[House Hearing, 118 Congress] [From the U.S. Government Publishing Office] REVIEWING THE SBA'S OFFICE OF ADVOCACY REPORT ON THE REGULATORY FLEXIBILITY ACT ======================================================================= HEARING before the COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTEENTH CONGRESS FIRST SESSION __________ HEARING HELD JUNE 22, 2023 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 118-019 Available via the GPO Website: www.govinfo.gov ______ U.S. GOVERNMENT PUBLISHING OFFICE 52-558 WASHINGTON : 2024 HOUSE COMMITTEE ON SMALL BUSINESS ROGER WILLIAMS, Texas, Chairman BLAINE LUETKEMEYER, Missouri PETE STAUBER, Minnesota DAN MEUSER, Pennsylvania BETH VAN DUYNE, Texas MARIA SALAZAR, Florida TRACEY MANN, Kansas JAKE ELLZEY, Texas MARC MOLINARO, New York MARK ALFORD, Missouri ELI CRANE, Arizona AARON BEAN, Florida WESLEY HUNT, Texas NICK LALOTA, New York NYDIA VELAZQUEZ, New York, Ranking Member JARED GOLDEN, Maine KWEISI MFUME, Maryland DEAN PHILLIPS, Minnesota GREG LANDSMAN, Ohio MORGAN MCGARVEY, Kentucky MARIE GLUESENKAMP PEREZ, Washington HILLARY SCHOLTEN, Michigan SHRI THANEDAR, Michigan JUDY CHU, California SHARICE DAVIDS, Kansas CHRIS PAPPAS, New Hampshire Ben Johnson, Majority Staff Director Melissa Jung, Minority Staff Director C O N T E N T S OPENING STATEMENTS Hon. Blaine Luetkemeyer.......................................... 1 Hon. Nydia Velazquez............................................. 2 WITNESS Mr. Major L. Clark, Deputy Chief Counsel for Advocacy, United States Small Business Administration-Office of Advocacy, Washington, DC................................................. 4 APPENDIX Prepared Statement: Mr. Major L. Clark, Deputy Chief Counsel for Advocacy, United States Small Business Administration-Office of Advocacy, Washington, DC............................................. 25 Questions and Answers for the Record: Questions from Hon. Williams and Answers from Mr. Clark...... 59 Additional Material for the Record: NFIB......................................................... 63 U.S. Chamber of Commerce..................................... 66 REVIEWING THE SBA'S OFFICE OF ADVOCACY REPORT ON THE REGULATORY FLEXIBILITY ACT ---------- THURSDAY, JUNE 22, 2023 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 10:02 a.m., in Room 2360, Rayburn House Office Building, Hon. Blaine Luetkemeyer [vice chairman of the Committee] presiding. Present: Representatives Williams, Luetkemeyer, Stauber, Meuser, Van Duyne, Salazar, Mann, Ellzey, Molinaro, Alford, Crane, Bean, Hunt, LaLota, Velazquez, Golden, Mfume, McGarvey, Scholten, Thanedar, Chu, Davids, and Pappas. Mr. LUETKEMEYER. [Presiding] Okay. We will begin the hearing with our prayer and pledge. Today, the prayer is led by Mr. Crane from Arizona. Mr. CRANE. All right. Dear Heavenly Father, thank you so much for giving us the opportunity to be here in the nation's capital. We ask that you continue to bless this nation. Guide us, direct us, give us wisdom. And we also ask for prosperity to continue to flow to the citizens of this country. In your son's name, Amen. Mr. LUETKEMEYER. With that we will stand for the pledge. Welcome to everyone this morning. Chairman Williams is out and in his vernacular the ace of the pitching staff is on leave today and we have reached the bullpen to get the relief pitcher coming in. So that is where I am at this morning. Glad to be with everybody. Glad we are able to do this. So I now call the Committee on Small Business to order. And without objection the Chair is authorized to declare a recess of the Committee at any time. I now recognize myself for my opening statement. Welcome to today's hearing which will focus on reviewing the Small Business Administration's Office of Advocacy Report on the Regulatory Flexibility Act. First, I want to thank our witness, Mr. Major L. Clark, who serves as the deputy chief counsel for Advocacy at the SBA. Hope this is the first of several productive hearings we will have with you this Congress, and I appreciate you speaking with us today, sir. This hearing could not be coming at a more important time. The Office of Advocacy is intended to be a crucial tool, serving as a watch dog and advocating for small businesses within the federal rulemaking process. This Committee has drawn great attention to our concerns with the federal government regarding the Regulatory Flexibility Act. The Biden Administration's actions with rulemaking have proven the need to strengthen the RFA in order to be an effective check for small businesses. We have seen the insufficiencies through numerous examples of federal agencies failing to consider the impact of their rulemaking on small businesses. Although the Office of Advocacy is doing more work with the RFA than it has in the last 10 years, excessive regulations are continuing to hurt small businesses. It is clear we must conduct this necessary oversight to ensure the Biden administration is properly amending the laws designed to safeguard small businesses and the regulatory process, not create a further burden. Creating this change starts with the Office of Advocacy. Over the years, your office has faced several challenges in its duty to advocate for small businesses. While you are recognized as being independent of the SBA, it is clear there is often association that makes it difficult for your office