[House Hearing, 116 Congress] [From the U.S. Government Publishing Office] MEMBER DAY HEARING: COMMITTEE ON SMALL BUSINESS ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED SIXTEENTH CONGRESS FIRST SESSION __________ HEARING HELD MAY 15, 2019 __________ [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 116-020 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 36-317 WASHINGTON : 2019 -------------------------------------------------------------------------------------- For sale by the Superintendent of Documents, U.S. Government Publishing Office, http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). E-mail, [email protected]. HOUSE COMMITTEE ON SMALL BUSINESS NYDIA VELAZQUEZ, New York, Chairwoman ABBY FINKENAUER, Iowa JARED GOLDEN, Maine ANDY KIM, New Jersey JASON CROW, Colorado SHARICE DAVIDS, Kansas JUDY CHU, California MARC VEASEY, Texas DWIGHT EVANS, Pennsylvania BRAD SCHNEIDER, Illinois ADRIANO ESPAILLAT, New York ANTONIO DELGADO, New York CHRISSY HOULAHAN, Pennsylvania ANGIE CRAIG, Minnesota STEVE CHABOT, Ohio, Ranking Member AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member TRENT KELLY, Mississippi TROY BALDERSON, Ohio KEVIN HERN, Oklahoma JIM HAGEDORN, Minnesota PETE STAUBER, Minnesota TIM BURCHETT, Tennessee ROSS SPANO, Florida JOHN JOYCE, Pennsylvania Adam Minehardt, Majority Staff Director Melissa Jung, Majority Deputy Staff Director and Chief Counsel Kevin Fitzpatrick, Staff Director C O N T E N T S OPENING STATEMENTS Page Hon. Nydia Velazquez............................................. 1 Hon. Steve Chabot................................................ 2 WITNESSES Hon. Ed Case, Member of Congress, U.S. House of Representatives, Washington, DC................................................. 3 Hon. Tony Cardenas, Member of Congress, U.S. House of Representatives, Washington, DC................................ 5 APPENDIX Prepared Statements: Hon. Ed Case, Member of Congress, U.S. House of Representatives, Washington, DC............................ 8 Hon. Tony Cardenas, Member of Congress, U.S. House of Representatives, Washington, DC............................ 10 Questions for the Record: None. Answers for the Record: None. Additional Material for the Record: Hon. Gil Cisneros, Member of Congress, U.S. House of Representatives, Washington, DC............................ 12 Hon. Andy Levin, Member of Congress, U.S. House of Representatives, Washington, DC............................ 14 Hon. Gregorio Kilili Camacho Sablan, U.S. House of Representatives, Washington, DC............................ 18 MEMBER DAY HEARING: COMMITTEE ON SMALL BUSINESS ---------- WEDNESDAY, MAY 15, 2019 House of Representatives, Committee on Small Business, Washington, DC. The committee met, pursuant to call, at 11:40 a.m., in Room 2360, Rayburn House Office Building. Hon. Nydia Velazquez [chairwoman of the Committee] presiding. Present: Representatives Velazquez, Kim, Veasey, Delgado, Chabot, Kelly, Hagedorn, and Burchett. Chairwoman VELAZQUEZ. Good morning. The committee will come to order. I thank everyone for joining us this morning, and I want to, especially, thank my colleagues for joining us today for the House Committee on Small Business Members Day hearing. Today is a chance for the committee to hear directly from our fellow members of Congress about their priorities for supporting programs and policies that promote small business creation and growth. Our nation's nearly 30 million small businesses support 56 million jobs and can be found in every sector of the economy and in every congressional district in the country. On this committee, we probably represent parts of America from our northeastern coastal cities to our rural heartland and communities out west. And I know that when we travel back to our districts, we are eager to hear from our local businesses to understand what policies are working for them and what can we improve. For the members testifying here today, I know that you are also gathering feedback from Main Street businesses in your districts, and I look forward to hearing more throughout this hearing. On this committee, we oversee a wide range of policies and programs dedicated to supporting American entrepreneurs and small companies. We strive to support the budding entrepreneur by making it easier to access affordable loans and advocate for fair and true tax relief for small business. It is also the mission of this committee to open the lucrative federal marketplace to entrepreneurs, reduce onerous paperwork, and give small companies the tools they need to take care of their employees and build their companies. And we do so while working with our Republican colleagues. Our committee has a long history of working in a bipartisan manner because at the end of the day we all agree that small businesses truly are the backbone of our economy. They are what unify us in our work and hold together our local communities. Today, we have the chance to engage in an open dialogue on how we can collaborate to support small firms. Thank you again to all members for being with us today. I look forward to our discussion and to working on your ideas to foster an environment that promotes small business entrepreneurship and job creation in communities across this country. I now would like to yield to the Ranking Member, Mr. Chabot, for his opening statement. Mr. CHABOT. Thank you, Madam Chair. And as we begin, I would just point out that both the current Chair, Ms. Velazquez and I have served on this Committee for over 2 decades now, and we