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94–111 PDF 2004

SMALL BUSINESSES CREATING JOBS AND

PROTECTING THE ENVIRONMENT

HEARING

BEFORE THE

SUBCOMMITTEE ON REGULATORY REFORM AND 

OVERSIGHT

OF THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

SECOND SESSION

WASHINGTON, DC, APRIL 22, 2004

Serial No. 108–60

Printed for the use of the Committee on Small Business

(

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

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

JIM DEMINT, South Carolina 

SAM GRAVES, Missouri 

EDWARD SCHROCK, Virginia 

TODD AKIN, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

TRENT FRANKS, Arizona 

JIM GERLACH, Pennsylvania 

JEB BRADLEY, New Hampshire 

BOB BEAUPREZ, Colorado 

CHRIS CHOCOLA, Indiana 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

FRANK BALLANCE, North Carolina 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

GRACE NAPOLITANO, California 

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

DENISE MAJETTE, Georgia 

JIM MARSHALL, Georgia 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

BRAD MILLER, North Carolina 

[VACANCY] 

J. MATTHEW SZYMANSKI, Chief of Staff 

PHIL ESKELAND, Policy Director 

MICHAEL DAY, Minority Staff Director

SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT 

EDWARD SCHROCK, Virginia, Chairman 

ROSCOE BARTLETT, Maryland 

SUE KELLY, New York 

TRENT FRANKS, Arizona 

JEB BRADLEY, New Hampshire 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

[RANKING MEMBER IS VACANT] 

DONNA CHRISTENSEN, Virgin Islands 

ENI F. H. FALEOMAVAEGA, American 

Samoa 

ANI ́BAL ACEVEDO-VILA ́ , Puerto Rico 

ED CASE, Hawaii 

DENISE MAJETTE, Georgia

ROSARIO PALMIERI, Senior Professional Staff

(II) 

C O N T E N T S 

WITNESSES

Page 

Lindell, Mr. Craig, President, Aquapoint .............................................................. 4

Seydel, Mr. Scott, President, EvCo Research ........................................................ 6

Catron, Mr. Phil, President, NaturaLawn of America ......................................... 8

Clevey, Mr. Mark H., Vice President, Entrepreneurial Development, Small 

Business Association of Michigan ....................................................................... 10

Farland, Dr. William, Deputy Assistant Administrator for Science, Office 

of Research and Development, U.S. Environmental Protection Agency .......... 12

APPENDIX

Opening statements: 

Schrock, Hon. Edward L. ................................................................................. 33

Prepared statements: 

Lindell, Mr. Craig, President, Aquapoint ....................................................... 35

Seydel, Mr. Scott, President, EvCo Research ................................................. 46

Catron, Mr. Phil, President, NaturaLawn of America .................................. 49

Clevey, Mr. Mark H., Vice President, Entrepreneurial Development, 

Small Business Association of Michigan ..................................................... 54

Farland, Dr. William, Deputy Assistant Administrator for Science, Office 

of Research and Development, U.S. Environmental Protection Agency .. 56

(III) 

(1)

SMALL BUSINESSES CREATING JOBS AND 

PROTECTING THE ENVIRONMENT 

THURSDAY, APRIL 22, 2004

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS

SUBCOMMITTEE ON REGULATORY REFORM AND OVERSIGHT

Washington, D.C. 

The Committee met, pursuant to call, at 10:30 a.m. in Room 

2360, Rayburn House Office Building, Hon. Ed Schrock, [chairman 

of the Committee] presiding. 

Present: Representatives Graves, Ballance, Kelly, Majette and 

Velazquez. 

Chairman SCHROCK. Good morning everyone. The hearing will 

come to order. 

Good morning, ladies and gentlemen. We are here today to talk 

about an often overlooked part of Earth Day, which if you did not 

know is today, the private sector’s contribution to bettering our environment. We also have a reason to celebrate. Over 94 percent of 

our population is served by water systems that report no violations 

of health-based standards. Our air quality is equal to or higher 

than that in Europe. There has been a 55 percent decline in the 

release of toxic emissions since 1988, and since 1980, emissions of 

the six principal air pollutants have been cut 48 percent while the 

economy’s GDP grew 160 percent, and energy use rose 42 percent. 

Some of those successes have come as a result of entrepreneurs 

in our society. Among the innovative and fast-growing small business sector, many businesses are dramatically increasing the efficiency and productivity of our natural resources. 

Whether creating technologies to reduce pollution, increase recycling and recovery, or leave a smaller footprint on the environment, 

these job creators are also creating environmental benefits. These 

small businesses have been nicknamed Green Gazelles. 

I am pleased to have several of those businesses with us today, 

each of whom deserves special praise for their contribution to our 

economy and to our environment. I truly believe that solutions to 

many of our environmental problems will come from entrepreneurs 

like the three of you who are with us today. 

The Environmental Protection Agency has joined us as well 

today,and I thank Dr. Farland for his appearance with us. 

Today, we get to look at EPA’s efforts in an area not always associated with the agency. We get to examine not EPA’s command and 

control approach to regulating businesses, but instead we will look 

at the programs that incentivize environmental improvements, proVerDate 0ct 09 2002 18:08 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 G:\HEARINGS\94111.TXT MIKEA
2

vide opportunities for partnerships with the agency, and encourage 

businesses to voluntarily make environmental strides. 

I really appreciate you all coming here today, and I look forward 

to your testimony, and then, of course, the question and answer period. 

At this time I am delighted to yield to Ms. Velazquez from New 

York. 

Ms. VELAZQUEZ. Thank you. Thank you, Mr. Chairman. In observance of Earth Day, it is important to recognize the contributions that are nation’s small businesses have made to the environment. It is possible to create federal policies that will benefit not 

only small businesses, but also our environment. The two actually 

go hand in hand, and this hearing today remind us of that. 

Small businesses are the number one job creator in this country, 

creating 75 percent of all new jobs added to the U.S. economy. A 

good portion of these jobs result in a safer and healthier environment. In fact, small firms produce 2.4 times as many innovations 

as their large competitors, and higher, 39 percent of high-tech 

workers such as scientists, engineers, and computer workers; in addition, highly innovative, new firms create disproportionately greater share of net new jobs than those start-up firms with lesser innovation intensity. 

It is our small business sector that is excelling at protecting the 

environment through innovation. Whether it is waste management, 

energy conservation or architectural development, Green Gazelles 

are working to improve the environment by finding new advance 

ways to do just that. 

While the Green Gazelles are fast growing companies, they are 

also the quick producers of innovative new products and services 

that are solving our country’s environmental problems. A large 

number of Gazelles are responsible for creating technologies to reduce pollution and are increasing recycling and recovery. 

Many of these Gazelles have helped to heighten the efficiency 

and productivity of our resources and they are super job creators. 

It is the innovative new ideas brought to the marketplace by talented entrepreneurs that result in not only more job creation but 

also in a brighter economic future. 

However, despite the tremendous contributions of these companies, they are still facing an array of challenges. This unique sector 

that helps paint the way towards our country’s environmental 

health has trouble finding access to capital. They support proposals 

that will make it easier for them to raise the money they need to 

grow, such as providing them with the flexibility to retain some of 

their taxes for financing during high growth periods. 

The Gazelles are also in need of access to long-term, low-interest 

loans from either public or private sources, and understand the 

benefits of strong 7(a) and 504 lending programs. They support tax 

initiatives that ease the process for businesses to purchase new energy-efficient equipment and power devices to replace outdated machines. 

They are also behind a federal tax credit for small business purchases of environmental friendly products and services. Green Gazelles are interested in federal procurement policies that will give 

consideration based on the environmental qualities of their prodVerDate 0ct 09 2002 18:08 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 G:\HEARINGS\94111.TXT MIKEA
3

ucts. They need a strong environmental protection agency, small 

business innovation research program to provide funds for innovative research on environmental problems. 

It is apparent that innovative technologies lead the way to more 

cost-effective environmental protections on job creation for our 

economy. The unique sector of Green Gazelles plays a vital role in 

making this happen, resulting in an improved economy and improved quality of life. 

The need for small businesses to respond to environmental concerns with new solutions is growing, and we need to encourage this 

process. Our nation’s environmental problems can be solved by innovative new technologies, most of which are created by our nation’s small businesses if we help them to overcome some of these 

challenges. We must work to ensure that federal policies benefit 

small businesses in a way that will enhance the overall environmental health of our nation. 

I want to thank the small business owners that are here for taking time out of their schedule to talk to us, and I look forward to 

hearing their testimony. 

Thank you. 

Chairman SCHROCK. Thank you, Ms. Velazquez. 

Judge Majette, do you have an opening statement? 

Ms. MAJETTE. Yes. Thank you, Mr. Chairman. 

I would like to take this opportunity to introduce Mr. Scott 

Seydel, CEO and board chairman of EvCo Research and the president of Seydel Companies. EvCo research, located in Atlanta, Georgia, is a model business, a profitable venture that creates wealth 

and jobs while at the same remaining true to its deep sense of social and environmental responsibilities. 

EvCo’s natural step sustainable principles contribute to a culture 

in which the success of business correlates to an improvement and 

benefit for all of society. 

The value of EvCo’s work is substantial. According to the EPA, 

nearly 95 percent of the 24.2 million tons of plastic waste generated each year goes unreclaimed, but EvCO reclaims scrape plastic beverage and water bottles, and uses them to make a liquid 

coating that is then used to recoat corrugated boxes that can then 

be recycled six to 12 times. 

I wish for the continued success of EvCo as it works toward creating a more sustainable waste management system, and I think 

Mr. Seydel for his leadership of EvCo Research and his vision for 

a bright future for all of America. I look forward to hearing his testimony this morning, and I look forward to the great—for him continuing the great work that he has begun in Atlanta, Georgia. 

Welcome. Thank you. 

Chairman SCHROCK. Thank you, Judge. 

We thank all of our witnesses for being here. Our first witness 

today is Craig Lindell from Massachusetts, and Congressman Barney Frank has agreed to come and introduce Mr. Lindell. 