to have a final say throughout the regulatory development process. Another concern previously addressed by this Committee is the Office's Chief Counsel of Advocacy position sitting vacant since 2017. We have sent letters to President Biden calling for him to fill this position. It is clear to this Committee that President Biden does not see this position as a priority. Perhaps this administration would like to leave this position vacant so they can continue with their reckless rulemaking agenda. To date, the federal government has done a shameful job of meeting their responsibility to consider the impact that proposed regulations will have on small businesses. The Democrat standard of ramming through crushing regulations, reckless spending, and driving up costs on small businesses must stop. Burdensome regulations and government red tape create a headache for all Americans but they are especially harmful for main street. Today, examining a report on the Regulatory Flexibility Act is an important step to continuing exposing the federal government's failures and abuses to provide protections for main street. As a Member of the House Committee on Small Business, we will continue to fight for these crucial revisions in the RFA and rulemaking process to support Main Street America and President Biden clearly is not. With that, Mr. Clark, thank you again for joining us today. We look forward to the conversation ahead. Before I yield I would ask for unanimous consent to enter into the record a statement from the NFIB. And without objection, so ordered. I now recognize our Ranking Member from New York, Ms. Velazquez, for her opening remarks. Ms. VELAZQUEZ. Thank you, Mr. Chairman. Mr. Clark, welcome back to the committee. I want to take a moment to thank you for your service. I know that you have been the Acting Chief Counsel of Advocacy for more than 6 years and your dedication is commendable. The position of chief counsel is an important role. The Office of Advocacy serves as the independent voice of small businesses within the federal government. It is their job to promote the concerns of small firms before all three branches of the federal government and state policymakers. A central component of that role is to monitor and report on agencies' compliance with the Regulatory Flexibility Act, or RFA. Today, I hope to have a productive discussion on Advocacy's RFA work in fiscal year 2022. As you know, 99.9 percent of all U.S. businesses are considered small. Some of these small firms can have 1,500 employees and up to $47 million in receipts, depending on the industry. While they may be considered small in their sector, many of the larger firms have lawyers, accountants, and other experts who understand the rules, submit comments on rules to the agency, and help the business comply with regulations. It is important to make this distinction during our discussion today and take the time to learn more about how the Office of Advocacy conducts outreach to ensure the views of the smallest of the small businesses are being conveyed to the agencies, and in turn, level the playing field for small businesses. We must also discuss comment letters Advocacy files with federal agencies, which are not violation letters, but efforts to alert agencies to their rules' impact on small businesses. In many areas these letters are effective, leading to a number of modifications to the rules that have benefitted small businesses and still achieved the mission of the regulations. Contrary to what we will hear today, federal regulations can and do benefit our economy, like regulations that protect our air and waters, boosting small businesses that comprise the outdoor recreational industry, which accounted for $454 billion of our GDP in 2021. The key is not to roll back all regulations that protect our health, safety, and environment but to allow Advocacy to work with agencies to recognize the impact regulations have on small businesses, and work to find ways to balance the shared goal of minimizing the burdens and achieving the goal of the regulation. Smart, well-crafted, common-sense regulations have the potential to unleash innovation and provide critical health, safety, and environmental protections. With that, thank you again for testifying today, and I look forward to hearing more about the regulatory work you have performed and how we can strengthen the Office of Advocacy and ensure that small businesses have a voice at all levels of government. Thank you, Mr. Chairman, I yield back. Mr. LUETKEMEYER. The gentlelady yields back. With that we will now introduce our witness, Mr. Major L. Clark. Mr. Clark is the deputy chief counsel for Advocacy for the Small Business Administration's Office of Advocacy. Currently, he leads the office and is responsible for the day- to-day operations. Prior to his time at the SBA, Mr. Clark was a senior corporate officer for the Maxima Corporation managing several multimillion dollar federal contracts. Earlier in his career in public service, Mr. Clark worked on this very committee as the chief administrative officer. Mr. Clark earned his Juris Doctorate and Masters of Urban Planning from the University of Iowa and a Bachelor of Science in Political Science from North Carolina Agricultural and Technical University. He also served as a professor in the Graduate Urban Planning program