have both served as Chair and we have both served as Ranking Member, but one thing that we do do is work together in a bipartisan manner and that is one of the reasons this is one of the most productive Committees I believe in the House, and we are going to continue to do that. So I thank her for that. It has been quite some time since we have had a Small Business Committee Day where we have hosted Member Day like this, allowing other Members of Congress to come in and tell us what is working, maybe what is not working in some cases in their communities. It kind of broadens our perspective on what is happening around the country. It gives us a broader, I think, world view of things and what issues they are facing. We kind of have, those of us on the Committee, we sort of have small business on the brain. We think about this all the time and not to the exclusion of everything else because most of us are on other Committees. I happen to be on Judiciary, where we just discussed executive privilege and a whole range of things. Last week, we were finding the Attorney General in contempt, and so we all are on other Committees that do interesting things. And I am also on Foreign Affairs and there is always something happening around the world, but none of that is as important, as far as I am concerned, as the backbone of the American economy. And that is America's small business, about 30 million of those. So we are here to listen today and to learn, and so I want to thank Representative Case who had the opportunity to serve some years ago, and he had a sabbatical there for a while and now he is back and better than ever. And refreshed. And I kind of had that experience as well, except I lost when I left here. You went out voluntarily and ran somewhere else and then came back. So it is better to do it the way you did it than the way I did it. So, but we welcome you back, and I will yield back, Madam Chair. Chairwoman VELAZQUEZ. Thank you, Mr. Chabot. And the gentleman yields back. And if committee members have an opening statement, we will ask that they be submitted for the record. I also ask unanimous consent that Representative Sablan's statement in support of his bill, H.R. 2603, be submitted for the record. Without objection, so ordered. I will begin by introducing Mr. Case, Congressman Case, proudly represents Hawaii's 1st Congressional District. Mr. Case was born and raised in Hilo. His great grandparents on his father's side immigrated to Hawaii in 1896 from Kansas, and his family has lived in many of the state's islands over the generations since. Before joining Congress, Mr. Case spent 2 decades at the Honolulu law firm of Carlsmith Ball, where he rose to managing partner. Congressman Case serves on the Appropriations Committee, and I am also proud to serve with him on the Natural Resources Committee. Welcome, sir. You are recognized for 5 minutes. THE HONORABLE ED CASE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF HAWAII Mr. CASE. Thank you for that very kind introduction from both of you. It is great to be back in Congress, and it is great to be back with this Committee where I spent my own time. I served on this Committee, and it is good to share some thoughts with you again. I want to share those thoughts on issues of importance to our small business community, both nationally and in my home state of Hawaii. As you may remember from my prior service on the Committee, my focus is not only on keeping small business strong throughout our country but on protecting and expanding on Small Business Administration programs that support some of Nation's underrepresented populations and on insuring a level playing field between small business and large government contractors operating especially in Hawaii, issues that are not uncommon throughout the country. I want to begin by stressing that small business truly is the key to the success of our economy in Hawaii. According to the SBA, 99 percent of businesses in Hawaii are small business, and a clear majority of employees in Hawaii are employed by small business. These small businesses are the engine of the economy in my home state and thus, as national small business goes, so also does Hawaii business. Given the rich, ethnic diversity in Hawaii, minority-based programs are particularly important in my home state. Almost 93 percent of small businesses in Hawaii are minority-owned. They depend on and have received great benefit from programs such as the 8(a) Business Development Program and the HUBZone program, which help provide a level playing field for small businesses owned by socially and economically disadvantaged peoples in historically underutilized business zones. Additionally, the Microloan Technical Assistance Program has been a great help in the development of native Hawaiian businesses, and the Women-owned Small Business Federal Contracting Program provides Federal opportunities to industries where women-owned small businesses are underrepresented. The continuation of these programs is needed to empower some of our Nation's underrepresented populations that are the true drivers of Hawaii's small businesses. Furthermore, there are many great trade opportunities for Hawaii's small business given its place in the Indo-Pacific region. Hawaii exported $647 million in goods to 100 countries in 2018 with small businesses generating 64 percent of those total exports. The state's large market in 2018 was South Korea at $222 million, followed by Singapore, Japan, China, and Taiwan. With the world's fastest growing