

address their specific challenges. 

This process to modernize SBA’s entrepreneurial development 

programs has evolved from lessons learned. They will be revisited 

as we continue to look for ways to strengthen the entrepreneurial 

sector. 

To support business ownership in the Twenty-First Century, it is 

critical that we build upon an already strong foundation. Making 

this change is a first step toward ensuring our small business owners have what they need to keep this economy strong for generations to come. 

I now recognize Ranking Member Chabot for his opening statement. 

OPENING STATEMENT OF MR. CHABOT 

Mr.CHABOT. Thank you, Madam Chair. And I want to thank you 

for holding this hearing to review the entrepreneurial development 

programs administered by the Small Business Administration, the 

SBA. 

I also want to thank our witnesses for their testimony that we 

will be hearing here shortly. I know we look forward to hearing 

their views on the legislation that the Committee will be considering in next week’s markup also. 

3

The SBA’s entrepreneurial development programs can play an 

important role in helping small business owners succeed. These 

programs range from narrowly targeted programs to very broad 

programs that take advantage of the resources of America’s higher 

education system and retired business executives. 

The programs that we’ll be considering today, SCORE, the small 

business development centers, and women’s business centers, 

haven’t been reviewed, it’s our understanding, by this Committee 

since 2003. So it’s certainly timely that we do this, and I want to 

commend you for doing this. 

It’s important to ensure that these programs are doing what 

they’re intended to do, which is help small business men and business women. We will also be looking at proposals to increase veterans’ entrepreneurial opportunities, ways to improve the SBA’s 

Native American outreach, and potential changes to the Small 

Business Investment Act that would increase investment in renewable energy technology development by small businesses. 

As anyone who has bought gas in the last few weeks knows, 

prices at the pump are over three dollars a gallon. And that’s just 

unacceptable. In my view, the most effective solution to this problem is to increase domestic oil production in the outer continental 

shelf, for example, and in ANWAR and to improve this nation’s 

ability to refine crude oil into gasoline while we work on developing 

promising new technologies that will serve us in the future. 

Regardless of where one stands on the energy debate, I think we 

can all agree that it’s critical that we become much more energyindependent as quickly as possible. 

I want to again thank Chairwoman Vela ́zquez for this opportunity to thoroughly review the SBA’s entrepreneurial development 

programs and look forward to working with her in strengthening 

them. 

And I yield back. 

ChairwomanVELA ́ ZQUEZ. Thank you, Mr. Chabot. And I also 

would like at this point to recognize any member who has been 

working on this proposal from both sides of the aisle. If you wish 

to be recognized, I will do so now. 

Mr. Shuler? 

Mr.SHULER. Madam Chair, Ranking Member Chabot, thank you 

for holding this hearing today. I am particularly pleased that we 

are considering Small Energy Efficiency Business Act. Small businesses are the first to be affected by the rising energy prices. And 

small business will be the first to find the solution. 

This bill will give them the tools that they need to lead our nation in energy efficiency and independence. And I want to commend 

the two of you again for your hard work and your dedication in 

truly making this Committee what it should be and continue to be 

a very active part of our small business environment and throughout our whole society commend both of you for your hard work and 

dedication. 

ChairwomanVELA ́ ZQUEZ. any other member who wishes to be recognized at this point? Mr. Sestak? 

4

OPENING STATEMENT OF MR. SESTAK 

Mr.SESTAK. Thank you, Madam Chair and Ranking Member 

Chabot. 

I would like to take a few moments and follow up. Let me speak 

on a piece of legislation that I will be introducing later this week. 

And it’s to enhance two important Small Business Administration 

programs: the SBDCs and the Service Corps for Retired Executives, 

SCORE. 

I serve as a representative in a district that is economically driven by a very vibrant local small business economy. And so I am 

very appreciative of the entrepreneurial assistance that SBA provides. 

We know that the entrepreneurial development assistance programs do work, as Madam Chair had mentioned. And, as she had 

said, this entrepreneurial assistance, businesses that gain this type 

of assistance are twice as likely to succeed. In addition, for every 

federal dollar that is spent on entrepreneurial development, it generates seven dollars in increased tax revenue. 

However,in the past three years, my district has actually lost 607 

small businesses. And, in fact, one out of five manufacturing establishments have disappeared. 

The trend I am committed to reversing and fostering entrepreneurial development and creating the right conditions to help businesses flourish, stay, and be attracted to the district. 

I know that in 1980, Congress actually took the step forward and 

established the SBDC program to do exactly what is needed, to foster economic development by providing the managerial, technical, 

and research assistance to both current and prospective small businesses. 

As you know, SBDCs do provide services which include, but 

aren’t limited to, assisting small business financial marketing, organization engineering, technical problems, and other types of feasibility studies. 

The SBDC program also represents an efficient and effective use 

of allocated monies from the federal government to both I think 

particularly important public and private ventures in collaboration. 

To that end, SBDCs are funded by matching monies by state legislatures, local Chambers of Commerce, and technical schools and 

other institutions. In fact, it seems to go so well that we find that 

we are exceeding the minimum 50 percent matching share now. 

I am very fortunate that both Widner, University of Penn, Mr. 

Higgins, as you well know. We have near my district. With all of 

that in mind, I see that while there are SBDCs, programs that are 

extremely effective, I do think there are certain operational improvements that could be implemented that help increase the flexibility of SBDCs to better support small businesses and entrepreneurs. 

And to that end, the changes that I will be proposing in legislation to help ensure the quality of grants will be those that do the 

following: ensure the quality of grant recipients to host SBDCs, to 

help SBDCs maintain their autonomy from undue SBA interference, to protect the confidentiality of SBDC clients, and ensure 

that taxpayers’ dollars are being spent as efficiently as possible by 

5

not using SBDC funds except for the sole purpose of business development. 

And by allowing exemptions to deter and cap on non-matching 

portability grants in the bed of federally designated natural 

human-caused disasters, I also think it’s important to strengthen 

SBDC core program by establishing specific grant programs that 

will allow SBDCs to tailor their services to meet the particular 

needs of their business constituencies; for example, the capital access initiative, which will establish grants to assist entrepreneurs 

in processing loan applications and attaining private equity. 

An innovation and competitiveness initiative, which will establish grants to allow SBDCs become technology centers to help market technologies and advanced products to manufacturers; and a 

disaster recovery program to establish grants to allow SBDCs to 

assist and coordinate the federal response for small disaster victims. 

There are others, which I won’t bother to go into now, such as 

the older entrepreneur assistance sustainability initiative and the 

national regulatory assistance initiative. 

The second program, which I won’t go into except to mention, 

SCORE, which, as you know, provides entrepreneurs free counseling assistance by former executives, is very important. And I believe it provides a valuable service to small businesses and can be 

even stronger with the provision to actively recruit volunteer mentors, who will then greater reflect the social and economic diversity 

of those who utilize SBA services. 

So, with that, I very much appreciate it, Madam Chair, to give 

me the opportunity to talk on this that we will introduce later this 

week. And I look forward to today’s hearings. 

ChairwomanVELA ́ ZQUEZ. Thank you. And I want to express my 

appreciation for members from both sides who have been working 

on these proposals. 

With that, we are going to start our hearing. I just want to express my appreciation to all of the witnesses, especially those who 

come up from across the country to be here today and share with 

us your insights on the differing issues that we are going to be 

dealing with. 

Our first witness is Ms. Wilma Goldstein. She is the Small Business Administration’s Acting Assistant Administrator for the Office 

of Entrepreneurial Development. 

Ms. Goldstein, you have five minutes to make your presentation. 

And you can enter your entire testimony into the record without 

objection. 

STATEMENT OF WILMA GOLDSTEIN, ACTING ASSISTANT ADMINISTRATOR FOR THE OFFICE OF ENTREPRENEURIAL DEVELOPMENT, UNITED STATES SMALL BUSINESS ADMINISTRATION 

Ms.GOLDSTEIN. Thank you. Thank you, Chairwoman Vela ́zquez, 

Ranking Member Chabot, distinguished members of the Committee, for your invitation and the opportunity to share with this 

Committee the work of the Small Business Administration’s Office 

of Entrepreneurial Development and what we are doing to help 

serve America’s entrepreneurs in small business. 

6

I am Wilma Goldstein, as Chairwoman Vela ́zquez said. And on 

behalf of Administrator Preston, I am pleased to be here to share 

with you the operations and successes of SBA’s programs and to 

briefly discuss with you some of our plans for the future. 

The Office of Entrepreneurial Development manages a strong 

distribution channel of service centers that provide business and 

management assistance to people who need guidance on how to 

start, grow, or better manage their small businesses. We do that 

through our three resource partners, who have been mentioned 

while we have been here this morning: small business development 

centers, women’s business centers, and SCORE. 

In F.Y. 2006, our resource partners trained and counseled over 

1.2 million clients. In addition, 315,154 to be exact clients registered for one of our 23 courses offered online through our small 

business training network, SBTN. And over 12 million new visitors 

accessed the SBA Web site. 