at Morgan State University. Mr. Clark, thank you for being here today. We look forward to the conversation ahead. Before recognizing the witness I would like to remind him that his oral testimony is restricted to 5 minutes. If you see the red light come on in front of you, sir, that indicates that it is time to wrap up your testimony and your questioning. I would ask you to make these microphones pull forward. The whole box can be pulled forward. Make sure that you speak into it clearly not only for the benefit for us but I know we are taking notes. The stenographer is here and they need to be able to hear your words distinctly. So with that, you are recognized for 5 minutes, Mr. Clark. STATEMENT OF MAJOR L. CLARK, DEPUTY CHIEF COUNSEL FOR ADVOCACY, U.S. SMALL BUSINESS ADMINISTRATION-OFFICE OF ADVOCACY Mr. CLARK. Good morning, Chairman Luetkemeyer, and Ranking Member Velazquez, and Members of the Committee. I am honored to be here today on behalf of the Office of Advocacy to present testimony to you on federal agency compliance with the Regulatory Flexibility Act. Advocacy is an independent office that is required by statute to speak on behalf of the small business community before federal agencies, Congress, and the White House. This testimony does not reflect the views of the administration and has not been circulated to the Office of Management and Budget for clearance. In fact, none of our products are cleared by the administration because of our independence. As deputy chief counsel, and on behalf of the entire Advocacy family, I would like to thank the Committee for your continued support over the years. Congress recognized the importance of small businesses to our nation's economy. As such, Advocacy was created in 1976 to be an independent voice for small businesses within the federal government, particularly during the federal regulatory process. Our legal team works to ensure agencies' regulations do not unduly burden small businesses. Our Economic Research team conducts important research on small businesses and their role in the economy. And our regional advocates provide outreach to small business stakeholders across the country. I will also note that 4 years after the passage of the RFA, and I must have been 10 years old, I was the staff director of this Committee, so I understand firsthand the work that goes into important legislation such as this and how important small businesses are to the economy and to Congress. The Regulatory Flexibility Act requires federal agencies to consider the impact of their regulatory proposals on small entities, analyze effective alternatives that minimize small entity impacts, and make their analysis available for public comment. As the watchdog for small businesses, Congress charged Advocacy with ensuring agency compliance with this law. The specific requirements of the RFA are discussed in my written testimony. Advocacy reports to Congress every year on agency compliance with the RFA. Our report for fiscal year 2022 was submitted to this Committee last month. Advocacy continued to remain active during fiscal year 2022 on behalf of our nation's small businesses. In fact, our output increased compared to previous years. We submitted a record 37 comment letters to federal agencies and hosted a record 30 roundtables on regulatory concerns facing small businesses. We also provided training to 257 officials at 10 agencies. We conducted four SBREFA panels with the CFPB and the EPA. We also achieved numerous victories for small businesses because of working with agencies on RFA compliance. These numbers were due in large part to new methods of communication and outreach Advocacy has adopted since the COVID-19 pandemic to reach more small businesses, including holding virtual meetings and roundtables. Regarding agency compliance with the RFA, in recent years the most frequent concerns Advocacy has cited in public comment letters to agencies were deficiencies in the RFA analysis. These include but are not limited to inadequate analysis of small entity impacts, and lack of consideration of significant alternatives. Advocacy has also increasingly argued that agencies need to conduct more outreach to small entities during the rulemaking process. Mr. Chairman, Advocacy is aware of H.R. 399, the Small Business Advocacy Improvements Act, which recently passed the House of Representatives. This bill would amend Advocacy's charter to clarify our authority to research and represent small interests on international issues. Because Advocacy already does these activities, this is a commonsense change to our charter. Mr. Chairman, this concludes my oral testimony and I request that Advocacy's RFA report 2022 be included in the record, in the hearing record. Mr. LUETKEMEYER. Without objection. Mr. CLARK. Thank you for the opportunity to testify today and I am happy to answer any questions that you may have. Mr. LUETKEMEYER. Thank you, Mr. Clark. With that we will move to the Member questions under the 5- minute rule and I will recognize myself for 5 minutes. The Office of Advocacy's most recent report that we just entered into the record stated that your office, and you stated this in your testimony, submitted 37 comment letters, held over 30 roundtables, and trained 257 federal agency staff on the RFA. This is some of the highest volume work that has come out of this