global markets in the Indo-Pacific, keeping trade open within this region is crucial to Hawaii's economy and our Nation's standing in the region. The State Trade and Export Promotion Grant Initiative and international trade loans have been vital components in developing Hawaii's small business for trade with these foreign markets, and I urge you to continue this Committee's longstanding support for these programs. Additionally, the Federal Government, primarily through the Department of Defense, is the largest source of Federal dollars in Hawaii, and it is important to make sure that small local businesses have a fair chance to compete for defense dollars. This is why I introduced legislation in my prior service in Congress which would help to guarantee small business's place in Federal contracting through such means as combatting contracting bundling. I would appreciate working with your Committee to continue this fight to help ensure that huge corporations do not just vacuum up and win all of the defense contracts, even though small business throughout our country, and Hawaii's small business particularly, are equally, if not better qualified to do the work. Finally, I want to briefly highlight the importance of the SBA's Contracting Assistance Programs in Hawaii. With 1 in 10 residents of Hawaii being a veteran, the Service-disabled, Veteran-owned Small Business Program has assisted numerous veterans in the state transition from military service to successful business owners. It is critical for this Congress to continue our Government's commitment to our veterans. In closing, thank you to all of you for your leadership in helping our Nation's small businesses, which I believe is a truly nonpartisan, bipartisan effort, and has been on this Committee, and specially for your consideration of the needs of Hawaii's small businesses. Mahalo. Mr. KIM. Well, thank you so much, Congressman, for coming on in here, and I am just taking the place of the Chairwoman temporarily here, but I appreciate you taking the time. And I just want to echo what the Ranking Member said, just how important it is for us to be able to hear about the different challenges and opportunities that small businesses are facing in every single corner of our country. So I appreciate you taking the time to come on out. I want to be mindful of your time as well. I know we are all very busy as well, so I just wanted to open it up and see if there were any particular questions for the Congressman while he is here; otherwise, we will take a brief recess until our other witness arrives. But I just wanted to open it up. Ranking member, anybody else, if you have any questions for the Congressman? Mr. CHABOT. We informed our folks we would not ask any questions. We usually do not do that with the members. Mr. KIM. Sure. Mr. CHABOT. And I was just thinking, I do not know when Mr. Cardenas is going to get here but I would have no objection to entering his statement into the record in full and that way we could accommodate him and everybody else here, too. Mr. KIM. Okay. Well, thank you so much. We are just going to take a very brief recess, see if our next witness arrives, and then we will proceed. [Recess] Mr. KIM. I would like to call the Committee back to order as we have the Congressman here who was first elected to the United States House of Representatives in 2013 for the 113th Congress and has represented California's 29th District ever since. Has been a leading voice representing the San Fernando Valley with a passion and commitment, and serves on the Energy and Commerce Committee. He is also a member of the Congressional Hispanic Caucus. Welcome to our Committee. Why do we not just jump right in as we just want to make sure we are mindful of everyone's time? So Congressman, over to you. You are recognized for 5 minutes. THE HONORABLE TONY CARDENAS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. CARDENAS. Thank you, Mr. Chairman. I appreciate this opportunity. When I came to Congress, I was not familiar with the fact that when members in that legislative body, it is not the custom and practice up here for members to actually present to the Committee, so I really appreciate this opportunity that this Small Business Committee is allowing and affording us to share because it is really important that we constantly have an opportunity to remind the people that we represent that we represent our districts, we represent our states, but we represent all of America. And one of the things that I would like to point out about small businesses is that I think Americans do not realize how prolific and how important small businesses are to everyday lives across this great Nation. Whether you are in the smallest town in America or you are in the biggest city, I think the numbers bear out that a large percentage of the folks who feed their family are actually working in a small business. And being a representative in the northeast San Fernando Valley where the vast majority of the individuals who live in my district are Hispanic, it is important for me to also point out that one of the fastest growing groups of small businesses in American for the last few years and going forward appear to be the Hispanic small businesses, both women and men-owned businesses. Myself, over 22 years ago, I fed my family, completely on commission of owning my own business, and it was something that I was very, very proud of. And I take that with me in every office that I have actually represented over the last 22 years. My ability to realize