SBA and, in particular, ED, has long recognized the value in 

being able to measure and validate the work that we do. One important way we can now measure our programs is through the data 

collected in the entrepreneurial development management information system known as EDMIS. We collect that data quarterly from 

each of our resource partners telling us how many they have 

trained and counseled. 

F.Y. 2006 marked the completion of the first full year of EDMIS 

implementation with all of our programs. If you will allow me a 

slight digression, I just want to add that I am extremely proud to 

be associated with the group that got EDMIS up and running. 

In the first half of its second year, I can report that it is running 

smoothly. We still monitor it regularly with conference calls between headquarters and our resource partners about once a month. 

And we are in the process of looking at upgrades so that we can 

do more with it than gather information. 

A further commitment on our part to assessing our performance 

is the impact survey. Interviewing is now beginning on the fourth 

year of this longitudinal study. And we continue to find that businesses that receive management assistance from SBA’s resource 

partners give it high ratings to the usefulness of that assistance. 

Let me also touch briefly on our small business training network, 

which is our online training vehicle. It is having a banner year. 

And I thin you will be pleased to hear the following. We now have 

more than 25 free online business courses. 

We introduced this year the small business primer, which is an 

interactive assessment tool to help people determine their readiness for starting a business and guide them to the training they 

may need to be better prepared. 

We have partnered with Capital Access and government contracting to other parts of the SBA to create similar online assessment tools for community express loans and the 8(a) program. 

Then much has been said already about modernization. And I 

want to tell you about one way that we are trying to help our resource partners keep up with changing technologies. 

This coming week all three of our resource partners and SBTN 

are holding a technology summit here in D.C. Knowing that some 

of our centers with smaller budgets have difficulty keeping up with 

7

advances in technology, we sponsored a competition for new ideas 

in technology. We would be featuring the winners. And each will 

be questioned by a panel of experts. We hope this will become an 

ongoing event and the result would be that we will find ways to 

help our centers make better and more affordable technology decisions. 

We had a good year in ED, in which all the programs produced 

better that expected counseling and training numbers, which we 

provide to the Congress each year. So let me just mention a few 

things that go beyond those numbers. 

SBDC is proud of its many changes and improvements. I would 

like to mention two in particular. In anticipation of the need for all 

of us to expand our reach to veterans, the New York Veterans Outreach Program was implemented and during the past five years 

has counseled and trained over 8,000 veterans, many of them Service-disabled. 

The New York SBDC also recently developed EntreSkills for Veterans, a comprehensive interactive educational tool developed by 

veterans for veterans and members of the Reserve and National 

Guard. 

Before I conclude my testimony, I just want to very briefly communicate for the Committee’s consideration some of our legislative 

proposals that we believe will bring greater efficiencies to the operation of our programs as well as enhance and expand our client 

services and base. 

In our F.Y. 2008 legislative package, SBA requests that the Committee provide SBA with authorization to have full access to client 

information obtained by the SBDCs as part of their SBDC program 

administration that allows us to continue doing the impact survey. 

Such access will allow SBDA to more effectively manage the program and to measure the program impact through client surveys, 

and their privacy will be guarded. 

We would also like an expansion of eligible applicants for SBDC 

lead centers. This provision opens up eligible entities to include 

public or private nonprofit organizations. 

SBA also requests the authority to determine the number of 

SBDC lead centers that are funded in each state on the individual 

circumstances in the state. We believe that this authority will provide SBA with the necessary flexibility to ensure that specific small 

business community needs are best served in various circumstances. 

Chairwoman Vela ́zquez, that concludes my testimony. I look forward to answering any questions. 

[The prepared statement of Wilma Goldstein may be found in the 

Appendix on page 38.]

ChairwomanVELA ́ ZQUEZ. Thank you, Ms. Goldstein. 

Our next witness is Mr. Tee Rowe. He is the Associate Administrator of Congressional and Legislative Affairs for the Small Business Administration. He also worked in this Committee, the Small 

Business Committee, under the leadership of Chairman Talent as 

the senior counsel for the Committee. Tee, you are most welcome. 

Mr.ROWE. Thank you very much, Chairwoman Vela ́zquez. It is a 

little different being on this side of the microphone. 

8

STATEMENT OF C. E. ‘‘TEE’’ ROWE, ASSOCIATE ADMINISTRATOR OF CONGRESSIONAL LEGISLATIVE AFFAIRS, 

UNITED SATES SMALL BUSINESS ADMINISTRATION 

Mr.ROWE. Chairwoman Vela ́zquez, Ranking Member Chabot, 

members of the Committee, my name is Tee Rowe. And I am the 

Associate Administrator of Congressional and Legislative Affairs at 

SBA. 

I want to thank you all very much for inviting me to testify on 

the provisions of the draft legislation before the Committee. I appreciate your desire to seek the administration’s input, and I will 

do my best to respond to your questions as fully as possible. 

Unfortunately, I only received the Committee’s invitation yesterday. And I haven’t had time to prepare full written remarks, 

though I would very much appreciate the opportunity to get some 

remarks to you all prior to the markup. 

We also only received some of the final legislative language and 

summaries yesterday. However, based on a brief review of the 

drafts, allow me to make some of the following comments. 

As Wilma pointed out, SBA would like increased competition and 

access in the SBDC program. And to that extent, the administration would object to restricting SBDC grants solely to institutions 

of higher education. 

We believe the competition for these grants would foster expansion and innovation in the program. For instance, we support providing SBDC assistance to Native American communities. And the 

administration has to wonder if an open and competitive process 

would not have already resulted in that assistance, rather than 

raising the need for an adjunct program to provide that assistance 

now. 

With regards to the draft legislation concerning outreach to veterans, the administration supports this effort and the support that 

it offers to our veterans of both current and past conflicts. 

As Wilma has already talked about the women’s business center 

program pretty fully, I will leave that to her, but speaking briefly 

as a former staffer to the Committee, I appreciate the Committee’s 

recognition of the fact that the intent of the women’s business program has already been to create self-sustaining women’s business 

centers. The question before the Committee really is how long is 

that process going to take and how much accounting do we need 

to make for the different capabilities of the participants in the program? 

Lastly, let me just address the provisions of the draft energy bill. 

In general, the administration supports fostering energy conservation and innovation in energy technology. That has long been a 

component of the Small Business Act. Support for energy measures 

through the 7(a) program has been a part of section 3 of the act 

since 1981. 

SBA believes that educating small businesses on energy conservation is an appropriate function of the SBDC program. However, we would like to point out that regarding the provision on 

having SBA establish an energy education program, that language 

is a little bit redundant of authority and responsibilities we already 

have under the Energy Policy Act of 2005. We are carrying that 

9

program out right now in conjunction with our colleagues from the 

Department of Energy and the EPA. 

Finally, just regarding the SBIC provisions of the bill, these raise 

some interesting possibilities. We haven’t had time to fully assess 

the costs of the proposals or their marketability, but we would appreciate an opportunity to work with the Committee more fully to 

develop some of these proposals. 

Again, thank you very much for inviting me to testify. And I 

apologize for not being able to offer more complete remarks to you 

all. However, I hope I can assist the Committee with its questions. 

Thank you.

ChairwomanVELA ́ ZQUEZ. Thank you. 

Our next witness is Mr. Gregory Higgins. Mr. Higgins is the 

State Director of the Pennsylvania Small Business Development 

Center, which assists more than 150,000 clients each year. Mr. 

Higgins has previously served two terms as President of the Association of Small Business Development Centers. 

Welcome, sir. 

STATEMENT OF GREGORY L. HIGGINS, JR., STATE DIRECTOR, 

PENNSYLVANIA SMALL BUSINESS DEVELOPMENT CENTERS, 

THE WHARTON SCHOOL OF THE UNIVERSITY OF PENNSYLVANIA 

Mr.HIGGINS. Good morning, Chairwoman Vela ́zquez, Ranking 

Member Chabot, members of the Committee, I surely appreciate 

this opportunity to provide some comments on the entrepreneurial 

development program’s reauthorization draft. 

I would begin by indicating that with these initiatives, I believe 

the Committee has identified several of the most critical issues 

that are confronting the small business community today. Since the 

draft addresses both procedural changes and initiatives, let me 

spend just a couple of seconds on the procedural changes before I 

move to the programmatic initiatives. 

There’s a requirement that SBDCs operate out of accredited institutions of higher education. I think it makes perfect sense. We 

have an accreditation program with the Congress mandated for 

SBDCs. 

One of our strengths is being able to utilize the resources of institutions of higher education. And a requirement for accreditation of 

those institutions makes certain that those resources are available 

to the small business community. 

SBA involvement in hiring. We are all grownups operating in 

pretty complex organizations that have pretty well-defined processes for recruitment and hiring. And we do not think that it’s appropriate to have SBA involved in that process. 

Privacy of consulting. For us to be affected, we have to be able 

to ensure that our clients are—all the information they provide is 

maintained in complete competence. And the language in the draft 

certainly strengthens that. And we surely support it. 