Mr. FRANK. Thank you, Mr. Chairman, to you and the ranking 

member for calling this hearing and for the courtesy of letting me 

as a nonmember introduce someone that I am really very proud of, 

proud of in the sense that he comes from the area I am privileged 

to represent. I deserve absolutely no credit for his good work, but 

4

you know, we sometimes get blamed for things that are not our 

fault, so I do not mind——

[Laughter.] 

Mr. FRANK.—so I do not mind offsetting that sometimes with a 

little reflective glory that is unearned. 

Mr. Lindell is really extraordinarily well suited to be make this 

presentation, as indeed due to the work he has done, because he 

is himself a man with a business background. He comes from a 

family that has had a distinguished background in southeastern 

Massachusetts in the City of New Bedford for some time, both in 

business and even the politics. He has a great grandfather who carried the title of senator, which might be of interest to my colleague 

from Georgia. 

And what he has now done is really something that we very 

much appreciate, which is to take his expertise as a businessman, 

and his interest in technology, and put them into the service of the 

community by demonstrating how we can make technology work 

for us, make it pay for itself ultimately. 

But it is also important that we are here, and that we are here 

with EPA, and I think too often people take this notion of conflict 

between the private and public sectors, and I think we understand. 

Unless we are able to work out a series of partnerships between 

the private and public sectors in which each makes a contribution 

that only it can make, we will not get anywhere. 

And the notion that the government and the private sector are 

enemies is a great outgrowth of progress, so I am very grateful to 

Mr. Lindell for his own marriage of economic and business skills 

with his environmental concern, and his technological achievement, 

and his really exemplifying for us the importance of this. And I 

thank you for giving all of these people a chance to help us form 

the right policy that is going to carry us forward. 

Chairman SCHROCK. Thank you very much, Congressman. 

Before we begin reviewing testimony from our witnesses, I want 

to remind everyone that we would like each witness to keep your 

oral testimony to five minutes if you can. In front of you on the 

table you will see a box that will kind of let you know when your 

time is up. When it lights yellow, you have one minute. And when 

five minutes has expired a red light appears, the trap door opens, 

and you will know that it is over. So once the red light is on the 

Committee would ask if you could wrap up your testimony. 

Mr. Lindell, after that introduction, welcome. The floor is yours. 

STATEMENT OF CRAIG LINDELL, AQUAPOINT, NEW BEDFORD, 

MA 

Mr. LINDELL. Thank you, Mr. Chairman. 

Aquapoint is a waste water treatment company in pursuit of an 

infrastructure. Most people are in pursuit of a market. But we 

think that there is an infrastructure out there that will literally 

pay for itself. It is a fairly classic start-up, five or six years of losing money, five or six years of breaking even, now about a 30 percent annual growth rate for the last three or four years. We are 

expecting to double or triple probably in the next couple of years. 

5

Most of our 17 employees own equity. I actually capped my equity in the company at 50 percent. We subcontract all our manufacturing. We are trying to be smart business. 

What makes us different is we chose a path contrary to the rest 

of the industry. The reason has to do with Earth Day. We now 

know what a few glimpsed thirty years ago, and that is that we 

have to live within the carrying capacities of the natural systems 

of the planet. 

Infrastructure is no longer about the delivery of water and the 

disposal of waste water. Infrastructure is about integrated water 

resource management. It is about some form of adaptive relationship between human communities and the earth’s supporting systems. 

Each adaptive situation is different. The wastewater we treat to 

irrigate a park is different from the water we discharge to the Potomac. An old crab house in the Potomac could add treatment and 

dramatically increase its property values. For a supermarket, treatment is a one-year return on investment. Every customer becomes 

a market of one. It is an interesting problem. 

Aquapoint is structured—sorry about that. I apologize. I got my 

pages mixed. 

Every customer becomes a market of one. This is why the EPA 

acknowledges the limits of our current regulatory framework are at 

hand, and the complexity of the issues require a change in paradigm. That is the Office of Water 2001. 

Mike Leavitt calls it a new sociology enabled by new technology. 

What is critical is that we provide infrastructure, an infrastructure 

flexible and robust enough to maximize the potential of economic 

development and asset appreciation, and designed to minimize the 

impact on natural systems and sustain the resources that provide 

for us, and it has to be affordable. There is no money coming out 

of Washington that I can see. So the trick is to design an infrastructure as such. 

The variety of dynamic and changing characteristics between the 

communities and the water resources will require a matrix of technology, skills, related products, and services as variable and adaptive as conditions the community must address. 

Our current onsite wastewater systems basically are large polluter of our groundwater, and central systems are large drainage—

infiltration is a large drainage of our groundwater supply. 

Aquapoint is structured to provide this matrix with knowledgeable enterprise partners, and a suite of technologies that are modular, flexible, linked, affordable, and readily deployable. This is an 

infrastructure that you can have on a just-in-time basis. 

Its adaptive small infrastructure on a just-in-time basis and for 

a fraction of the cost of conventional sewer, and that adaptive 

small infrastructure is now being considered by the Water Environment Federation. It is in the process of considering the change of 

the name of one of its—that is not for me, is it? 

[Laughter.] 

Chairman SCHROCK. No, but it is not a bad idea. 

Mr. LINDELL. Aquapoint’s treatment process is a biologically stable, and they are less management-intensive. They require less 

electricity. They produce a fraction of the biosolids of conventional 

6

technologies. Some counties in the south are already zoning for distributed sewer where they know they are not going to get money 

for central sewer. 

Cape Cod has its own regulatory authority because the nitrogen 

levels on Cape Cod are damaging both to its groundwater and to 

its coastal environment. Mobil, Alabama will take waste water 

from an overloaded interceptor and treat it on location, and irrigate 

a park. It is a new EPA project, so mainframe systems are going 

to use distributive systems. 

This is not about Aquapoint, but about what Aquapoint is learning in the marketplace. This is about the Green Gazelle premise 

that environmental preservation can be job and capital forming. It 

can be. Our average wage is over $60,000 a year. Releasing its potential is important to our economy and the natural systems whose 

limits we are beginning to strain. 

Thank you. 

[Mr. Lindell’s statement may be found in the appendix.] 

Chairman SCHROCK. Thank you, Mr. Lindell. 

Mr. Seydel, you have already been introduced properly by the 

Judge, so the floor is yours. Welcome. 

STATEMENT OF SCOTT SEYDEL, EvCO RESEARCH, ATLANTA, 

GA 

Mr. SEYDEL. I have, and I really want to thank the Committee 

for having us here and getting a chance to tell what we know about 

small business and environmental protection, and my hat’s off to 

Congresswoman Majette for that introduction. She actually gave 

my remarks before we start here. 

Chairman SCHROCK. Then we will go right on to Mr. Catron 

then. 

[Laughter.] 

Mr. SEYDEL. I will go ahead and read them again for the record. 

My wife told me this morning that the way I talk I should give a 

two-and-a-half minute talk because it is going to take the whole 

five minutes to get it across. 

EvCo is a really interesting company that was conceived about 

10 years ago, and we spent about five years doing a lot of very 

high-level technical research to see what could be done using municipal waste as raw materials. 

And Ms. Majette mentioned one of the projects that we work 

with, which is converting plastics that are going into the waste 

stream, mostly bottles and the cup you are drinking out of there, 

and food containers in your refrigerator. And as she mentioned, the 

vast majority of these products are going into the dump; not only 

are they going into the dump, but they are largely non-biodegradable, which means they are actually blocking the processes that 

work within our landfills and compost to make these materials 

more valuable as biological nutrients. 

So what we have done is basically tried to figure out constructive 

ways that these municipal wastes can be used in a way where the 

energy and the resource that is invested in them can be used again 

to make another product. And we have done that very successfully. 

In fact, we have four points that we follow very, very closely in 

our research, and that is, any product that we make, first of all, 

7

has to be made out of a solid waste, a municipal waste that is recovered from the waste stream. The second thing is we have to recapture all of the energy and all of the resources that have gone 

into that product to begin with. Thirdly, we have to make sure that 

the product that we produce is itself recyclable or compostible or 

both; and then fourth, we do not make a product unless in selling 

and applying it, it solves a major environmental and sustainability 

problem. 

As a typical example I would mention to you this morning, about 

two billion pounds of paper, of fiber from trees are used every year 

in making food packaging, perishable packaging, whether it is cardboard boxes that are full of fish and ice, or broccoli and ice, or 

whether it is cartons that you take your pizza home in, or things 

from the bakery. All of those are non-recyclable uses of pulp fibers, 

and most of those fibers are virgin fibers. 

In other words, a tree is cut and has 100 days before it has been 

converted into paper, converted from paper into corrugated, corrugated into a box filled with chicken and ice, shipped to the 

Kroger store, and gone into the dump. That particular box, I think, 

as Congressman Majette pointed out, is usable, the fibers in that 

box are usable six to 12 times if you can recycle it. 

So what we have done is we have made liquids that we can put 

on those boxes that are still water repellent. We have made them 

out of recycled materials, and they replace non-renewable petrochemicals that are used in those coatings now, and paraffin waxes 

which we largely import now from places like China where they 

have high paraffin petroleum content. 

So we can right now take that two billion pounds of paper out 

of the waste hopper. There is another six billion pounds that are 

used in things like frozen food containers in your refrigerator, even 

Ben and Jerry’s ice cream, we can convert those too because all of 

those can be repulpable and recyclable. 

Now we are working on things like replacing copper chrome 

arsenates that are applied to lumber in order that they can be used 

outside to build decking or to build children’s play grounds. Those 

poisons have been proven to be carcinogeneses and they are in the 

subterranean waters that are being piped back to people for consumption. 

So those have already been banned and within a couple of years 

will be gone. We think we have a solution for replacing those products, and again it is made out of recycle materials. 

So that is the EvCo story. You have got something in your trash 

heap that you would like for us to begin to work on, we have got 

a bunch of Ph.D.s down in Atlanta that would like to get their 

hands on it. 

Thank you. 

[Mr. Seydel’s statement may be found in the appendix.] 

Chairman SCHROCK. Great. Thank you very much. Fascinating 

subject. I live in Virginia Beach, and for years and years they took 

everything and took it to the dump. Now every two weeks Jude and 

I put out in front our house a 90-gallon blue container on wheels, 

and we are shocked at how fast that fills up every time, and for 

years and years and years that was going into a landfill somewhere, so it is an amazing process, and I appreciate what you do. 