office in decades. However, much of it seems to have been in vain if we are looking at the mountains of regulations that have been placed on small businesses in the past few years. The American Action Forum estimates there have been over $318 billion in total costs and 218 million additional paperwork hours associated with President Biden's regulatory actions from just his first 2 years in office. So Mr. Clark, do you feel that your guidance is taken seriously by the administration, the various agencies? I mean, I realize that you are writing letters and you are having roundtables, trying to train people, and yet we wind up with $318 billion worth of costs in new rules and regulations, and some of them do not follow up with small business costs. Can you comment on that? Mr. CLARK. Thank you, Mr. Chairman, for your question. Yes, I do think that the Office of Advocacy has its work in terms of representing small businesses, continues to make improvements for our small businesses, and specifically, in our small business economy. I go back in time as I said in my report to the period of time in which there was not a Regulatory Flexibility Act, and moving forward there has been tremendous changes, some changes to the Regulatory Flexibility Act, improving the process. But the overall thrust of that has been to give more support to our small businesses as they continue to be the economic backbone of this country. Mr. LUETKEMEYER. Well, I guess the question is do you think the agencies are living up to their requirements to file reports with regard to the impact on small businesses? And it does not appear to be that way to me whenever, if you look at the lack of reports that come out of some of the agencies when it comes to some of these rulings. There is no report with regards to the impact on small businesses, and if it is, it is just sort of lip service. There is no real true analysis there. Would you agree with that? Mr. CLARK. Yes. I would agree that in some of the regulatory actions that the analysis has not been true. And that has been one of the elements that we have pointed out in our comment letters to the agencies. But it is also one of the elements in which we have been working diligent with agencies to improve their analysis of small businesses. Mr. LUETKEMEYER. Well, so that begs the question that if they are not doing the job then how can we get them to do the job? What kind of enforcement mechanism do we need in place? And so I just want to throw something out here for you to consider and we can discuss further. But it seems to me that if they are not going to follow this, and they have been given the charge to do their own analysis, if they are not doing it, maybe we need the CBO or maybe we need your office to do the analysis of all these rules to find out what the real cost of them is as well as the impact on small businesses, because they are not submitting reports now, and the ones they do submit are not quite frankly worthwhile. So we need to have an independent third party coming in and doing their work if they are not going to do it. Would you agree with that or have you got a better idea? I have got a minute and a half to discuss this. Mr. CLARK. Well, I do not know if we need a third party to come in. I think one of the areas that we have looked at over the period of time since I have been in Advocacy has been the shortage or the lack of data that is available on small businesses. And we have worked very diligently with the Census office to develop much better data on small business and small business impact. So I think part of what we see developing over a period of time has been this lack of data. And we see in those agencies where data has been much better in terms of analysis, that the analysis has been much more beneficial to small businesses. Mr. LUETKEMEYER. Well, I know as the Ranking Member in the last term we worked with a number of different groups, whether it was the Chamber of Commerce, the NFIB, Job Creators Network. There are a lot of different entities out there that have lots of information on small businesses and the effect that these rules have. As I indicated in my question earlier, the American Action Forum did an estimate of $318 billion on the cost of these rules. So I think there is probably enough data available. We just have to find a way to get it accumulated. With that, my time is expired. Thank you for your testimony this morning, Mr. Clark. And with that we recognize the lady from New York, the Ranking Member, Ms. Velazquez, for 5 minutes. Ms. VELAZQUEZ. Thank you, Mr. Chairman. Mr. Clark, the size standard for some industries allows small firms to have 1,500 employees, and an average receipt up to $47 million. Your office advocates on behalf of these larger companies in the name of small businesses. Can you address this concern? Mr. CLARK. Thank you for your question, Ranking Member Velazquez. One of the things that we have been pushing agencies to do in their analysis is to recognize that the regulation one size does not fit all. And in that regard what we have been working very diligently trying to get them to do is analyze the impact of the regulation on different levels of small business. So, yes, the larger businesses as you said in your opening statement do have more resources, but we also are very concerned with that one, two, three, four-man