Prohibition of use of SBA funds on the examination. With as limited as SBDC funds are, I don’t think it makes any sense to allocate SBDC funds to the examination process. In fact, I wonder 

since we’re all subject to federal law that’s under A-133 and we 

10

also all undergo state audits, whether the examination process 

really adds any value to the SBDC program. 

On the elimination of the cap on non-matching portability, this 

makes great good sense. All you have to know is that in the aftermath of Hurricanes Rita and Katrina, not only did it take six 

months to process the portability grant applications, but the Louisiana SBDC was required to submit six separate applications, the 

six separate scopes of work. Now, in a time like that to spend time 

putting together proposals simply doesn’t make an awful lot of 

sense. 

Now I would like to comment on the initiatives. And since time 

is really limited, I feel like saying they’re all good, but let me give 

you a little more than that. And maybe the best thing I can do in 

this is to tell you why I think all of these make tremendous sense 

for this system. 

Over the years, the Congress has invested public funds to build 

an information and services distribution system, the SBDCs, that 

now reaches every part of the country through more than 1,000 offices. You built the infrastructure. 

In addition to the national coverage, there are several other aspects of the SBDC’s program that make it especially effective in delivery. First, it’s founded in local institutions with close ties to the 

business and civic communities. 

It has a proven record of success. Several folks here have mentioned, including Congressman Sestak, the return on investment. 

So it’s not just a program that reaches a lot of folks. It makes a 

difference when it does. 

The SBDCs have knowledge in networking with all of the other 

state, local, and federal programs that also have to be engaged in 

providing business assistance. The SBDCs have access to the resources of a very powerful set of institutions of higher education. 

And the SBDCs have the flexibility to identify local and regional 

business issues and to develop programs as envisioned in this legislation to address those issues. 

And, finally, the SBDCs have an accreditation process mandated 

by Congress that ensures that anybody walking into an SBDC anywhere in the United States is assured of high-quality service. 

So, in summary, you know, over the past 27 years now, you have 

appropriated funds to build a system, delivery system, for small 

business that is second to none. And I think that each of these initiatives takes advantage of the value of that system. 

Rather than comment on all of the initiatives, let me just hit a 

couple of them. One is disaster recovery. In Florida, North Carolina, Louisiana, Mississippi, the SBDCs have demonstrated again 

and again their capacity to help businesses recover from the devastation of hurricanes. 

In many other states, including my own, we have been called in 

after disasters, which are clearly much less serious than the ones 

mentioned previously, but for the business owner affected, they are 

deadly serious. And the SBDCs have been able to assist in that. 

In New York and in the adjacent states, all of the SBDCs were 

effectively engaged in helping businesses recover from the terrorist 

attacks of 9/11. And this initiative in this legislation recognizes and 

11

takes advantage of the experience that SBDCs have gained in responding to disasters. 

Innovation and competitiveness is another initiative. Innovation 

is the heart of America’s competitive advantage. Sixty-seven percent of all innovation and 95 percent of all radical innovation occurs in small businesses. If we are going to help the United States 

remain competitive, particularly the manufacturers, we have got to 

have the capacity to help businesses identify and introduce innovation that is going to increase their competitive position and allow 

them to bring their ideas to market. So I think the competitiveness 

initiative is a very good one. 

Mature entrepreneurs. Throughout the United States and particularly in a lot of rural areas, there is a generation, my own, I 

expect, that is getting ready to retire and who have been operating 

successful businesses. The danger is that as these folks retire, absent an exit strategy, a transition plan, not only are you going to 

lose the entrepreneur. You are quite likely to lose those businesses 

as well. There is no plan for how these things are going to be maintained. 

We think the SBDCs are in a terrific position to identify those 

types of businesses to hep them develop exit strategies, transition 

plans, to help identify folks who might be the next generation of 

entrepreneurs and hep them develop the skills to come into those 

businesses and to maintain them in those areas. 

Finally, the last one I would comment on is energy conservation. 

We have some experience in Pennsylvania with that. We have 

found in our energy conservation program that we can reduce energy consumption in small business, easily reduce energy consumption in the small businesses we work with, between 20 and 30 percent. 

If you look at what that could mean on a national level, that 

would mean that we could if this initiative is fully implemented 

help small businesses reduce carbon dioxide emissions by up to 140 

million tons a year while saving businesses an estimated 18.75 billion. 

Now, that’s complete. But, you know, obviously the more you put 

into it, the more impact we are going to have. I think it’s a terrific 

idea. And it’s one we support, as we do all of the initiatives outlined here. 

Thank you, Madam Chair. 

[The prepared statement of Gregory Higgins may be found in the 

Appendix on page 45.]

ChairwomanVELA ́ ZQUEZ. Thank you, Mr. Higgins. 

Our next witness is Mr. David John. Mr. John is a member of 

the New Mexico SBDC Statewide Advisory Council. He is a small 

business owner and a member of the Navajo nation. 

Welcome, sir. 

Mr.JOHN. Thank you. 

ChairwomanVELA ́ ZQUEZ. You will have five minutes. 

Mr.JOHN. Thank you, Honorable Nydia M. Vela ́zquez and Ranking Member Mr. Chabot and staff and ladies and gentlemen in the 

audience. 

12

STATEMENT OF DAVID L. JOHN, FORMER NAVAJO NATION 

TRIBAL COUNCIL REPRESENTATIVE, FORMER SBDC CLIENT 

OF THE SAN JUAN COLLEGE SBDC IN FARMINGTON ON BEHALF OF NEW MEXICO SBDC STATEWIDE ADVISORY COUNCIL 

Mr.JOHN. My name is David L. John. Thank you for inviting me 

to testify before you today. I am very honored. 

I am a member of the Navajo nation. And I am also a Navajo 

businessman for the past 35 years in the Four Corners region. I am 

here before you today on behalf of New Mexico Small Business Development Center Statewide Advisory Council. 

I am self-employed. Professionally I am by profession a hair stylist and a barber and owner of other several businesses in the Four 

Corners region. I am the President of Northern Navajo Medical 

Center Health Board. I was a member, past member, of the Navajo 

Nation Council for three terms. I was a Chairman of the Economic 

Development Committee while I was on the council the whole time. 

As a member of the Navajo Nation Council and being the Chairman of the Economic Development Committee, we have experienced on Indian land how it is to start a business on Indian land. 

It is very obstacle. And people call it red tape to start a business 

on the reservation. 

We start with a land lease called business site lease. The procedure consists of sometimes 60 steps to go through to start a business on Indian land; whereas, compared to off the reservation, private land, you can start business within the week. And you’re in 

business. And sometimes it takes two to three years to go through 

this process on this private property you go through within a week. 

I think one of the first steps that I would like to share with you 

is get a consent from the home site lease and business site lease 

that goes through the permit, grazing permit holder and where the 

potential site for business is going to go. 

That goes through the Navajo Nation called Regional Business 

Development Office of each agency. The application usually requires a business plan, what kind of financial package, including 

banking institution and projection for the few years that you are 

going to be in business. 

The lease lasts for about 25 years or sometime more depending 

what kind of business, the term of the lease agreement based on 

the profit and loss gross receipts, tax structure, statement on land 

use approved and appraised by the BIA, which stands for Bureau 

of Indian Affairs. 

It is very hard to get a loan for a business on Indian land because of lack of collateral since the business site is on federal property. All the reservations are usually known as federal property. 

You can’t own land on these properties. You only can lease on tribal land, where off the reservation you can own land where you can 

get a loan against it. 

Because Indian land is federal property, BIA has the final authority. No matter what, they still have to sign off. And so there 

is a duplication of service right there going through the tribe and 

then the BIA again. 

Economic Development Committee gives approval. And then it 

goes to the BIA. By this time, you know, sometimes some of these 

13

steps that I’m talking about are not complete or sometimes they expire within all these times. And then you have to go back and start 

all over again. That’s when some of these business people get frustrated, and they just quit. 

And so just imagine starting a business on federal property like 

Bureau of Land Management, for example, what kind of headache 

you are going to go through. And that’s the same scenario in this 

issue here. 

Now I have told you about all the problems of starting a business 

on Indian land. The passage of this bill will help the Navajo and 

Native American small business people improve their lives, stimulate economic development on Indian land, and assisting creating 

new small business owned by the Indian tribal members. It will 

also help advise the local tribal council and tribal government 

where small business assistance is in dire need. Also, this will provide greater access to existing business council and technical assistance available though the small business development center 

program. 

I have been a member of a local small business development 

council for Farmington, New Mexico through San Juan College. I’ve 

recently joined New Mexico Statewide Small Business Advisory 

Council to provide input on Native American business issue providing some assistance to small businesses with initiative access 

funding amending some of these they are already doing but limited 

for funding and so forth. This amendment in the act is very important to Indian tribal economic development on Indian land because 

it ensures more convenient access to tribal services provided. 

Lastly, I would like to thank you for allowing me to testify today. 

And thank you for supporting small business and also Native 

American small business. 