8

Mr. SEYDEL. We thank you. Those are our raw materials. 

Chairman SCHROCK. Yes, that is great. 

We are now going to hear from Mr. Phil Catron. Your name is 

very familiar to me. My first chief of staff was named Rob Catron 

from Florida. I guarantee you are not related to him. I am not sure 

you want to be, so you know. 

[Laughter.] 

Mr. CATRON. I am not going there. 

Chairman SCHROCK. No, you are not going there. 

Mr. Catron is the president of NaturLawn of America that is 

headquartered up in Frederick, Maryland. Congressman Roscoe 

Bartlett would love to have been here, but his schedule just does 

not permit that. 

Mr. Catron holds degrees in agronomy from the University of 

Delaware, and plant science and herbicide physiology from Rutgers. 

And we are delighted to have you here. The floor is yours. 

STATEMENT OF PHILIP E. CATRON, M.S., CPAg, NATURALAWN 

OF AMERICA, INC., FREDERICK, MD 

Mr. CATRON. Thank you, Congressman Schrock, and members of 

the Committee. I do appreciate this time very, very much. 

There is a couple of traits that all Gazelles or entrepreneurs 

share in common, and the one that I think you can focus in on is 

that we identify a need, and then try to fill that niche. And as you 

hear from all of us, this is kind of where I think all of our businesses are coming from. 

And then on top of that it is sometimes easier to show people 

what you are doing as opposed to try to explain what you are 

doing, and educate them to train or to change their ways. 

So with that said, in 1987, NaturaLawn of America started in 

the basement of my home as an alterative to a chemical lawn care 

company, or a traditional chemical lawn care company, which I had 

been a part of for 10 - 12 years. Not that chemical lawn care is bad, 

there is just an alternative way. 

And so hysterically—hysterically—historically there was——

Chairman SCHROCK. Leave the hysterics to Congress, right. 

Mr. CATRON [CONTINUING] The basic approach to lawn care is 

that one program fit every lawn out there, so whether or not you 

needed material that was applied to the property, it is very tantamount to if you cut your finger instead of putting a band-aid strictly on the cut, you would wrap your entire body in gauze, and that 

just did not seem to make a lot of sense. 

So promoting that was the green myth concept, that all lawns 

could be 100 percent weed free and green year around, and quite 

frankly, that is a marketing myth. It just does not exist. I wish it 

did, but it does not. 

So we started the company with that in mind, and obviously any 

new start-up reaches or hits some walls, some barriers. One, because we were taking a totally different approach to a traditional 

chemical. We wanted to be organic and natural biological. There 

were no products that would compete in the scale that we needed 

to. In other words, it had to be economic, but you had to give results. 

9

And yes, there were 100 percent natural organics out there, but 

they did not fit the economic scale, nor did they fit the results. 

So we scientifically blended natural organics with other components of synthetic organics to come up with a program of an organic-based product line that we have developed on a proprietary 

nature with NaturaLawn of America. That enabled us to wean 

lawns that had been treated chemically for years off of the total 

chemical basis to a closer and closer 100 percent natural organicbased program. 

The second hurtle, if you will, was the consumers tend to think 

that if a little is good, a lot is better. We call that the glub method. 

You know, one or two glubs, aaah, put a little bit more in there, 

and then we will try that. So there was an educational process that 

had to be done as well. 

And thirdly, since there were no products, we kind of misnamed 

them or renamed them as organic-based. It was a term that had 

not been around and was not widely accepted, and it has now become virtually accepted across the national within our industry, 

which is kind of nice. 

From a consumer’s point of view, we did not know how we might 

be accepted, but over the past 17 years we have literally grown 

from a zero customer base to over 45,000 customers across the 

United States. We are operating in 25 states with 74 locations, and 

these are all francished locations. We generate in excess of $24 million a year and employ over 400 people. 

One of the things that we really zero in on is our mission statement. It is based on three simple words: service, focus, and innovation, and the innovation is the fun part, and one of the things that 

I would like to introduce you to is that things that we are working 

on for the future that really tie in with, I think, EPA, it ties in 

with USDA, it ties in which all kinds of research is our goal is to 

be 100 percent food-grade fertilizer, 100 percent food-grade natural 

organic fertilizer, and we have got some stuff there already. 

And then secondly, we are very heavy into the beneficial microbes that are already existing in the soil, and one of our latest 

developments is what we call NP, or no phosphorus. States have 

been basically regulating the use of phosphorus because of algae 

blooms and pond eutrophication. Three years ago we introduced a 

no phosphorus program. We have a proprietary microbe system 

that literally is put on our fertilizers that contain no phosphorus. 

These microbes work in the soil, because phosphorus is tied up in 

the soil, and as the plant needs it, it release it from the soil to the 

plant and then shuts down, so there is no excess phosphorus going 

into the soil. 

I will wrap this up by saying over the years we have consistently 

been able to reduce the environmental impact that chemicals and 

pesticides have, and in 2002 alone, our latest statistics that came 

back, we have reduced the use of what we would call petroleumbased fertilizers by over 2.5 million pounds into the environment, 

and by synthetic pesticides by over a million gallons. 

We are pretty proud of that fact and appreciate the time, and the 

ability to talk to you. Thank you. 

[Mr. Catron’s statement may be found in the appendix.] 

10

Chairman SCHROCK. Thank you, Mr. Catron. Every day I learn 

a new statement, and I think today it is the glub method, right? 

Mr. CATRON. Yes. 

Chairman SCHROCK. That is pretty great. 

Mr. CATRON. And we do have a franchise in Virginia Beach. 

Chairman SCHROCK. Oh, do you? Oh, good. Oh, really? 

Mr. CATRON. Yes. 

Chairman SCHROCK. Okay, I may want to talk to you some time. 

Yes, great. That is why you brought him here, is that right? Okay. 

Our next witness today is Mark Clevey. We are glad to have you 

here. Mr. Clevey is the vice president of Entrepreneurial Development, and Director of the Green Gazelle Development Project at 

the Small Business Association of Michigan, which I believe is in 

Lansing. 

We are delighted to have you here. The floor is yours. 

STATEMENT OF MARK H. CLEVEY, GREEN GAZELLE DEVELOPMENT PROJECT, SMALL BUSINESS ASSOCIATION OF MICHIGAN 

Mr. CLEVEY. Thank you very much, Congressman Schrock. 

My purpose today is to talk about an economic development in 

Michigan and how we are trying to grow more companies like the 

three you have just heard from. Our goal in this project is pretty 

straightforward. 

We have teamed with the Center for Small Businesses in the Environment here in Washington, D.C. to look at barriers to growth 

for Green Gazelles, and let me just take a moment and define this 

so we are all clear on it. 

From our view, a Green Gazelle is a cutting-edge, fast growing, 

small business that researches, develops and commercializes breakthrough environmentally conscious technologies. These are the 

companies in the United States that also tend to generate most of 

the new jobs, most of the new wealth, and most of the new technology in the country; so this idea of Gazelle is a special thing. 

All small businesses are the background of our economy, but Gazelles are ones that are generating the new products and new technologies that are going to build the new industries that will offset 

those being offshored or impacted by globalization. 

In Michigan, we lost 185,000 manufacturing jobs in the last two 

years. We are trying to grow green manufacturers as fast as we 

can, and that is the essence of the Green Gazelle project we are 

doing in the state. 

Center for Small Businesses and SBAM, agree on something very 

clear, and that is this: that there will be no transition to an environmentally sound economy without Green Gazelles leading the 

way. These companies are the ones who take the risks, who will 

bet their children’s college education on the deal. They are the risktakers. They are the ones who bet it all. They are the backbone of 

our economy. They are the ones who make this country strong, and 

they are the ones who are leading the charge in the environmental 

area as well. 

We have put together a program in the state that is a dedicated 

economic development and business development effort in collaboration with Michigan State University, a number of economic deVerDate 0ct 09 2002 18:08 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 G:\HEARINGS\94111.TXT MIKEA
11

velopers, and led by our organization, which is a 6,000-member 

small business organization in the state. 

We make our living in our organization by having these 6,000 

members pay us $165 a year in dues, and utilize the services and 

things that we provide. For Green Gazelles that includes a very, 

very dedicated effort into helping these companies get access to federal SBIR grants, to develop new technologies in collaboration with 

Michigan State University and others, a very dedicated effort in 

helping them overcome barriers to capital access, building business 

plans that are based on not just how they are going to meet their 

payroll, but how they are going to attract investors and take these 

companies public, helping them to get access to not Joe the banker, 

but discounted access to the best patent attorneys and best bankers 

in the state by aggregating them, and we use the power of these 

Green Gazelles to drive down prices and products and other things. 

We recently won an award from the U.S. EPA, Energy Star Program, for our project that we did that I just want to take a moment 

with. 

Our organization and myself went out and we funded the formation of a Michigan interfaith power and light organization, which 

is where new nonprofit made up of religious congregations across 

the state. We sent a team of auditors, energy auditors into each of 

those congregations, and they identify energy efficiency products 

that could be purchased, green products that could be purchased, 

and renewable energy opportunities that could be purchased. 

We then take those and aggregate them into a market, and then 

we go out and negotiate discounted and bulk prices from Green Gazelles for those kinds of products; energy efficient light bulbs would 

be an example; buying wind power; buying recycled materials. 

One of our project just looks at making recycling a cost product 

center—pardon me—a profit center by merging together different 

kinds of recycled materials from smaller congregations. 

So we find that we can use our program to stimulate the market. 

We can use our program to bring to the table people who are looking for markets, and we use our program as a way to facilitate the 

growth of Green Gazelles that respond to that market. 

We are not unique. There are organizations across the United 

States that could be doing what we are doing, and we are working 

for the Center for Small Businesses in the Environment to duplicate that. We are working with Jerry Lawson at the EPA Energy 

Star Program to showcase this model and we are working with the 

National Small Business Association here in Washington to work 

with our sister organizations in 23 other states to duplicate this 

model. 