that I was responsible for the front end of a paystub. That I was responsible for making sure that when people walk through those doors of my business, I had to try very hard that I made good decisions for everybody, not just for my family but for the dozens of families that depended on my business staying open every time they got up and went to work and made sure that door was unlocked and available for them to feed their family. And that is what is going on across America. A few things that I would like to point out that are important not only to me and my community but I think important to all Americans, especially small businesses, is that the Federal Government has a tremendous role to play when it comes to access to capital. I remember owning my business that when I had access to capital and I had a great idea and I was able to expand my business, it was having access to capital that allowed me to move forward at the rate and speed that I knew I could and should in order to grow my business responsibility. And I remember those times when I had to wait for the capital or keep going from one bank to another to another to another to get that small business loan to expand my business. What happened, ladies and gentlemen, is that that did not afford me to hire more people because every time I expanded my business, along with that meant that more families got to feed themselves because I hired one of their family members to work for me. And it is really important that we realize that the Federal Government in the greatest Nation on earth has a tremendous responsibility to responsibly allow small businesses access to capital. And that might mean a small business loan of maybe $5,000 or $10,000 or what have you, that I can guarantee you will eventually mean that that same business that got a small business loan for less than $25,000, some day is going to end up looking to get a loan to maybe buy the building that they have been occupying for many years. Or to maybe even expand and buy the building next door so they could actually double their ability to produce. And those are the kinds of things that I think that are important not only to us as legislators but it is important to every single community that needs to make sure that businesses are not thwarted, businesses do not slow down, that that progress that people work very hard to make continues at a pace that is organic and natural to that business and to that community. So in a nutshell, to me, when I think of small businesses, I think of jobs. When I think of small businesses, I think of that business owner who knows the name not only of their workers but actually knows the name of the children of those workers. Actually knows and comes in and says, hey, how is your mom, how was her surgery last week, et cetera. Those are the kinds of relationships that small businesses create that maybe some larger businesses are lucky and fortunate to have that kind of relationship with the people that they depend on every single day. But I think that is at the core of what makes small businesses wonderful, great, and such an organic, important part of every corner of America. So what I am here to remind all of us is we are fortunate to be in the United States Congress. We are fortunate to have the responsibility of making policy. But let us not ever forget that every single day there are men and women in small businesses that are working 50, 60, 70, 100 hours a week to make sure that they keep those doors open, and that means that the families that work there and the community they serve are actually benefitting from that. So thank you very much for this opportunity. Mr. KIM. Thank you very much, Congressman, for your passionate words there. I can really hear in your voice just the commitment that you have to your constituents and the small businesses there, and it really hits on that connection of just community, you know, the community that many small business owners, employees, and others are forming. And that is why they have become the backbone and continue to be the backbone of our society and our communities as well. I just want to pause here before we conclude. Would any other member of the Committee like to be recognized at this moment? If there are no other comments, I would like to conclude this hearing by once again thanking my colleagues for being here today. I can hear the passion and the enthusiasm in your voice when you talk about the ways to strengthen our Nation's small businesses. Many of the issues that you have raised and others have raised about affordable capital and providing these opportunities, they are the work that we here in this Committee in the 116th Congress are dedicated to be able to do, working together across the aisle to give voice to small businesses and make sure they are not being left behind in any policy initiatives or in infrastructure or tax policies. I encourage you to work with our staff here, our colleagues, on the legislation that we are talking about and we are trying to figure out how to address to move forward to address the issues that you are doing and we are going to do everything we can to work in a nonpartisan way to be able to achieve those. I ask unanimous consent that members have 5 legislative days to submit statements and supporting materials for the record. Without objection, so ordered. If there is no further business to come before the Committee, we are adjourned. Thank you. [Whereupon, at 12:03 p.m., the committee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]