I would also like to special thank Mr. Tom Udall, members of the 

Congress District 3 from the great State of New Mexico for sponsoring some of this amendment. Thank you very much. 

[The prepared statement of David John may be found in the Appendix on page 50.]

ChairwomanVELA ́ ZQUEZ. Thank you. 

Our next witness is Ms. Barbara Wrigley. She is the Executive 

Director of the Women’s Business Center of Northern Virginia. She 

is speaking on behalf of the Association of Women’s Business Centers, which represents women business owners through a network 

of women business centers that serve nearly 150,000 entrepreneurs 

across the country. 

Welcome. And you have five minutes to make your presentation. 

Ms.WRIGLEY. Thank you. Madam Chair and Ranking Member 

Chabot, thank you so much, distinguished members of the Committee. I really appreciate the opportunity to be here. 

ChairwomanVELA ́ ZQUEZ. Without objection 

14

STATEMENT OF BARBARA WRIGLEY, EXECUTIVE DIRECTOR, 

WOMEN’S BUSINESS CENTER OF NORTHERN VIRGINIA ON 

BEHALF OF THE ASSOCIATION OF WOMEN’S BUSINESS CENTERS 

Ms.WRIGLEY. My name is Barbara Wrigley. And I am delighted 

to serve as chair-elect for the Board of Directors of the Association 

of Women’s Business Centers. In addition, as the Chair mentioned, 

I am the Executive Director of the Women’s Business Center of 

Northern Virginia and had the privilege of starting that center in 

2001. 

I am honored today to speak on behalf of the Association of 

Women’s Business Centers in support of the SBA Women’s Business Programs Act of 2007. The association has submitted formal 

testimony. And I ask that those written remarks be entered into 

the record. 

ChairwomanVELA ́ ZQUEZ. Without objection. 

Ms.WRIGLEY. Thank you. 

Specifically, the AWBC’s testimony speaks to three points. Point 

one, women’s business centers are past the point of demonstration 

and should be evaluated and funded on an ongoing basis on par 

with other SBA business assistance programs. 

Despite a remarkable record of achievement over the past 18 

years as the program has come into its own, its growth has recently stalled due to funding decisions. We know that when our 

program performance is measured against any other enterprise 

program, we will meet or exceed performance benchmarks. 

Point two, funding allocations between new and existing centers 

should recognize the value of the longitudinal approach that WBCs 

take to client service and should not vary from year to year. 

The SBA Women’s Business Programs Act of 2007 will remove 

the funding uncertainty that WBCs have had to endure by establishing three tiers of funding and setting funding levels and budget 

allocations for each. We believe that the 40-20-40 allocation is eminently fair and recognizes the economic contributions made by 

WBCs that have an established track record of service. 

Point three, program grant disbursements should be made in a 

timely manner to ensure that client services are not interrupted. 

We are in solid agreement that awards should be made public and 

should be paid in a timely manner. 

The new SBA Women’s Programs Act of 2007 would go a long 

way to addressing our concerns. And we applaud Congresswoman 

Vela ́zquez for her leadership in introducing this bill. This bill will 

help solidify the standing of the women’s business center program, 

both in terms of ongoing funding and with respect to how program 

funds are allocated among the centers. 

Women’s business centers have struggled in recent years with a 

great deal of uncertainty, not only regarding whether or not they 

will receive funding but how much funding they will be given. It’s 

a huge worry for all of us because our communities rely on us. 

Since we are forbidden to raise funds while being paid by the 

SBA, many of us put in long hours of our own time to build the 

relationships necessary to ensure federal and ongoing matching 

funds. 

15

I applaud the Committee for recognizing that the WBC program 

has proven its impact and deserves to be treated as such. Your support will not only be felt on the national level. It will be strikingly 

apparent at the center level as well. 

Allow me to tell you about the Women’s Business Center of 

Northern Virginia. At the WBC in northern Virginia, we are proud 

of the fact that since opening our doors on January 3rd, 2001, we 

have run over 530 classes attended by over 10,000 women, and 

have provided over 1,600 hours of free one-on-one technical assistance counseling, all with a full-time staff of 2. Fully two-thirds of 

our clients are women of color and new Americans. And, in fact, 

within five miles of our center in Springfield, women speak over 

150 different languages. 

With the SBA’s total investment to us in northern Virginia of approximately $900,000 over the past 6 years, we have only spent 

around 125 federal dollars per woman assisted. We also know that 

based on a survey of responses from about one-fifth of our clients, 

that we have had at a minimum a $44 million economic impact on 

northern Virginia and its surrounding areas. When you consider 

that the median gross receipts of the businesses we assist were 

only $25,000, we have helped a lot of small businesses. 

Despite flat and reduced funding, the SBA insists that all of our 

major milestones increase annually by ten percent. In the past two 

years, while the WBC NOVA has suffered a 32 percent budget cut, 

the number of individuals we have assisted has grown 60 percent. 

I am projecting that this year we will help 2,500 women on an annual cash budget of $225,000. 

Let me tell you about one particularly interesting client. And 

then I will conclude. Pauline Lewis was born in Malaysia and came 

to the United States when she was 18 to attend a small college in 

New York. Three years ago she showed up at our WBC as a lowincome new American with a Bachelor’s degree in international relations, a desire to start her own importing business, and a keen 

commitment to helping women. 

Pauline traveled alone to Ho Chi Minh City in Vietnam and discovered a woman-owned factory there where 100 women were making beautiful handbags. The piece parts for those bags had come 

from 500 women doing hand embroidery work in co-ops outside of 

Hanoi. 

Pauline struck a deal with the factory owner to export her handbags and to support her women employees. She named her company Oovoo, the root of the word from Latin for female egg. 

Less than three years later, Oovoo Design Handbags are now 

sold in 600 retail stores in the United States, Canada, and Europe. 

The factory in Vietnam has hired 20 more women to keep up with 

demand. All of the women are being paid 15 percent above market 

rate as well as being taken annually by the company on a fully 

paid weekend vacation. 

Pauline’s business, Oovoo Deign, made almost $500,000 last year 

and was featured in a Time Magazine article about women helping 

women through trade. And last month, Pauline was honored to receive Count Me In’s prestigious Make Mine a Million award. Her 

goal is to have a million dollars in revenues by the end of the year. 

16

She is still a home-based business, and we are so proud of her. She 

says she could not have done it without us. 

We thank the members of the House Committee on Small Business for your longstanding support of the women’s business center 

program and for other efforts to support women’s enterprise development in general, such as your support for the National Women’s 

Business Council and for increasing access to federal procurement 

opportunities to women-owned firms. 

In closing, I would like to reiterate on behalf of the AWBC our 

strong support for the SBA Women’s Business Programs Act of 

2007. We look forward to continuing to work with you to increase 

the economic and social contributions of this nation’s estimated 

10.4 million women-owned enterprises and to the countless others 

whose ideas are on the drawing board awaiting support and assistance from our nation’s women’s business centers. 

Thank you, Madam Chair. 

[The prepared statement of Barbara Wrigley may be found in the 

Appendix on page 52.]

ChairwomanVELA ́ ZQUEZ. Thank you, Ms. Wrigley, especially for 

that great story. 

Our next witness is Mr. Scott Sklar. Mr. Sklar is the President 

of The Stella Group, a strategic marketing and policy firm for clean 

distributed energy users and companies. He also serves as Steering 

Committee Chair of the Sustainable Energy Coalition, composed of 

the renewable energy and energy efficiency trade associations and 

analytical groups. Thank you. 

Mr.SKLAR. Thank you, Madam Chairman. I wish to thank the 

House Committee on Small Business for holding this hearing and 

focusing on energy as critical to small business and how small business can provide critical answers to our country’s energy, environmental, and security challenges. 

STATEMENT OF SCOTT SKLAR, CHAIR, STEERING COMMITTEE 

OF THE SUSTAINABLE ENERGY COALITION AND PRESIDENT, 

THE STELLA GROUP, LTD. 

Mr.SKLAR. I would like to point out that I am a small business. 

And my testimony I submitted was featured this past month in 

Fortune Small Business on how my own company has used these 

technologies. My company focuses on other companies and how to 

make them more efficient. 

Energy prices are going up. And I included in my testimony that 

I have submitted an April 11th submission in the Washington Post, 

an article where the local Virginia utility is asking a price increase 

of 90 percent for natural gas, 143 percent for its crude oil for its 

peak power plants, 25 percent increase for coal, and 8 percent for 

nuclear fuel. And that is happening all over the country. We are 

having rate increases. That is going to continue. 

We have also experienced, as you know, longer-term energy outages from everything from a tree branch in Ohio that shut down 

electric power in 11 states for 3 weeks in many cases to Katrina. 

And I am consulting with the State of Mississippi and also, 

through the Clinton Foundation, the City of New Orleans on how 

they rebuild their energy infrastructure. The impact on business in 

17

both cases an accident and an act of God have been profound. It 

has pushed many businesses from being in the black into the red. 

I want to remind the Committee that most of our retail industry 

in this country makes its profit in the last few weeks of the year. 