Again, it is a business development model. Our success matrix is, 

is the small Green Gazelles that is being created or retained or expanded. That is what we are looking at, expanding their network, 

and basically we do whatever needs to get done to help them grow, 

including capital access barriers, removing regulatory barriers, 

stimulating new markets, and coming to Washington and educating people about what is going on. 

Thank you very much. 

[Mr. Clevey’s statement may be found in the appendix.] 

12

Chairman SCHROCK. Great, and we thank you for doing that. 

Fascinating concepts, especially your work with churches and synagogues. Great idea. 

Our last witness today is Dr. William Farland. Dr. Farland is the 

Deputy Assistant Administrator for Science in the Office of Research and Development at EPA. Dr. Farland holds a doctorate degree from UCLA in cell biology and biochemistry, a master’s degree 

in zoology from UCLA, and a bachelor’s degree from Loyola University in Los Angeles. I know where it is, I have been there, that is 

where my wife is from, so I do not know why I stuttered. 

Delighted to have you here, and the floor is yours. 

STATEMENT OF WILLIAM H. FARLAND, PH.D., OFFICE OF RESEARCH AND DEVELOPMENT, U.S. ENVIRONMENTAL PROTECTION AGENCY 

Dr. FARLAND. Thank you, Mr. Chairman. 

Good morning, Mr. Chairman, and members of the Committee. 

I am honored to appear before you today to discuss the U.S. Environmental Protection Agency’s activities to support development 

and implementation of innovative environmental technologies, 

many of which emphasize support for small businesses. 

The U.S. Environmental Protection Agency welcomes the interest 

of the Committee in this vital area. We believe innovative technologies lead to more cost-effective environmental protection and 

growth in jobs in the economy. More broadly, innovative technology 

can play an important role in moving to a model of environmental 

protection built on the principles of sustainable development, allowing us to achieve economic growth, and improve quality of life 

while protecting the environment. 

The EPA strongly encourages actions of the private sector to improve environmental protection. Creating or employing technologies 

to reduce pollution at its source, increasing recycling and recovery, 

finding less costly ways to treat or remediate pollutants are all 

ways being developed to lessen impacts on the environment. These 

technologies reduce the cost of complying with regulations and 

make environmentally friendly voluntary efforts possible. 

These same activities are also creating new jobs in a growing 

economy. We salute the small businesses, such as Green Gazelles, 

who are leaders in this area. EPA will continue to support efforts 

by the private sector, especially small businesses, to implement 

technology innovations for environmental protection. 

The EPA Administrator Michael Leavitt recently identified technology as one of the cornerstones of moving to a ‘‘better way’’ of 

achieving environmental protection. The development of environmental technologies is primarily the role of the private sector, and 

EPA’s programs are designed to support private development by 

addressing specific barriers that discourage or hold back the development and adoption of these technologies, particularly those barriers faced by small businesses. 

The EPA has a number of primary programs that provide such 

support to the public and private sector for the development of new 

cost-effective technologies, and these technology development programs managed and coordinated through EPA’s Office of Research 

and Development provide a continuum of support from early stage 

13

research to late stage commercialization. They include a number of 

programs I would like to briefly describe. 

The Small Business Innovation Research Program that you 

heard about earlier: While small businesses have historically accounted for over half of the innovation in the U.S., they often have 

difficulty getting equity capital for technology development. This is 

a particularly acute problem with regard to environmental technologies where regulatory changes can quickly change market opportunities and discourage private capital providers. I will say 

more about this program shortly. 

Another program is the Environmental Technology Verification 

Program. For years technology developers have been stymied in 

their efforts to sell new innovative technologies because potential 

buyers are often unwilling to take the risk that the technology will 

not perform as claimed by the developer. EPA’s ETV Program 

verifies performance data of commercial ready technologies in an 

effort to encourage use. 

The Superfund Innovative Technology Evaluation or SITE Program encouraged the development and application of innovative 

technologies to clean-up at superfund sites. SITE focuses on commercial ready technologies, and provides for field testing at actual 

contaminated sites. As reported in the SITE report to Congress for 

Fiscal Year 2001, estimated total cost savings of clean-ups from the 

program are $2.6 billion. 

Another program, National Environmental Technology Competition, this NETC program is designed to competitively seek the best 

commercially developed new technologies to cost effectively address 

certain high priority national environmental problems, and to support their broad application in solving problems. 

For example, using NETC and other resources EPA has supported 12 demonstrations of arsenic removal technologies for small 

drinking water systems. Another 16 to 20 demonstrations are 

planned. 

Yet another program, is the Science to Achieve Results Grants 

Program; Research under the Star program, supports only universities and nonprofit organizations, but research results are widely 

publicized and broadly available. Many small technology development companies are started by or employ former academics who 

patent technologies developed as part of their research. 

And finally, I will mention Cooperative Research and Development Agreements, these so-called CRADAs can serve many purposes, but usually they are intended to transfer intellectual property or to cooperate in final development or testing to make technology commercially available. 

In some cases these are technologies that EPA developed in its 

laboratories and are being licensed to a private company. In others, 

the private companies use EPA’s expertise or facilities to complete 

final testing or development of their technology. This opportunity 

is particularly attractive to small- and medium-sized businesses, 

which comprise the majority of EPA’s CRADA partners to date. 

I will spend the last minute talking about the SBIR Program in 

more detail. This particular program allows recipients (after a rigorous review of their proposals to ensure that the projects meet 

EPA’s needs and program priorities, are technically sound, and 

14

have environmental benefits and broad applications) to be funded 

in an early stage (the so-called proof of concept stage) and then 

perhaps continue through a second phase of funding if phase one 

results are promising. 

As an example of the SBIR approaches, we focused on significant 

portions of the program in pollution prevention and hazardous 

waste minimization. We are requesting green chemistry and engineering innovations as alternatives to high priority chemicals and 

environmental challenges ranging from inherently benign flame 

retardants to lead and mercury alternatives to green building design. Numerous of these technologies have been successfully commercialized and are making significant contributions. 

I have provided to the Committee a hard copy of materials that 

are available on our website that are basically a series of success 

stories, these SBIR programs and the good work that they are 

doing, and I can talk about several of those if the Committee would 

like. 

In my written testimony I have also described other examples of 

additional environmental technology activities or programs that 

benefit small businesses. These are available through our Environmental Technology Opportunities Portal, a one-stop shop that EPA 

designed to assist small businesses and others to find information 

that supports development and application. 

In conclusion, EPA believes that innovative technologies are central to achieving better, cheaper, and faster environmental protection, the role of small businesses is vital in developing and applying those technologies, creating new jobs, and enhancing U.S. competitiveness. EPA applauds the Green Gazelles and other companies who have demonstrated success in this area, and will continue 

to improve its program to enhance the potential of these companies 

to succeed. 

Thank you. 

[Mr. Farland’s statement may be found in the appendix.] 

Chairman SCHROCK. Thank you, Dr. Farland. I was gently reminded that I mispronounced your name. I hate it when people 

mispronounce my name, so I apologize for doing that to you. 

Dr. FARLAND. You can be sure it is not the first time. 

Chairman SCHROCK. I will bet, yet. 

For Mr. Lindell, Mr. Seydel and Mr. Catron, you know, our economy has clearly been through a difficult period, and it appears that 

we are entering a period of expansion. 

Is your business expanding, and what is your sense of the state 

of the economy based on the businesses you are in? Mr. Lindell? 

Mr. LINDELL. Our business is expanding. My worry is that—I put 

1,000 people out of work with jobs going overseas. I am trying to 

figure how to put 1,000 back. I do not think it is all that easy, 

largely because the way the internet is changing, the way values—

the value propositions that are basically penetrating the whole 

economy. 

I do not know what to do. We are trying to stay a smart business. We are trying to stay away from being a commodity, and we 

are trying to solve bitch problems with a matrix of products, the 

only way I know to stay above it. My son is looking for a job. 

Chairman SCHROCK. Okay, good point. Mr. Seydel. 

15

Mr. SEYDEL. I also own a few other companies, and one of them 

is in the textile and fashion chemical business, so we have——

Chairman SCHROCK. We know where you are going to go on that 

one. 

Mr. SEYDEL [CONTINUING] So you know because——

Chairman SCHROCK. Yes. 

Mr. SEYDEL [CONTINUING] But at the same time we are free traders, and we would have preferred to see this happen a little bit 

more gradually, I think. It is unfortunate that the export of jobs 

happened at exactly the same time as this recession. But I think 

it is fair to say that we are recovering. We have had to restructure 

that particular business. 

This one that we are talking about today though with EvCo will 

grow very significantly, has grown very significantly, and probably 

will continue to because there are just not too many people that 

have gotten into the trash heap and found out how valuable some 

of these materials are. 

Chairman SCHROCK. Sure. Mr. Catron. 

Mr. CATRON. I think we are actually addressing the problem 

where we do not need to go offshore, and you almost cannot go offshore. 

Chairman SCHROCK. Right. 

Mr. CATRON. We have a three-pronged approach because we grow 

by either selling new franchises, and as people get laid off or companies down size, we grow in that sector, so we reemploy and have 

them employ other people. Then we provide a service to the consumers, so when a new franchise starts, they are growing and providing services to the consumer that way, and just last year we 

started a retail line for do-it-yourself process. 

So depending on which segment we are addressing, we have 

grown and consistently grow anywhere from 18 to 22 percent a 

year. 

Chairman SCHROCK. Unless we ship everybody’s front yards 

overseas you are still going to be able to do business, are you not? 

Mr. CATRON. You know, we have a lot of inquiries from overseas——

Chairman SCHROCK. That is good. 

Mr. CATRON [CONTINUING]—that they want our stuff. 

Chairman SCHROCK. Good. 

Mr. CATRON. Which is nice. 

Chairman SCHROCK. Good, good, better than the other way 

around. 

Mr. CATRON. Yes. 

Chairman SCHROCK. For the three of you again, in addition to 

the recent income tax deductions, expensing for businesses rated 

from 25,000 to 100,000 dollars, what has that done for you? Obviously it has helped. In what way? Mr. Lindell? 

Mr. LINDELL. We are still in a break-even situation, so we are 

not taking advantage of any of the tax situations, nor do we pay 

taxes at this point. We keep pumping our money back into our 

business and breaking even. 

Chairman SCHROCK. Mr. Seydel. 