So if you have an outage due to a mistake, an act of God, or a tree 

branch or a squirrel, it puts you in the red. It is not acceptable. 

The good news is—and I included that in my testimony that I hope will be included in the record—that we have $17 billion coming from institutional investors and the joint venture community 

into these businesses to create new kinds of technology. And that’s 

the whole portfolio of energy efficiency renewable technology. 

That is the good news. And it is going into intellectual property. 

And these companies have been growing 30 percent a year for the 

last 7 years. The bad news is this kind of money does not go to the 

kinds of companies that take this new technology and bring it into 

the marketplace. So there has been, in fact, a bottleneck that we 

can manufacture and we can start automating. And we can’t get 

it to the public. 

And, unfortunately, I have to disagree with our SBA representative here that DOE and EPA are really not set up to do this kind 

of job. And the fact of the matter is that the proposals in the draft 

bill of the Committee are very good. 

The sustainability initiative and the way to open up certain programs at SBA are able to bring professionals geared to help small 

businesses that need the capital to orchestrate that capital and for 

those who want to use these technologies to figure out ways to access private capital and in some cases public capital to be able to 

do that so that they can expand and be more cost-effective. 

I have been appointed this past month by the administrator of 

EPA on the NACEPT advisory committee, the over-arching committee for EPA. And I work closely with DOE. DOE is great on 

technology assistance. And EPA is a great regulatory agency and 

to give people some ideas. But they are not SBA. 

SBA the President has said all agencies through executive order 

are to work in making this country more energy efficient and to reduce energy imports, all agencies. The Committee’s bill I believe, 

the proposed bill, is to really start getting into the meat of that and 

creating some tools to do that. So I urge you to raise the bar and 

create the capacity within SBA. 

I am getting called by lots of small businesses. And when I refer 

them to the SBA, they go, ‘‘There is no one there that knows these 

energy issues.’’ And so they just refer them to the banks. And the 

banks have no idea what to do. And it rolls off the back. So we 

need to be a little more focused on how we do this. 

There is no question that we have more cities out of Clean Air 

Act containment than ever before. Obviously you are reading the 

news articles about emissions causing change in our global climate. 

We are fighting a few wars in the Middle East now, where we are 

importing a good portion of our energy. But, frankly, we are importing our energy from other countries around the world that are 

as shaky or are not democracies. 

We have some problems in this country that small business can 

help tackle. We have the private investment coming in. We need 

the public tools to help to facilitate that investment. 

18

Thank you very much. 

[The prepared statement of Scott Sklar may be found in the Appendix on page 55.]

ChairwomanVELA ́ ZQUEZ. Thank you, Mr. Sklar. 

Mr. Rowe, the Energy Policy Act of 2005 required the administrator to take an active role in getting small businesses to be more 

energy-efficient. And he was supposed to establish a strategy and 

plan for its implementation. He was supposed to meet with EPA 

and Department of Energy and coordinate an effort to gather information on energy efficiency, information that is useful to small 

businesses. 

We have looked over your congressional submissions, your GPRA 

reports, and your Web site. And I don’t see any of that. I just would 

like to know what is it that SBA is doing to carry out the goals 

established by the Energy Policy Act of 2005? 

Mr.ROWE. Yes, ma’am. The Office of Policy and Planning at SBA 

is working with EPA and the Department of Energy to collect the 

information and establish links through our Web site to information from EPA and the Department of Energy. 

ChairwomanVELA ́ ZQUEZ. How long do you think it will take? 

Mr.ROWE. I can’t give you an exact time, but it’s my understanding from our Director of Policy and Planning that the implementation of the links should be established within the time frame 

of this summer. 

ChairwomanVELA ́ ZQUEZ. Since the SBIC program was implemented, basically it tended to focus more on financing small businesses in the manufacturing industry. In the past year, only four 

SBIC financings went to small businesses involved in energy and 

utilities. This represents less than one-quarter of one percent of the 

total finance in the SBIC program. 

Has the SBA done anything to increase the number of small 

businesses receiving SBIC investment in the area of alternative energy? 

Mr.ROWE. Ma’am, I spoke with your staff. And you are correct. 

We did four financings to utilities. I think we may have done about 

30 financings in—

ChairwomanVELA ́ ZQUEZ. Okay. Alternative energy, not petroleum. 

Mr.ROWE. Right. And the problem is, as you point out, most of 

those investments are probably extraction and services-based. We 

don’t have any information as to whether they are efficiency or conservation-based. 

ChairwomanVELA ́ ZQUEZ. So does the SBA support efforts to 

adapt the SBIC program to encourage investment in the area of energy independence if it could be done with zero additional cost to 

the government? 

Mr.ROWE. Yes, ma’am. I was discussing this with some other 

folks in the administration, ma’am. And I believe we would be very 

interested in the fact that if it can be done through a zero subsidy 

debenture, that might actually be more efficacious than some of 

these subsidized and supported provisions that exist at other agencies. Unfortunately, we just haven’t had time to go through all of 

the other options that are out there, the other agencies. 

19

ChairwomanVELA ́ ZQUEZ. Thank you. 

Ms. Goldstein, one of your legislative proposals that you sent to 

us, you are requesting from Congress to give to the SBA one percent of the SBDC appropriation for administrative costs. If we look 

at the last seven years’ budget submission from SBA, basically it 

has been flat funded, has been flat. You haven’t requested any additional money. 

On top of that, you are also proposing to eliminate the microloan 

technical assistance program and have the SBDCs fill this gap. 

With an overstretched and flat funding SBDC program, explain to 

me how can the agency now take already scarce program funds 

from the SBDC and use it to pay for administrative costs? 

Ms.GOLDSTEIN. Well, we have made a great effort with Administrator Preston in finding ways to not get involved in too many 

platitudes but in doing more with less. And we have had a concerted effort on that. 

You always wish you were in the position to be able to meet all 

the requests and all the goals. We continue to do that and look at 

ways that we can stretch the dollars as far as we can. And we will 

have continued to do the same. Some of it is starting to take effect. 

We’re devoting a lot of energy into how we manage and how we use 

our time and how we use our money. 

ChairwomanVELA ́ ZQUEZ. But do you think it is responsible on behalf of small businesses in this country for the administrator to 

submit a budget without asking for an increase for those programs 

and then robbing Peter to pay Paul while we know that in the last 

six years, the budget has been cut by 40 percent? 

I will ask Mr. Higgins. What is your position regarding SBA taking one percent of the SBDCs to pay for the administrative costs? 

Mr.HIGGINS. Well, if the assumption is that the funds are being 

appropriated to serve small businesses, I don’t think they would be 

served by moving those funds into the administrative costs of the 

agency. 

ChairwomanVELA ́ ZQUEZ. Let me go to Mr. Chabot because I 

know that there is going to be a series of votes. But I have more 

questions. And then on my second round, I will come back to them.

Mr.CHABOT. Thank you, Madam Chair. I would just like to compliment the panel on their testimony this morning. I thought it was 

very good and very interesting. 

Ms. Wrigley, if I could start with you first? Just a comment that 

your story was very interesting about the Malaysian lady who 

started the purse thing. And I have to say last weekend was Mother’s Day, as we all know. And I was trying to figure out what to 

get my wife and was very creative and got her I think candy and 

flowers. 

She always compliments me on my creativity. But if I had known 

that, that sounds like that Oovoo purse would have been a very interesting —

Ms.WRIGLEY. oovoodesign.com. 

Mr.CHABOT. You said there are 600 outlets around the country 

that now carry that sort of thing? 

Ms.WRIGLEY. There are 600 retail stores that carry her purses, 

yes. And you can also find them online at oovoodesign.com. 

20

Mr.CHABOT. Staff should take that down. 

[Laughter.] 

Ms.WRIGLEY. There you go. 

Mr.CHABOT. Next Mother’s Day. Thank you. Don’t tell my wife, 

though, beforehand. 

Ms.WRIGLEY. Okay. 

Mr.CHABOT. Let it be a surprise. 

Could you tell me what the rationale for having separate outreach programs is, just in general, you know, for specific groups? 

Ms.WRIGLEY. Sure. 

Mr.CHABOT. And are the rationales as valid today as they were 

when Congress created them quite a few years ago? 

Ms.WRIGLEY. I think that there is tremendous rationale for having different programs, sir. The women’s business center programs 

really target a very different kind of population than the SBDCs. 

And I speak from a great deal of experience because we happen 

to have both under one roof at our location in Springfield. The 

women’s business center office is literally three feet away from the 

SBDC office. 

We serve very different clientele because we do so in a very different way. Women learn differently from men. And I know that 

when I had my own business in Virginia a number of years ago, 

it was very intimidating to me to consider the idea of going to a 

university to, frankly, sit down next to a bunch of white guys with 

M.B.A.’s and a lot of daddy’s money in their pocket. I felt like, you 

know, I would be really intimidated to ask my questions. 

We create a very different culture at the women’s business center. We really have made it a welcoming place where new Americans, where women of color are supported, and they feel comfortable. 

We explain all of our terms. We don’t presume a level of knowledge that perhaps is presumed by the SBDC. Let me give you a 

real specific example. At the center where I work, the women’s 

business center takes an entire day to teach how to write a business plan. We explain every term. 

As I mentioned, we spend some time with networking. We really 

don’t want to use terms even like cash flow without really going 

into depth as to what that means. 

At the SBDC, you can get the exact same information in a twohour class versus an eight-hour class. So there is a huge difference 

in how we do what we do. And it’s very important to me that the 

woman have a place where they feel comfortable, where no question is considered stupid, and where they see other women like 

themselves who are aspiring to reach their dreams. 

Mr.CHABOT. Thank you. 

Ms. Goldstein, if I could go to you next? You mentioned that, I 

believe, online the SBA has 23, I think you said, training programs 

that one can go on to get assistance at. How does the SBA get the 

word out there that those are available to make the public and 

maybe people that are thinking about getting into starting a small 

business or expanding? How do they find out about it to begin 

with? 

Ms.GOLDSTEIN. Well, we don’t have a separate marketing program for it, but we let our resource partners know. And we get 

21

about 12 million people annually looking at our Web site. And they 

find it there. It’s been fairly well-promoted on the Web site. That’s 

how they learn. 

Mr.CHABOT. Thank you. 

Ms.GOLDSTEIN. And, of course, we talk about it wherever we go. 

Mr.CHABOT. Mr. Sklar, if I could move to you next? Could you 

talk again briefly—and you went into this in your testimony 

again—how small businesses, in particular, are affected by the energy prices that have been going up so dramatically in recent 

years? 

Mr.SKLAR. You know, there are easy things that small businesses 

can do that we all do, even in our homes, you know, from compact 

fluorescence and energy thermostats and things like that which are 

common knowledge and you can do. But once you get to a certain 

level—and a lot of these small businesses are really constrained by 

the energy costs. 

I have a client company that is going to close down one of their 

plants just because their energy costs are too high, but they’re committed not to go overseas and outsource. But, instead, they’re just 

shutting down plants. 

And, frankly, that was the company I said, ‘‘Well, go to the Small 

Business Administration.’’

And they said, ‘‘We got no answers.’’

And then I called SBA and said, ‘‘Who do you know on energy?’’

‘‘We have nobody on energy.’’ And so they’re getting squeezed. 

And the problem is if you want to keep business in the United 

States,—and I think we all want to do as much as rationally possible—one of the places we have to deal with is how to confront 

these rising energy costs. 

And, you know, you have in some cases no options if you don’t 

do it. Refrigeration costs are high if you are in food processing. 

Running motors is high and so on. Obviously natural gas for heating is getting higher. And these businesses are also getting higher 

costs in basic commodities, a lot of it attributable to growth in 

China and India driving those commodities up worldwide, understandably. 

Well, if your energy prices are going up and your commodity 

prices are going up, I think you are really starting to get crunched. 

And that is what I hear all over the country. And I am working 

with these companies all over the country. 

Mr.CHABOT. Thank you. 

Mr. Rowe, on behalf of the SBA, how do you respond to that, the 

comment that the SBA doesn’t know energy or we don’t have anybody there that knows this area and maybe concentrating on the 

future as much as in the past, really? 

Mr.ROWE. Yes, sir. Well, as I told the Chairwoman, we are working to implement the provisions of the Energy Policy Act, which 

should be able to provide some assistance to small businesses looking for that kind of information. 

I will be frank. I am not certain what information exists in the 

world, whether it’s EPA or the Department of Energy, to help small 

businesses with these energy efficiency issues 

Mr.CHABOT. Thank you. 

22

Do I still have any time, Madam Chair? Mr. Higgins, and then 

I will go very quickly. Mr. Higgins, you were fairly complimentary 

of the initiatives and the direction that the Committee is going on 

the proposed legislation. Are there any things when you reviewed 

this that seemed to be either missing or that you think we should 

add to make it even better, anything that comes to mind? And if 

there’s not—

Mr.HIGGINS. Well, with respect to the mature businesses, the legislation focused exclusively on what I mentioned, which is those 

businesses, those people that are likely to retire, leave the business, and may not succeed. 

Another point that was made here earlier is there is a huge slug 

of folks reaching retirement age or who are going to be looking at 

either part or full-time business ownership as a way to either stay 

business or to supplement their retirement. 

I think it’s important to look to the future three or four years 

and figure out how we’re going to handle that group of folks. Many 

of them are going to retire with significant assets that may be put 

at risk if they don’t understand the mechanics of appropriately 

starting and managing businesses. I mean, the sharks will be out 

there to take their monies to sell them franchises or whatever. So 

I think that it would be well for us to get ahead of that curve. 

Mr.CHABOT. Thank you. 

Mr. John, unfortunately, I have run out of time. We are going to 

maybe go to a second round. So maybe we’ll get you next time. We 

are going to have a vote at 11:30. I think the Chairwoman wants 

to give the other members who are here a chance. 

ChairwomanVELA ́ ZQUEZ. And I will come back to you. 

Mr. Sestak? 

Mr.SESTAK. Thanks, Madam Chair. 

See, I am kind of struck. From the background I come from in 

the military, I have watched. When people tend to lose funding or 

things start to decline, there is always this greater effort to fight 

for control over a smaller piece of pie. And to some degree, I have 

watched the SBA budget decline 40 percent and saw what you have 

done zeroing out the microloans and zero subsidies for 7(a) and significant cuts that had been mentioned in the WBCs’ percent of program budgets. And there’s prime and all that. 

So I am intrigued at the same time why there seems to be this 

movement by SBA when it’s got less to do, so to speak, or less 

funding to give, why there’s this movement by you for greater control. It just seems like an organizational thing I’ve watched in the 

military. As the Services lost their power and their funding, went 

to Joint Staff, they seemed to fight more for it. 

So with that as background and as I watch as you want to know 

more about the clients that are coming to the SBDCs and their information, how money is used from the SBA for the SBDCs to do 

the examination process but, in particular, how you all want to 

now have a veto authority, so to speak, on the grantees’ selection 

of the SBDC state director. Why is that so important? 

Ms.GOLDSTEIN. So that they can participate in the selection of 

the people that will be running the program. I mean, I don’t think 

I find that a terribly unusual practice. 

23

And you are talking about some prohibitions that we have, but 

in the meantime, the programs are flourishing. We are training 

and counseling more people. We want to participate in the interaction in the States and with our programs and have that option 

to—

Mr.SESTAK. But is it true that the hours that are actually—the 

number of people is going up. Aren’t the hours of client services 

going down? Mr. Higgins, is that so? 

Mr.HIGGINS. Necessarily when SBA was pressing for more touches of people, many states saw the number of hours per consulting 

case drop to less than two. 

Mr.SESTAK. So the number of hours that we’re able to do things 

is dropping. Would it be beneficial to have a position of state director, help to have a chop on it, so to speak, by the SBA? 

Mr.HIGGINS. Well, you know, there are two SBDCs here. One is 

from New Mexico. Both of us have partners that put far more 

money into the activity than does the SBA. I said there are two 

SBDCs represented here. And both of us have funding partners 

that put far more money into the SBDC than does the SBA. I don’t 

know why the SBA is the only partner that insists upon a veto on 

the selection of the—

Mr.SESTAK. Again, as you mentioned, the number of people has 

gone up, but, actually, the number of hours are going down. And, 

yet, this is more assertion for control. 

A question I have is health care. I am most intrigued by it. There 

has been an increase according to the last 6 years of 78 percent in 

the health premiums across the nation for small businesses. I 

mean, there is really a challenge for small businesses in addition 

to the energy. It’s got to be health care. I mean, its time has come. 

My take on it is, does granting additional resources—because a 

lot of this is just about sometimes information, knowing where to 

go to find something. Would that be of help in this health care area 

if we were able to provide additional resources? 

Mr.HIGGINS. Absolutely. And you’re right. It’s a matter of understanding where the information is and being able to analyze alternatives in many cases, which with everything else the small business owner has to do, that’s often very difficult. 

Mr.SESTAK. One other thing. I really like that we’re reauthorizing this bill and all because, as everyone has mentioned, times 

are changing. You know, we see more groups, women, et cetera, 

coming. To some degree, I am also struck by formulas that are 

older and potentially need to be changed. 

This one may come across a bit parochial. I don’t mean it that 

way, but I watched populations, like in Pennsylvania or New York 

City, where they are actually declining. We have a formula that is 

based upon population or distribution. 

You know, I find places like Pennsylvania or my own district 

that one out of five manufacturing establishments has disappeared 

in the last three years. And a real challenge is here. 

But is the formula we are using the correct one as we go into 

the future? 

Mr.HIGGINS. I think the formula establishes a base. And I think 

that’s important to establish a base. But then I think that the separately funded initiatives allow individual SBDCs to identify opporVerDate 0ct 09 2002 08:59 Dec 20, 2007 Jkt 033615 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 G:\CLERK SB\HEARINGS\TRANSCRIPTS\34834.TXT LEANN
24

tunities or issues within their own area and then additional funds 

that would be more flexible, not allocated by formula, would allow 

SBDCs to address what they perceive as the special needs in their 

area. 