Mr. SEYDEL. Like I guess most Green Gazelles you will find that 

are in the—headed for an apogee, but not quite there yet. We do 

16

not—we are not making enough money to be able to profit from 

that. 

Chairman SCHROCK. Mr. Catron. 

Mr. CATRON. I feel like I am in this boat by myself. 

[Laughter.] 

Chairman SCHROCK. Congratulations. 

Mr. CATRON. It is a great thing. I would like to see them pump 

it up more. As S corporations or LLCs, it gives us a tremendous 

way to lower a tax liability where you are profitable but the cash 

is not there simply because of the generation of how it works. So 

by allowing us that deduction, believe me, it has helped a great 

deal in my business. 

Chairman SCHROCK. Great. Which of you has used any government assistance to start or expand your business? And if you have, 

what has been the result? 

Mr. LINDELL. I have not used any government assistance. 

Mr. SEYDEL. We have been helped tremendously by EPA. EPA 

has kind of helped us shepherd this program all the way from their 

waste wise incentive programs with awards, and with supervision 

through their regional offices. So we have counted on them significantly. And then within the administration, John Howard, who sort 

of bridges the White House to EPA, has been a very significant 

player for us, including giving us a lot of contacts within the industry that have helped us along. 

Chairman SCHROCK. Great. Mr. Catron. 

Mr. CATRON. I would echo that certainly the EPA has been very 

helpful in promoting what we are doing in one way, shape or form. 

We have actually written a chapter on integrated pest management 

for their textbook. 

The SBA has been helpful in that we are approved for SBA lending, small business lending. We do not have to go through a lot of 

red tape anymore for a new franchise to get that SBA lending, or 

loan I should say; and just individual state regulatory agencies can 

be very helpful. 

And I am not saying this because you are from Virginia, but Virginia was the first state that I am aware of that actually, they endorsed our programs for waterway protection, and gave us the permission, if you will, to produce and use a certificate from the Department of Natural Resources saying that this is a good thing, 

which is nice. 

Chairman SCHROCK. That is a huge issue at home, I can assure 

you. 

Mr. CATRON. Yes. 

Chairman SCHROCK. I have questions for Mr. Clevey and Dr. 

Farland, but I would like to yield to Ms. Velazquez. 

Ms. VELAZQUEZ. Thank you, Mr. Chairman. 

This question could be answered either by Mr. Clevey, Seydel, 

Catron or Lindell. You have been very polite not to bring this up 

today, but I ask you to consider these three facts. 

First, according to the Bureau of the Census survey small firms 

get about 11 percent of their R&D budgets from federal resources. 

Second, large firms get about 26 percent of their R&D budgets from 

federal sources. And third, small firms have consistently been 

17

found to be more innovative and more likely to take innovations to 

market than large firms or academics. 

Given these facts and given that the EPA’s SBIR program currently spent only the statutory minimum on small business research, would any of you care to make a suggestion about what the 

EPA should do to their allocation of SBIR of research dollars? 

Mr. SEYDEL. Small businesses are more efficient in the application of their funding. We get just as much done with half the 

money. That is what you said. 

Ms. VELAZQUEZ. Yes. 

Mr. CLEVEY. I work very closely with that program, and with the 

SBIR programs at the other agencies. I think there is a statutory 

question about what the limit is, and there is a whole series of 

questions about SBIR and how that money is used, the fact that 

there is no administrative money in that allocation, and a number 

of things. 

I think rather than trying to restructure the SBIR program, one 

of the things that I have recommended——

Ms. VELAZQUEZ. This is not about restructuring. 

Mr. CLEVEY [CONTINUING] I understand. Is lining up the programs, that a grant that is given to a university from EPA to work 

with new technology, there should be some way for that technology 

to roll into an SBIR to get it into the marketplace. And a lot of 

times using the SBIR is a way to leverage technology that has been 

funded someplace else. If those two things were connected, we 

would see a lot more productivity rather than funding a research 

at a university out of one hand and funding an SBIR out of another, and these two never connect. 

If we just aligned these programs, made it easier for small businesses to use SBIR to access technology that has already been developed by other funding, I think we would see productivity, and 

we would not have to do major restructuring. 

I am not sure I would say that the money being spent at the university to do basic research should be spent in SBIR. It is two different kinds of programs. But I do think that that grant should not 

be given to the university unless there is a clear path to use the 

successful results with an SBIR, and quite frankly, if it is not, that 

should be seen in the next review process as far as I am concerned. 

Ms. VELAZQUEZ. Thank you. 

Dr. Farland, I have heard your testimony and also we have been 

to your website. How much is your budget this year for SBIR? 

Dr. FARLAND. The SBIR budget generally fluctuates between $5 

million to $7 million. I can give you the figure for 2004. It is closer 

to $5 million in 2004. 

Ms. VELAZQUEZ. I am sorry, it is close to? 

Dr. FARLAND. $5 million in 2004. 

Ms. VELAZQUEZ. Five million. 

Okay, your report on the long list of successes in the SBIR program are very impressive. Would you say that the SBIR program 

has helped EPA and the country to develop green technologies to 

solve environmental problems? 

Dr. FARLAND. Yes, absolutely, Ms. Velazquez. We are very proud 

of the work that has been done and the focus of the SBIR program 

in green technologies, particularly green chemistry, alternatives to 

18

hazardous solvents, and the opportunities that we have had to feed 

some of this research work directly into our sustainable development type programs within our pesticides and toxics program. 

Ms. VELAZQUEZ. We heard from the witnesses that innovative 

small businesses need money for research to solve environmental 

problems. Your research budget is of 2.5 percent——

Dr. FARLAND. Yes. 

Ms. VELAZQUEZ [CONTINUING] Is the minimum, it is a floor. It is 

the legal minimum you can spend. So if you heard that they need 

more resources, can we count on you to double the funds allocated 

for the program in the year 2005? 

Mr. CATRON. I am going to write your answer down here. 

[Laughter.] 

Mr. CATRON. Or maybe not. 

[Laughter.] 

Dr. FARLAND. Congresswoman, I think you know that the EPA’s 

research budget covers a lot of different issues, and it is something 

that we need to make very tough decisions about. Every year we 

look carefully at how we expend those resources, and we make the 

best of the budget that we get. 

I cannot suggest to you today that we will double that budget. 

I can tell you that EPA supports small businesses to the tune of 

$1.2 billion. 

Ms. VELAZQUEZ. So we are talking about this particular——

Dr. FARLAND. This research activity, I understand. 

Ms. VELAZQUEZ [CONTINUING] SBIR. 

Dr. FARLAND. Yes. 

Ms. VELAZQUEZ. And we talk about, you know, at a time when 

the economy needs to create jobs, and listening to the success of 

these type of industry in the small business sector, and they are 

saying that they need more money, so. 

Dr. FARLAND. I understand. I will take that back———. 

Ms. VELAZQUEZ. You will be———. 

Chairman SCHROCK. Mr. Clevey is still waiting to write down, 

right? 

Mr. CATRON. Right. 

Ms. VELAZQUEZ. Dr. Farland, your Environmental Technology 

Verification Program sounds like a wonderful idea. It should really 

help market this new technology. Of course, only about 70 percent 

of the cost is covered. I know that the SBIR research award recipients get some help in paying for the verification. 

Do you find that a lot of older, small businesses with good idea 

cannot afford it? 

Dr. FARLAND. I think that that is difficult, but we have through 

the SBIR program looked carefully at the technologies that move 

into phase two, for instance. And for the others here, phase one 

projects get about $70,000 in terms of development costs. If they 

are producing a technology that looks very promising, they may 

move into phase two. There is an opportunity for some $225,000. 

There is also some incentive, if they have a private funder, to be 

able to get some additional monies from the EPA to match funding 

coming from a private vendor. And so we think those are good opportunities for us to provide. 

19

Ms. VELAZQUEZ. Thank you, and I hope that you go back and revisit your budget. 

Chairman SCHROCK. Thank you, Ms. Velazquez. 

Ms. Kelly. 

Ms. KELLY. Thank you, Mr. Chairman. 

We have got a real problem here because the innovation to create 

a green company, these Green Gazelles is there. The problem clearly was pointed out by our ranking member. There is not enough 

money. We have an example sitting right here at the table. Two 

out of the three people are very, very marginal sitting at this table. 

I am turning to you, Dr. Farland, because as our ranking member, Ms. Velazquez said, how can we help you get more money to 

these people? 

In my own district we have had two plastics manufacturers that 

have been in business, they have struggled along for close to 15 

years making pseudo-lumber out of totally unusable plastic. They 

are recycling plastics that otherwise would build up in landfills, 

and for which there would be no use. Both of these, the OBIX Corporation in Stanford, Connecticut is one. There is another one up 

in Duchess County that I represent. Both of these have had to go 

out of business because they cannot get the funding that they need. 

Their products are bought. OBIX and the other one are both selling to places like Home Depot and Wal-Mart. It is not that they 

do not have an end user for those products. It is that they cannot 

get the financing. 

Now, the SBA can do some things, but do you have a website, 

for instance, where they people can log on to give them places 

where they can go to get the money? 

I am going to ask you a second question. Is there something that 

we can do legislatively? Everybody that comes to us wants money, 

but legislatively is there a way that we can reconstruct what we 

are doing so that it makes sense to help these people get these 

wonderful ideas, which we truly need, out into general use and get 

them up and moving? 

And if anybody else want to answer these questions after Dr. 

Farland, please feel free. 

Dr. FARLAND. Congresswoman Kelly, I think—well, both of those 

questions are very good ones. We have recognized that the barriers 

that you see to the funding of some of these programs come from 

the lack of venture capital that is available for many of these folks 

simply because of the small profit margin, and the lack of confidence that they can actually produce what they say they can 

produce. They do not have a large track record and so on, and the 

lack of information as to what is out there and what is available. 

We have tried to deal with the latter two of those, particularly 

looking at the issue of the website. We were asked by Congress to 

develop a one-stop shop so to speak, and we did that this year, and 

that is the ETOP website that I mentioned, and the website is listed in my testimony. 