Mr.SESTAK. Thank you, Madam Chair. 

ChairwomanVELA ́ ZQUEZ. Mr. Shuler?

Mr.SHULER. Madam Chair, thank you. 

I continue here. We have heard about the SBA not being a part 

of the future, it seems like. I mean, we continue to talk about sustainable renewable energies, the ways that we can benefit. I mean, 

this hasn’t happened overnight. It’s not something that this Congress, this Committee decided to do yesterday. This has been going 

on for quite some time. 

So give me your plans. I mean, this is very discouraging to me 

that there has been no plan. It should have already been implemented. I mean, we have other businesses and organizations 

throughout our communities and our district and our state that 

have already gone forth and put the effort as working with the different organizations to ensure that we have better energy efficiency. We know it’s a problem. We can’t ignore it. And our small 

businesses continue to hurt every single day because of that. 

Give me your plan. I mean, we talk about implementing a Web 

site to be able to direct the information. But what are we doing actually on the ground with the people? What education are you giving to the employees that will actually benefit our small businesses? 

Mr.ROWE. Well, as far as an employee-based outreach program, 

Mr. Shuler, we don’t have one in place at this time. I’m certainly 

willing to bring that back to the administrator. I know that’s one 

of the things he would be happy to take up. He’s very interested 

in getting our district offices more involved in outreach. And obviously this is an area of interest to the Congress but to the nation 

as a whole. 

ChairwomanVELA ́ ZQUEZ. Would the gentleman yield? 

Mr.SHULER. Yes. 

ChairwomanVELA ́ ZQUEZ. Mr. Rowe, I think that basically our 

frustration is because this Energy Policy Act of 2005 required for 

the administrator to establish a strategy and a plan. So I will request, formally request, from this Committee that you send to us 

information as to when the strategy and plan will be ready. 

Mr.ROWE. Yes, ma’am. I will be glad to do that. 

Mr.SHULER. Thank you, Madam Chair. 

Mr. Higgins, can you tell me some of the things that you are 

doing, certainly in Pennsylvania, to be able to get the message out. 

I mean, maybe this is some of the things that we can give SBA 

that how you have indicated in being able to educate the small 

business community. 

Mr.HIGGINS. Right. Well, we have in Pennsylvania an environmental management assistance program that includes also our energy conservation program. It’s not funded with SBA funds. We 

funded it elsewhere. 

What we do is when we begin a consulting engagement with a 

company, we try to make them aware that it is quite likely that 

25

there are opportunities for energy conservation in those companies. 

We can follow that up with an on-site assessment where we make 

specific recommendations as to what you can do. I mean, it may be 

as simple as lighting, heating, and air conditioning and may be 

fairly complex depending on the size of the company, business they 

are in. 

But, as I said, we have found that with those on-site visits, those 

companies can realize savings of between 20 and 30 percent in energy bills. This becomes critical in Pennsylvania because we’re one 

of those states where the caps are coming off, electrical costs, and 

the bills are likely to rise anywhere from 50 to 70 percent. So these 

small businesses have got to confront this. 

You know, we market that. We have 18 centers in Pennsylvania. 

That assistance is available through all of them. But you know 

what? Again, it is one of the many things, like health care, that 

a small business owner has got to confront. So our job we feel when 

we get hold of them is to say, ‘‘Okay. Have you thought about this? 

Do you want us to help you do this?’’

When we first started, about 30 percent of the businesses took 

us up on it. Now we are up to 60 percent of them want us to help 

with the energy conservation. It is huge for them. 

Mr.SHULER. Real quickly, Mr. Sklar, I appreciate your testimony 

today. And I commend you for your work and what you have been 

able to do and accomplish. 

Talk to me briefly what we can do in association with the banking industry, particularly maybe our more community, smaller 

community banks that we can actually educate them and allow 

them to get the background necessary for them to make a loan. 

For an example, our small businesses may have more up-front 

costs, but the energy impact, it may be a great investment, a larger 

investment, up front but over the life of a particular business to be 

able to benefit from better energy-efficient products. 

Mr.SKLAR. I think that is an absolutely important question. We 

are finding that credit unions and more community-based banks 

are very concerned about the economic stability of the small business community. 

And the issue that you just addressed that yes, the up-front cost 

is higher, I use the example that solar water heater costs four 

times what a regular water costs, but if you incorporate in a 

longer-term financing package, the monthly loan is less than the 

utility bill that you would be saving. So you would pay for itself 

the day you financed the system. And that is true in lots of different technologies in energy efficiency and renewables. 

Frankly, what I was hoping for SBA, what my aspiration is was 

really to do just that, is to provide some guidance to lenders that 

work with small businesses on these kinds of issues and yes, of 

course, bring in DOE or EPA on technology or regulatory issues 

and then work with the states. 

Pennsylvania has a fabulous program for environmental businesses and clean energy, but they don’t have the expertise in the 

government to deal with this, the lending side of it. And that is, 

frankly, what we need. We need it to be done on a regional basis 

because most lenders are sort of regional. And they will learn from 

each other. 

26

And we are finding, by the way, in some states that have these 

programs once the lenders have a couple of years’ experience, you 

know, it is sustainable. It goes on its own. So it is a very important 

issue. 

Mr.SHULER. Thank you, Madam Chair. 

ChairwomanVELA ́ ZQUEZ. Mr. Jefferson? 

Mr.JEFFERSON. Thank you, Madam Chair. 

Not to stay on the same subject for the entire hearing, but I suppose the area of energy efficiency is very intriguing for all of us. 

I think we all agree that the expertise does reside in the SBA now 

based on all of the discussions to provide real assistance in this 

area. 

My question is, is it important? Is it important for us to work on 

developing that sort of expertise or we look at this being provided 

in some other way? Is it realistic to propose this sort of expertise 

there or should we have partnership arrangements that provide it 

in some other way? Mr. Sklar, I might ask that. 

Mr.SKLAR. You know, that is a good question. And I obviously believe—I am not thinking that the Committee ought to say, ‘‘We 

ought to bring ten people into the SBA and create a new program,’’ 

but I do believe the administrator ought to anoint someone to say, 

‘‘You look at energy and environmental lending.’’ And then you 

start developing teams with the other agencies but really have it 

more edgy so that you can do something. It’s building up knowledge. 

Again, the President has said to do this. EPACT has said to do 

this. The other agencies are willing to cooperate, but there needs 

to be a vision thing at SBA to do it. And then it needs to dialogue 

with these other programs that are also providing personalized assistance so they become more educated and implement. That is all 

I am asking, but you still have to have somebody who is responsible at the top of the agency for this kind of program area. 

I do agree with the congressman that it doesn’t make sense to 

build a whole department around it. 

Mr.JEFFERSON. That is very helpful. With respect to disaster recovery, the approach that is taken in the bill is I think to provide 

some way to deal with the caps and to permit these to get up and 

running in a hurry. 

I don’t know if even that is fast enough. Might it be that we 

might just insist on some automatic waivers in case of certain disasters when they are bad enough or extend long enough? 

Somehow or the other, there just needs to be a quicker way to 

get at it. Have you given any thought to how we might even do this 

more quickly than the bill provides us an opportunity to do it? 

Mr.ROWE. Mr. Jefferson, in the SBA’s legislative package, one of 

the items that we addressed specifically regarding this was expanding the utility of the portability grants for that purpose. One of the 

other things we would support is some legislative changes so that 

we don’t have the restriction, unfortunately, we ran into in Katrina 

regarding operations of SBDCs beyond, I guess, what you would 

call their borders so that an SBDC in New York could assist in 

Texas and vice versa without worrying about any restraints from 

the agency. 

27

And the portability grants go along with helping the SBDCs defray those costs because obviously if you’re sending folks across the 

country to assist in counseling, you’ve got to pay their travel and 

other expenses. 

Mr.JEFFERSON. Mr. Higgins? 

Mr.HIGGINS. I am all for as much flexibility as you can get in a 

disaster situation. And I think the less paper and process involved, 

the better off you are. I think that one of the real advantages of 

this legislation is that it allows us to build some capability to get 

it in place. 

Now, the reality is that SBDCs or people from SBDCs in other 

states did go to the Gulf Coast. We sent folks out of Pennsylvania 

because they had training. But, you know, it was tied up in some 

complex negotiations, and there were silly limitations on it. 

You know, I think if this legislation passes, you know, you could 

put in place a framework that takes care of all of that bureaucratic 

nonsense on the front end so that when it is time to go, your people 

just go. 

ChairwomanVELA ́ ZQUEZ. The Committee will stand in recess. 

And we will resume after these two votes that will take around 20 

minutes. 

[Brief recess.] 

ChairwomanVELA ́ ZQUEZ. The Committee is called to order. As 

you can imagine, we’re going to have a series of votes in the next 

maybe 15 more minutes or 20 minutes. So we’re going to try to 

wrap this up as soon as we can. 

I would like to make some questions. Mr. Chabot is right here 

and having a meeting. And as soon as he finishes, he will join us. 

My question is addressed to Mr. Higgins. The proposed legislation, the draft legislation, that we’re considering takes the SBDC 

program in a new direction by creating initiatives tailored to specific entrepreneurial needs. This differs from the baseline program, 

which provides a funding base on a population-based formula. 

Conceptually do you believe that this is the right direction to 

take the SBDC program in? 

Mr.HIGGINS. Let me begin by saying I think it is absolutely critical that the funding for the basic SBDC activities, those things 

that we do, all do, every day over and over again in working with 

the small business community be maintained and be protected. 

And I would not want to see anything happen to reduce the base 

funding for the SBDC. 

But moving to the next step, we all go through in each SBDC a 

strategic planning process on a regular basis, where we are looking 

at the needs of the small business community and trying to develop 

strategies and programs to meet those needs. 

And I think that this set of initiatives if funded in addition to 

the base funding would provide us the wherewithal to really move 

the SBDCs to the next level, where you not only were providing the 

basic meat and potatoes of small business development center assistance but were able to tailor your program to meet critical issues 

and meet some critical needs of small businesses in each of the 

states of the SBDC. 

ChairwomanVELA ́ ZQUEZ. Thank you, Mr. Higgins. 

28

Mr. John, the need for entrepreneurial development assistance in 

Native American communities is critical given the large number of 

individuals who are interested in starting their businesses and also 

given the fact of the high unemployment rate that you have in 

those communities. How will the Native American Business Development Act of 2007 introduced by Representative Udall support job 

growth in these communities? 

Mr.JOHN. Thank you for that question, Madam Chair. 

I think right now, as we speak, we don’t have a small business 

development center on the Navajo reservation right now. We do 

have it in border towns, like Farmington, Gallup areas, just adjacent to the reservation. And with this bill, we would like to expand 

onto the reservation to help assist some of these Native American 

entrepreneurs. And I think that is a need. 

And, of course, the tribal government is doing what they can to 

cut down some of these lengthy processes to make it easier to start 

a business on the Navajo reservation because some of these laws 

have already been mandated by Congress under the Code of Federal Regulations that we have to abide by through the Bureau of 

Indian Affairs. 

ChairwomanVELA ́ ZQUEZ. Thank you. 

Ms. Goldstein, the SBA’s mismanagement of the disaster loan 

program has created unnecessary difficulties for small business 

owners in disaster-affected areas. The counselors at SBDC have experience with SBA loans and know what is required to help these 

business owners to complete their disaster loan applications. Would 

the SBA support giving these counselors a greater role as first responders to a disaster like this? 

Ms.GOLDSTEIN. Well, I think you know, Madam Chair, that we 

are in the process of producing a handbook for how to handle future disasters. It’s due here in Congress June 1st, I believe it is. 

And we have gone to great attempts, and we have carried the message. And the SBDC has been part of the planning of that process. 

And they expressed that they certainly are capable of coming on 

the scene of a disaster sooner than they were previously. 

So I think when you see that document, which is being finished 

as we speak, and it comes up here, you will see a much different 

approach. You know, we learned a lesson, obviously. 

ChairwomanVELA ́ ZQUEZ. Well, we are discussing today legislation regarding the SBDC and the structure of problems that we 

saw regarding the disaster or lack of response, appropriate response, effective response, to the Katrina victims. And one of the 

issues that we saw was the fact that you didn’t have on the ground 

the amount of people that were needed based on the magnitude of 

the disaster. 

Since I don’t have that package in front of me that disaster plan 

that the administration has been working on and that was supposed to have even before Katrina hit the Gulf Coast, my question 

to you is, do you support the counselors from the SBDC to be part 

of the first responders? 

Ms.GOLDSTEIN. I don’t know that I can answer the question not 

having seen the final product. 

ChairwomanVELA ́ ZQUEZ. Okay. 

29

Ms.GOLDSTEIN. I was definitely part of letting the deputy who is 

responsible for writing it—we met with the SBDC, with SCORE, 

women’s business centers and talked about how their role could be 

enhanced in the future. And that’s the best I know today. 

ChairwomanVELA ́ ZQUEZ. Who met with them, the SBDC? 

Ms.GOLDSTEIN. We did a conference call. Some people came to 

us. 

ChairwomanVELA ́ ZQUEZ. You were a part of that call? 

Ms.GOLDSTEIN. Yes, that call, one of many calls and meetings 

that took place as she was writing the handbook. There is a total 

team of people. 

ChairwomanVELA ́ ZQUEZ. But you don’t recall what specific role a 

person from SBDC will play? 

Ms.GOLDSTEIN. It was certainly told to her that they would like 

an earlier role. She heard that. What the final product looks like 

I don’t know. 

ChairwomanVELA ́ ZQUEZ. Okay. I want to note for the record that 

I will be submitting written questions to SBA. In particular, I will 

be submitting a question on the SBDC proposal and how SBA will 

administer it. Given our interest in this issue, I would like an answer by the end of the week. 

Ms.GOLDSTEIN. Okay. I will take that back. 

ChairwomanVELA ́ ZQUEZ. As part of the legislative package that 

SBA submitted to Congress, you proposed that Congress give SBA 

full access to SBDC client information. However, I just want to 

make it clear that current law already allows SBA to access SBDC 

client information for the purpose of conducting client surveys. 

So how can we be sure this information will be kept confidential? 

And, for example, what protects a client seeking assistance on tax 

questions from having the information conveyed to the IRS, Ms. 

Goldstein? 

Ms.GOLDSTEIN. Well, the information I know most about is that 

which goes for the impact survey. It goes directly to a company. 

And mostly we use it by numbers and addresses to send mail. 

They keep the records. They are not made public. They are just 

used by the vendor that we choose to conduct the survey. And none 

of the results are stated by name. 

We don’t use personal information for that. It’s aggregated data. 

And so I think, you know, we make every move to conduct privacy. 

I spent 12 years of my life in survey research. And that’s part of 

it, the privacy thing. And we would not. We would not do it. You 

can ask for their permission if they want to be quoted on it, but 

we wouldn’t do that. 

ChairwomanVELA ́ ZQUEZ. Mr. Higgins, what do you see as the 

benefit of client confidentiality protections? And do you believe they 

should be weakened or strengthened? 

Mr.HIGGINS. Well, I think the basic benefit is if we can’t offer 

confidentiality, absolute confidentiality, to the clients, many are not 

going to come to us for assistance at all. 

And many who do are not going to be willing to share things like 

financial statements and sensitive business information. And that 

would make us fairly ineffective as business consultants if we don’t 

have access to all of the information we need. I mean, it won’t 

30

work. They won’t come. And it won’t work if they come and don’t 

share. 

I think anything you can do to strengthen the confidentiality provision is something that you certainly should do. 

ChairwomanVELA ́ ZQUEZ. Thank you. 

Mr.HIGGINS. Thank you. 

ChairwomanVELA ́ ZQUEZ. Mr. Chabot? 

Mr.CHABOT. Thank you, Madam Chair. I will be very brief because we have, again, votes on the floor. 

Mr. John, I hadn’t gotten around to you. And I understand the 

Chair already asked you a question about it, but if I could just very 

briefly? You had mentioned in your testimony the challenges, the 

difficulty it is to start a business on Indian land, and the 60 steps 

that you have to go through and sometimes taken up to 2 to 3 

years to go through the process. 

I just wanted to make sure that you are satisfied that the legislation that we are considering here will at least help to improve that 

situation. Is that correct? 

Mr.JOHN. Yes, that is correct because a lot of these steps that I 

mentioned in my testimony are where the businessmen need technical assistance and also putting their business package together 

and financial and whatever that they need for the banking institution and then also help them. 

Counseling is a big issue after they get frustrated for being in 

the system for so long. Then they just quit. And then I think this 

legislation will be part of the area that will at least motivate them 

that the SBDC is also doing something on the Navajo reservation, 

which we don’t right now. 

And, however, we do have 21 SBD offices statewide in New Mexico. So a lot of the Native Americans are already coming to SBDC 

for assistance. And we’re helping them as much as we can. And I 

think that this legislation will be one of the red tape that will be 

cut a little bit at a time. Hopefully in the future we won’t have to 

go through 60 steps or sometimes more. 

Mr.CHABOT. Okay. Well, thank you very much. 

Mr.JOHN. At one time it was 121 steps, just for your knowledge. 

[Laughter.] 

Mr.CHABOT. Thank you. So we are at least heading in the right 

direction. All right. Well, thank you very much, Mr. John. 

ChairwomanVELA ́ ZQUEZ. Okay. Well, with this, it concludes this 

hearing. I want to thank all of the witnesses. And I ask unanimous 

consent that the members will be given five legislative days to 

enter into the record any statement or extraneous material that 

they might consider important. 

This Committee adjourns. The hearing adjourns. 

[Whereupon, at 12:19 p.m., the foregoing matter was concluded.]

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