In addition to that, in terms of what we could do legislatively, 

I mean, certainly the one thing that we understand the SBIR program is based on the total funding for federal research, and federal 

research has the ability to support technology development, and 

20

that technology development actually stimulates these types of activities. 

And so I can only suggest at this point that one thing that always helps us is supporting the importance of the federal research 

that develops these types of technologies. 

Ms. KELLY. Even if I put a link for the folks in my district who 

are these nascent corporations that are green corporations that 

truly need your support, and I put that on my website, would that 

help them find what they need? 

Dr. FARLAND. Oh, I think it would. Yes, absolutely. I mean, our 

sense is this—this ETOP website, this web portal that connects 

them to quite a number of different programs has the ability to 

provide them with a resource to go to if they have questions, that 

links them directly to the SBIR solicitations, those types of things 

are all very important sources of information for these businesses 

that are trying to get into the market. 

Ms. KELLY. Mr. Clevey, feel free anyone to jump in here. We 

have a problem, we have to try to help you figure out how we can 

solve this problem. 

Mr. CLEVEY. Let me just say on the SBIR program that environmental topics and funding topics show up in multiple agencies, not 

just EPA. And the National Science Foundation, for example, under 

the agile manufacturing topic area has a whole group of topics 

dedicated to environmentally conscious manufacturing. 

So I think part of the issue is looking at how environmental technologies are showing up across the research budget in the United 

States. And EPA clearly has a role in that, but EPA doesn’t fund 

renewable energy technologies. EPA is not funding environmentally-conscious manufacturing, and these kind of things show 

up in others. 

So one thing I think that you could do legislatively is similar to 

what has been done in the early phases of homeland security and 

the model that was done with the partnership for next generation 

vehicle, and that is simply ask the agencies to identify all of the 

environmental things that they fund, and group those together 

someplace, and whether it is EPA who coordinates it or not, the 

fact is that environmental technologies are funded all over the federal government. 

The transportation budget is funding air quality clean up. It does 

not know it, but I do as a local person who is working with our 

Department of Natural Resources to drag that money out of our 

local Michigan transportation to fund technologies of Green Gazelles to bring a new technology into our state that allows truckers 

to shut off their engines so that they can sleep for 13 hours without 

having to run their diesel trucks. 

The funding for that is in the transportation budget. It is not—

I wish it was in DNR’s budget or others, but you know, there are 

pathfinders like myself who figure out how to work with these companies. I can give you a whole long list of ways that you could 

make it easier for us to do our job, but the bottom line is you are 

doing quite a lot now if we just simply aligned those things, and 

I think EPA would be a logical place. 

21

If they look inside the National Science Foundation and see 

projects that relate to the environment, they can simply earmark 

those, and they should be encouraged to do so. 

The partnership for next generation vehicle worked quite well 

that way, and I know, as again in the early phases of homeland 

security President Bush asked all the agencies just go through your 

programs, identify anything that relates to homeland security, and 

you know, list it and broadcast it out, and then they started—that 

actually served as the foundation for many of the things that have 

come now. 

I think that there is quite a lot going on. I would encourage you 

to do that as a beginning. Let us find out where the holes are, and 

then ask how can we fill the holes. 

Ms. KELLY. Mr. Farland. I am sorry. 

Mr. LINDELL. I am sorry, no. 

Ms. KELLY. Go ahead. 

Mr. LINDELL. May I offer a thought because I do not need your 

money? 

Chairman SCHROCK. Why are you here? 

[Laughter.] 

Mr. LINDELL. I would like to———. 

Chairman SCHROCK. It is refreshing. 

Ms. KELLY. Everybody who comes wants our money. 

Mr. LINDELL. I would like to pick up on Mike Leavitt’s theme, 

which is, this is a new sociology enabled by technology. We have 

been spending all of our time talking about technology being the 

innovative piece. What I try to do, and not very well I must admit, 

is to suggest that the innovation can be conceptual as well as technological, and there is altogether too much focus on technology as 

being the solution when quite simply you can reconceptualize what 

you are doing, and I will give you an example in a second, and be 

quite dramatic. 

And I will tell you it is in my text, and there is a county outside 

of Atlanta that decided that it was not going to get conventional 

sewer, and so it decided that—but it was going to have to double 

the size of its property because they were going to have to put septic systems in all over the place. That was going to cut property 

values in half for developers, so they needed a solution. 

Their solution is distributed sewer, and here is what happens. 

The developer goes in and builds the infrastructure for the community and gives it to the community. The infrastructure is done with 

technology that is considerably less expensive to buy and operate 

than conventional sewer. In that county conventional sewer runs 

somewhere in the towns that have it, the fees are somewhere between 450 and 600 dollars a year. In the new formula the fees 

could be as low as $80 a year per home. 

So there is tremendous amount of money in the marketplace if 

it is reconceptualized, and that is where we have difficulty getting 

the message across. 

Ms. KELLY. Dr. Farland, you had one———. 

Dr. FARLAND. Just a brief follow up, Congressman Kelly. 

On our website you can actually find a listing of environmentally 

relevant SBIR programs that are funded by other agencies. This 

was the type of comment that we were making in terms of sharing 

22

of information. Those programs are out there by year. Again, we 

can use lots of help in terms of making sure that we identify all 

of them, but the vast majority of them are found. If you look for 

1993, you will see funding from the Department of Defense and the 

National Science Foundation and others that are relevant to environmental problems. 

Ms. KELLY. But Mr. Clevey did not seem to feel that it was a 

complete enough list; is that what you were saying? 

Mr. CLEVEY. I think it is a good start, and in part, if we—one 

is looking backwards, the other one is looking forward. And I think 

as we start deciding what the agency missions are, what kinds of 

things we are going to be focusing on. I mean, the question I think 

needs to be asked of the National Science Foundation, how does 

your environmentally-conscious manufacturing program support 

the manufacturing goals at EPA? That is what I think needs to get 

done. Let us go forward and let us put somebody in charge of stimulating Green Gazelles, and asking question. You know, do the programs that we have now, do they—you know, do they get in the 

way of Green Gazelles? Do they give priority to Green Gazelles? 

I mean, the bottom line is is if we are going to recharge this 

economy Gazelles are going to have to do it. If we want Gazelles 

to take on the job of environmental issues, then we are going to 

need to encourage them to do that. In many cases it is just opening 

doors, removing the logs from the road. 

I mean, these are entrepreneurs. They will find ways to do it. We 

can make it easier for them, or we can make it harder for them. 

Ms. KELLY. Thank you, Mr. Chairman. 

Chairman SCHROCK. Thank you, Ms. Kelly. 

Judge Majette. 

Ms. MAJETTE. Yes, thank you. 

Well, again, let me thank and congratulate Mr. Seydel for truly 

proving here in the twenty-first century that old saying that one 

man’s trash is another man’s treasure. 

Mr. SEYDEL. Thank you. 

Ms. MAJETTE. But I know that many people argue that the recycling of plastics has not taken off because there is really no economy of scale that has been created in order to make it economically 

or financially viable. 

Manufacturers say that they cannot get a stream of high-quality 

material at a reasonable price, and recycling companies say that 

they cannot guarantee such a stream until sales grow robust 

enough to drive down the cost. 

Now, have you found that this to be an obstacle in the development of EvCo Research? And on a broader scale, do you see that 

there is or we can create a market for recycling plastics and improving that ability to recycle in the coming years? And I would 

suppose that you would agree with me that that would be very important given the statistics of the high percentage of unreclaimed 

plastic waste. So if you could address those questions. 

Mr. SEYDEL. Thanks a lot. We are not using it all up yet, but we 

will, and I think there is going to be a problem because the collection rate is very low. I know that Senator Jeffords has proposed a 

national deposit law that would presumably bring more of the bottles back, because we have 10 deposit states now where we collect 

23

about 85 percent of the bottles that are recollected. And in our own 

state, Georgia, we collect less than 10 percent of the bottles packed 

because we do not have an incentive to collect. 

I think we will need to have an incentive to collect. There is a 

lot of resistance by the people who have to do the accounting and 

the collecting and the returning of these bottles to use. It is an expensive process, but I think we will get there. 

There have been several studies recently, one by an organization 

called Global Green, and by businessmen, and the Environmentalists for Recycling who have shown that the California plan for recapturing plastics works quite effectively. 

Now, on the use side, as we grow we could easily consume all of 

the plastics that are presently going into the waste stream because 

there are just so many uses for these materials when they are economically collected and put back onstream. 

Thank you very much. It is a good question. 

Ms. MAJETTE. Thank you. And for Mr. Lindell, what is that county in Georgia that you just talked about? 

Mr. LINDELL. Carroll County. 

Ms. MAJETTE. Carroll County. Okay, thank you. 

Mr. LINDELL. They are one of eight or nine counties now that are 

zoning for distributive infrastructure. 

Ms. MAJETTE. Thank you. 

And I do not mean to beat up on Dr. Farland, but what do you 

think is the best way in which the EPA can provide more support 

and more resources for these types of businesses and other businesses like them? 

What is the number one thing that you think EPA can do or that 

we can do as members of Congress to help these businesses continue to grow and thrive? 

Dr. FARLAND. Again, Congresswoman, I think we have really 

made an effort to pull together quite a number of programs in research and development as well as across the agency. You heard 

about Energy Star and a number of those types of programs who 

really are focused on these issues, these environmental problems 

that are looking for solutions. And I think the encouragement of 

the Green Gazelles that you are hearing today is something that 

is going to be extremely important. 

Getting the matches made between the problems, the agencies’ 

priority programs, and these individuals, I think is something that 

will be one of the biggest things that you could help us to do. 

Our entire program is focused on starting at the beginning where 

someone has an idea, and funding it all the way through to the 

point where we are assisting in commercialization, and I think we 

will continue to do that broad spectrum of work. 

Ms. MAJETTE. Well, is it a matter, though, of connecting the dots 

and getting the information that already exists to people, or getting 

the resources that already exists directed to where they can be 

most effectively needed? 

I mean, because it sounds like everybody kind of knows what the 

problem is, but we have not really put all the different pieces of 

the solution, the big solution together, and I guess I more specifically, what is it that we really can do other than say, well, we 

should pull all these things together? 

24

I mean, what—as a practical matter, what is it that we can do 

short term and maybe long term, but certainly short term so that 

Mr. Seydel and Mr. Lindell would be able to take advantage of the 

tax breaks that currently exist, and we can also bring in other 

Green Gazelles and other potential Green Gazelles to do the kind 

of things that need to be done, and thereby reduce, perhaps, the 

amount of money that is being spent in other ways? 

Dr. FARLAND. Again, the majority of this work is funded by the 

private sector, but we have the ability to help that, again through 

the sharing of information, through the development work that we 

do, and through the partnerships that we have with these Green 

Gazelles, and I think that is something that we are strongly committed to, and will continue to develop. 

Since the SBIR program started, we have funded $88 million in 

terms of these small business incentive-type programs, and close to 

1,000 contracts that have put this type of technology out there. 

Again, just getting the first stage of technology development 

going encourages the private sector to then take up the technology 

and fund it; so we have got to continue to try to do that. 

There is always a concern about the federal government essentially funding the private sector, and that is something that we are 

challenged on frequently in terms of our program. We think we are 

doing the right thing. 

Ms. MAJETTE. I see my time is up. Thank you. 

Chairman SCHROCK. Before I go to Mr. Ballance, let me follow 

up on one thing the Judge said and Ms. Velazquez said. 

You gave her a figure of $5 million a little bit ago. Was that for 

the Green Gazelle project? 

Dr. FARLAND. That was for the SBIR program. 

Chairman SCHROCK. SBIR program. 

Dr. FARLAND. In 2004. 

Chairman SCHROCK. What percentage of the EPA budget is that? 

Dr. FARLAND. Well, I will not do the math right here. 

Chairman SCHROCK. It is probably so infinitesimal. 

Dr. FARLAND. The EPA overall budget is about $7 billion. 

Chairman SCHROCK. Okay. All right. That is my point. I mean, 

it seems to me to double that would not make an—I think that is 

what you were getting to as well. You know, we need to put more 

money in to make sure these guys stay alive and we would bring 

a lot more of then on board. Is that what you’re indicating? 

Ms. MAJETTE. Yes. 

Chairman SCHROCK. Yes, that is right. And I think that is where 

she was going with that, and I agree with that. I mean, if it is infinitesimal, where does the rest of the budget go, because I can 

think of no better use of money for EPA than to help these three 

men and thousands and thousands of others that we would like to 

create just like that. That was my point. 

Ms. MAJETTE. And the issue of how do we get the information 

out to people. 

Chairman SCHROCK. Exactly. Yes. 

Ms. MAJETTE. I mean, putting it on a website is fine, and certainly my office would love to have a link or be able to have a link 

so that people who come to our website can access that information. But everybody does not get their information the same way, 

25

and I guess what I am suggesting is we have to be more—I believe 

it is imperative for us to be more proactive in utilizing other ways 

of getting that information out there. 

And to the extent that we can partner with you, and perhaps 

even private industry partnering with you to do that, I think that 

will enure to all of our benefit. 

Chairman SCHROCK. And why should businesses have to go to 

their congressperson’s website. I think the government agency involved should be so high tech and so responsive that anybody could 

go in there and plug in. I think that is what we are getting at too. 

The gentleman from North Carolina, Mr. Ballance. 

Mr. BALLANCE. Just briefly, I noticed the gentleman in large 

metropolitan—I am from a rural area, North Carolina. Are the 

same opportunities available in rural areas where you do not have 

the same kind of concentration of these recyclables? And what 

about competition, do you have competition in these areas? 

Mr. LINDELL. We have competition. Essentially these technologies work for single-family homes up to several million gallons 

a day. They are ideal for small rural communities. We have actually done them. They are ideal for self-help programs, and it is just 

a question of—and I would like to talk to you about whatever the 

county is, because we are actually trying to do precisely that is 

Louden County in Georgia right now. 

Mr. BALLANCE. Right. Mr. Seydel, what about foreign competition? 

Mr. SEYDEL. I think we are going to give the foreigners some 

good competition. You know, we have this technology that we are 

developing, it is patented in 70 different patent conference around 

the world, so I think we are pretty well set to go. 

And we have a plant, by the way, in Greensboro, North Carolina 

where we are recycling vegetable oils from McDonald’s friers, and 

turning them into paraffin wax replacements that are both biodegradable and of course less expensive. So we appreciate North 

Carolina very much. 

Mr. BALLANCE. All right. Mr. Chairman, that is all the questions 

I have. 

Chairman SCHROCK. Thank you, Mr. Ballance. 

Mr. Clevey, you said your testimony that we will not transition 

to an environmentally sound economy without businesses like these 

leading the way, and I agree. What makes you so sure that the private sector will lead the way? I hope they do, but what proof do 

you have that that is the case? 

Mr. CLEVEY. Environmental technologies, for the most part, can 

be an often should be looked at as a productivity improvement, and 

green technologies often outperform existing technologies that are 

based on an oil. We are making plastics in Michigan, biodegradable 

packing materials made out of corn and rice hulls in Michigan 

based on a technology based at Michigan State University. Most 

styrofoam is made out of oil. 

So if we start looking at, you know, taking the green products 

that we have, just recycle material or materials that have environmental performance, oftentimes they are more expensive simply because they are early stage products. But in the larger scheme of 

things they cost less to produce, they cost less to process, and if we 

26

truly got to a recycled economy our materials cost would drop almost to zero. 

So the opportunity here we see is Gazelles are mining a market 

niche, and they are able to produce products that outperform their 

competitors and oftentimes cost less than their performance. 

There are some metrics that you—anyone who is in the business 

of innovation looks at, and certain metrics on the kinds of companies that do well, but essentially we just take two. 

What percent of annual sales is based on products introduced 

within the previous three years? It tells you a lot about the level 

of technology and innovation and competition within a given industry. 

The other one is, how much—what percent of your annual sales 

is invested in new product development? And that tells you a lot. 

In the United States our old industrials, about five percent of the 

annual sales is invested in new product development, which means 

that those companies are often prime candidates for offshoring and 

low wage rates because they cannot—their products oftentimes 

cannot compete based on performance. 

Green products and government, these are companies that are 

spending, as you can see, a tremendous amount of time in making 

products that will simply outperform. A lot of the barriers they face 

are artificial barriers that are simply blocking the growth of their 

industries, and all three of them can give you those kinds of stories. 

They overcome those because they are good business people, and 

the fact that their products are less expensive, outperform their 

competitors, and do not destroy the environment, which is a tax on 

our economy, and quite frankly, a tax on their customers, is a competitive advantage. 

Chairman SCHROCK. Are federal regulations and is federal bureaucracy getting in the way to the point where some business just 

say the heck with it, I could create these things, but when I have 

to deal with the federal government it is just not worth the effort? 

Or is it just people are not inclined to go into that sort of thing? 

Mr. CLEVEY. I think it is a combination of things. First of all, the 

private sector, if you are a large corporation and you can get an 

R&D tax credit, yes, you may be investing tax credits, but small 

companies do not get that. Venture capitalists and banks do not 

fund new technology development. So oftentimes these companies 

are forced to, go without, or in the cases where they have a program like ours, and we can basically write these grants for them, 

and help them get this funding for them, it makes it easier. 

I do not think that there is a company in the environmental area 

that is not very comfortable with working with government at the 

local, state, or federal level. 

Chairman SCHROCK. Say that again. 

Mr. CLEVEY. I do not think there is a company in the United 

States that has an environmental product that is not very comfortable in dealing with the government——

Chairman SCHROCK. Okay. 

Mr. CLEVEY [CONTINUING] Because this is just a course of doing 

business at all kinds of levels. I think one of the concerns I hear 

is that there is no consistency or purpose between the environVerDate 0ct 09 2002 18:08 Oct 01, 2004 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 G:\HEARINGS\94111.TXT MIKEA
27

mental regulations at the local, state and federal level. There is a 

lot of conflicting things. 

There are rules on the books that do not get implemented. Phil 

was telling me about one of his competitors who has a contract 

here to do lawn care service that as far as he is concerned does not 

meet the regulatory guidelines of the federal government, and you 

know, wonders how that company can continue to sell their product 

and get the contract to take care of the lawn service right here in 

Washington. 

So there are barriers. There is all kinds of things that the government can and cannot do to support these companies. I mean, 

the good news is are they are going to do this whether you help 

them or not, or whether you are in the way or not. From a public 

policy point of view, because we get an economic benefit and environmental benefit by stimulating the growth of these kinds of companies, we really should be asking a lot of questions about how we 

can do this. 

An investment tax credit, if I am an investor and I invest in a 

Green Gazelles, I should get an investment tax credit for investing 

in the company. If I am a socially responsible investment fund that 

puts—invests in a mutual fund that invests in these kinds of companies even though their returns are four percent higher than 

Standard & Poor’s, they are not getting any kind of special consideration for investing in these kinds of companies. 

If I am a large company, a large durable goods manufacturer, 

and I buy a license to enter into a joint venture with a small company, green business, do I get some special benefit for doing that? 

If I file a patent, if I am a green company and I file patents, can 

I write those patents off as a cost of doing business? 

The SBIR program, for example, does not fund patents. That is 

not an allowable expense under an SBIR program. Well, if you are 

asking a high technology company to invest a couple of million dollars of federal research into a new technology, and you are not willing to help cover the patent costs, and you expect them to go out 

and get venture capital, well, I do not know any venture capitalists 

that would invest in a company where the technology is not protected. 

So by simply saying, yes, you have to spend $70,000 on patents 

for the $100,000 research grant you got, there is some logic disconnects here. Yes, there are barriers. 

To answer your question, do Green Gazelles not do these programs because they are too hard to do? No, it simply slows down 

how fast they can provide a return on investment back to you, and 

that return on investment is jobs, tax dollars, and economic development. 

Chairman SCHROCK. I was sitting here while you were talking 

and asking why some of these things do not exist to help those, and 

the answer I got was because there is nothing in place to do that. 

Nobody does that. Maybe we have reached a point we need to start 

creating a situation where that does exist to incentivize people to 

do that. 

Mr. CLEVEY. I think just asking the question again, what do we 

have in place that these Green Gazelles can use, and are they connected well. I think EPA has done an outstanding job. But to say 

28

the environment is EPA’s job is, I think, the wrong way of looking 

at this. 

The Department of Energy is—the amount of money that they 

spend on renewable energy versus some of the other things that 

they fund, that would be worth looking at. 

Chairman SCHROCK. Yes. 

Mr. CLEVEY. I think the National Science Foundation does an 

outstanding job in funding environmentally-conscious manufacturing technologies, and the grants that they go and give to companies are directly related at keeping those companies more competitive so that they are not forced to make the choice of do I have to 

move. 

In Grand Rapids, we have a company that manufacturers refrigerators moved to Mexico because their wage rates were so much 

lower. We could have reduced all of their taxes and taken away 

every single one of their permits, and they still would have moved 

to Mexico. 

Chairman SCHROCK. I know. I know. I know. I do not know how 

to solve that one. 

Mr. CLEVEY. Their products make them more competitive. That 

is how you solve it, research and development. 

Chairman SCHROCK. Mr. Seydel. 

Mr. SEYDEL. Let me just add one brief comment. I think everyone 

here can see, Congressman, from Mr. Clevey’s comments, and the 

people that he represents, and then behind me is Byron Kannard, 

who is the Washington version of Mr. Clevey, these people are the 

connectors for us because we really are so busy in our laboratories 

and in our development cycle it is very difficult for us to be able 

to look into these sort of things. 

I think the federal government could go a long way by encouraging these people who are the reason why we are here today, and 

the reason why we get so well connected with government agencies. 

They are the nonprofit organizations that are the interface, and 

frankly, you know, I think a lot of the major industries have their 

own associations and lobbyist groups that are here in Washington, 

but Green Gazelles, entrepreneurial people do not have funds for 

that. 

So I think you could do yourself a really good favor as far as 

connectivity is concerned by fueling these guys so that they could 

go out into the United States and drag these people in. Maybe they 

could say you do not pay any dues right now, and then later on if 

you get successful we would like for you to do some payback, sort 

of like we do with loans to kids going through college, you know. 

Just some kind of advance to sort of help them help you make the 

connection so these people can move a lot faster, because listening 

to some of the things that EPA is offering today I can tell I am over 

there all the time. 

I won their waste wise award for five years, but I did not know 

that some of those programs were going on until I heard these two 

guys talking about it. And if Green Gazelles had not brought me 

here today, I would not have heard it. 

Chairman SCHROCK. Dr. Farland, why does Mr. Seydel not know 

that? 

29

Dr. FARLAND. Well, again, this is one of the barriers I think that 

we have identified; that we need to get that information out. 

Chairman SCHROCK. Why are the barriers there and how do we 

break it down? 

Dr. FARLAND. Well, we are looking at breaking it down by providing those kinds of links through the website, by working with 

Mr. Clevey, with Mr. Kannard and so on to really try to make sure 

that people are aware of all of these programs that we are carrying 

out. 

So this hearing today is a good start. 

Chairman SCHROCK. Right. 

Dr. FARLAND. And we will see if we can get people aware of this 

web portal. 

Chairman SCHROCK. Great. Mr. Lindell. 

Mr. LINDELL. Yes, thank you. 

Your comment that we maybe need to create something takes me 

right back to Tracy Meehan’s comments that the complexity of the 

issues we face right now is so high that we need a change in paradigm. I would suggest that that language is the same. 

Chairman SCHROCK. It is the same. I am sure of that. 

Mr. LINDELL. And that EPA ought to be engaged on that basis. 

Chairman SCHROCK. Yes, the last thing I wanted to do when I 

came here was create anything, because what it does is just cause 

grief to the business world and the people we represent, but what 

we need to create is a system where we can tear down some of 

these barriers to make it easier for you all to do business. That was 

my point, and I agree with that. 

Mr. LINDELL. Very true. 

Chairman SCHROCK. Dr. Farland, in your testimony you said 

that Governor Mike Leavitt believes technology will help us move 

to a better way of achieving environmental protection. Can you give 

us some examples of technology improvements that have led to improvements in our environment? 

Dr. FARLAND. Sure. I had three examples in my written testimony that the Committee can take a look at, but let me mention 

one of those, and then two others. 

One of them is a company called Niton, and it is one of those 

that we highlighted in our success stories for SBIR. They developed 

a detector for lead and lead paints. I think you understand that 

lead is a very serious environmental problem because of the use of 

lead paint, because of past history of smelters and so on. This particular technology coming out of small businesses now used industry-wide because it significantly has the ability to reduce the costs 

associated with analyzing for lead in soil, so that’s clearly an example where there has been a significant advance. 

We developed some research within our own laboratory in Cincinnati that dealt with the problem of the indoor environment, and 

that’s molds. The ability to actually identify hazardous molds 

through using advanced technology, genomic technology, has now 

been picked up in five different patents, and is being marketed, 

commercialized by a number of companies through CRADAs, the 

type of thing that I described. 

The third example that I would give you would be one related 

to air pollution, and the fact that there are a number of extremely 

30

good retrofit technologies for diesel that are substantially improving the quality of the air and the emissions from diesels, taking 

care of particulate matter and sulfur and nitrogen oxides that are 

problematic. 

Those are all examples of the kinds of technologies that we have 

stimulated and have been applied to very difficult environmental 

problems, and there are many more. 

Again, I hope people will take an opportunity to look at these 

small business success stories. There are about 18 of them on the 

website. 

Chairman SCHROCK. Do you feel that we have the right incentives in place, right incentive programs in place to encourage more 

businesses similar to the businesses you have heard talked about 

here today? 

Dr. FARLAND. I do. Mr. Schrock, I think you have heard that 

there are significant barriers out there, and we think that we have 

addressed quite a number of those with the six or so programs that 

I have talked about, and we are doing more. 

I have mentioned in my written testimony some of the future 

work that we will be doing with regard to the National Environmental Technology Council where our regional people will come in 

and talk about the problems that they are faced with, and we will 

try to make some matches with some of the companies, people who 

can begin to apply technologies to solve those problems. 

We have a group of external experts at EPA that will come in 

and give us an opportunity to get their best ideas and what types 

of things will work. 

Chairman SCHROCK. There are a lot of grant programs out there 

to help folks like the men we have here today. Would there be a 

need for consolidation of some of those programs so people would 

only have to go to a limited number of places, or should each one 

of those be run independently, which, frankly, makes it more difficult for businesses to tap into I would think? 

Dr. FARLAND. Right. I guess, just to be clear, Mr. Chairman, EPA 

has just one grants program and that is the Star grants program 

that I talked about. SBIR is primarily contracts, but in effect, these 

are all used to support the types of programs we are talking about. 

The various grants and contracts activities that I have described 

and the CRADAs that I have described all target different audiences, and different types of technologies, some at the very beginning of the process, some later on in the process, and so on. 

So I think all of those programs need to come into play as we 

address some of these problems. 

Chairman SCHROCK. Doctor, I have one unrelated question before 

we are finished here. Your office is working on a metals framework 

assessment. 

Dr. FARLAND. Yes. 

Chairman SCHROCK. And I know this assessment has faced several delays. Can you give me any kind of a new or final time line 

when this will be completed? 

Dr. FARLAND. Yes, Mr. Chairman. We have been working on this 

issue for awhile as you know, and again, this is of great interest 

to the small businesses who deal with many of the metals——

Chairman SCHROCK. Right. 

31

Dr. FARLAND [CONTINUING] And metal products that we are talking about. That framework is in very good shape. We are making 

the final changes this month. It will go to our science policy council 

early in June. It will be released for a peer involvement, an expert 

involvement workshop which is scheduled for the beginning of July, 

and then it will be reviewed by our science advisory board in the 

September time frame, so we should have that framework completed, reviewed, internally and externally, and in final form by the 

end of the year. 

Chairman SCHROCK. Great, thanks. 

Your presence here today and your testimony and answering the 

questions has been very helpful. I did not choose to have this hearing just to pass the time of day to bring you all from where you 

live. We did it because of serious stuff, and the three of you who 

do the business end of it are doing some magnificent things, and 

we need to increase your numbers, many, many fold. And if there 

is a way we in Congress can help the government part of this make 

it easier for you to create more—expand your business and create 

more business, that is what we want to do, and you have given us 

a lot of food for thought here, and believe me, I am appreciative 

of everything you do and what you said here. 

Before we finish, do you all have any final comments you would 

like to make? Mr. Lindell. 

Mr. LINDELL. I have on page 2 of my formal text seven recommendations that you might want to consider. 

Chairman SCHROCK. All right. Maybe I will look at them afterwards. On page 2, let me look here a minute. 

Okay, I only see five, but we will go through them. Great, thank 

you. 

Any others? Mr. Clevey. 

Mr. CLEVEY. I just wanted—the point you made about consolidation, I do think that there has been examples in SBIR across agencies where there has been some sharing and cooperation and 

things. 

I think it would be worth at least a pilot project to ask the question, what are the—you know, the number one environmental priorities that we have to deal with, and to ask all the SBIR agencies, 

are you planning on funding anything in this area; and if so, simply earmark it, put a star next it, et cetera, and if a proposal comes 

in from anywhere in the United States to any agency for that topic 

area——

Chairman SCHROCK. Sure. 

Mr. CLEVEY [CONTINUING] Somehow it gets—there is an interagency group that looks and those and makes some decisions about 

perhaps fast-tracking them, consolidating money. 

One of the problems, I think, I see with the SBIR program is it 

is spread. There is not a lot of money in any one place except U.S. 

Department of Defense. It is spread very thin, and there is a lot 

of redundancy going on in the program. And if we are going to 

trust EPA to set the environmental targets and tone for the nation, 

then the rest of the government should get behind it, and that 

would help a lot. 

Nobody funds research and development for these companies. 

This SBIR program is the beginning. All the other programs that 

32

EPA has that help to facilitate the commercialization assume that 

the research has been done, and the SBIR is about the only source 

that a small company can go to get that done. It is a very, very 

critical part of this. 

Chairman SCHROCK. Right, thank you. 

Well, again, thank you all for your testimony, your appearance 

here today. We certainly appreciate it. 

This hearing is adjourned. 

[Whereupon, at 12:07 p.m., the Subcommittee was adjourned.]

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Æ