person shop that are without those resources. And those are the ones that we want the agencies to work on. Ms. VELAZQUEZ. I hear you. Trade associations and law firms which represent both big and small businesses participate in your events and are sharing the views of big businesses. What steps do you take to ensure that the feedback that you are soliciting is truly that of small businesses and not just those that have the resources to hire attorneys and consultants? Mr. CLARK. Our roundtables are open to the public. But as we engage individuals who are talking, doing those roundtables and so forth, we engage them to inform us of who they are and what type of business they have, the size of their business. So we are very conscious of the fact that because our roundtables are open to the public others can come in. But we try to streamline that process when it comes to receiving the information from those who are testifying or providing information to us. Ms. VELAZQUEZ. How do you do that? Do you have the staff? Mr. CLARK. Our staff, during our roundtables, whatever lawyer is in charge of that roundtable is asking that question. So a person presents, we ask that person exactly tell us about your business. Ms. VELAZQUEZ. The RFA requires agencies to consider the regulatory impacts on small entities, but when Advocacy submits comment letters to agencies, it focuses on the potential costs of regulations. This is only half of the equation. Why does Advocacy not report on the benefits of regulation to small businesses? Mr. CLARK. In part because our statutory mandate requires us to focus on cost. Ms. VELAZQUEZ. I know that. That is what the law says. Mr. CLARK. Yeah. Yeah. Ms. VELAZQUEZ. What needs to be done to get a complete analysis of the impacts on small businesses? Mr. CLARK. Well, one of the things we do and we recognize, that small businesses are not monolithic, and that small businesses have different interests. So in our analysis, in our discussions on compliance, one of the things we are doing is trying to bring all viewpoints of small businesses to that process. And in that regard, there are small businesses that will share with us that a proposed regulation may very well be beneficial to them as opposed to overly burdensome in terms of costs. So we try to put all of that into the discussions that we have with the agencies regarding that regulation. Ms. VELAZQUEZ. I think that going forward it is very important so that everyone could have a whole picture of the impact or benefits of such regulations. I am pleased that Advocacy has adopted new ways to reach more businesses. Have the online roundtables and events led to more outreach to small businesses that historically have not attended? Mr. CLARK. We think so. We think because the technology has been drastically improved, which allows for virtual roundtables, we think we are able to reach a much larger segment of the small business community. We are able to reach many small businesses who simply can't take time from their work to attend a very formal process but can, in fact, go online on their computer or their cell phone and participate. Ms. VELAZQUEZ. I yield back. Thank you. Mr. LUETKEMEYER. Time has expired. With that I recognize Mr. Crane from Arizona for 5 minutes. Mr. CRANE. Thank you, Mr. Chairman. First I want to start by saying thank you, Mr. Clark, for appearing before the Committee today. Sir, would you say that you believe in environmental justice? Mr. CLARK. How would you define environmental justice, sir? I mean, I do believe in environmental justice across the board. Yes. Mr. CRANE. Can you go into that a little and why you believe in that? Mr. CLARK. Well, environmental justice for me personally is a process of keeping in balance the structure that has been placed before us. You know, that God has placed before us. And I believe that there needs to be that balance in terms of how we interact with the environment. Mr. CRANE. Thank you. Would you say that your office is an advocate of the Justice 40 Initiative? Mr. CLARK. Our office has presented information on the Justice-40 Initiative in the sense of getting a much more robust involvement with the broader community, yes. Mr. CRANE. Do you think the EPA could apply these regulations inconsistently or in a way that prevents small businesses from developing? Mr. CLARK. Our intent in the Office of Advocacy is to continue to work with EPA so that that does not happen. Mr. CRANE. Sir, are you aware that the Environmental Justice Small Grans program has funded projects completely unrelated to environmental justice? Mr. CLARK. I am aware of some of those through our attorneys, yes. Mr. CRANE. What would you say, sir, is the most effective thing that your office has done to advocate for small business? Mr. CLARK. I am sorry, can you repeat your question? Mr. CRANE. What would you say is the most effective thing that your office has done to advocate for small business? Mr. CLARK. Our office has over the years presented itself to all of the federal agencies as representing small business. We continue to promote the statutory mandate that we are the watchdog of small business. And in that regard, we have been I think very successful in getting agencies to understand the role that we play and that we are there to represent the interests of small business. Mr. CRANE. Okay. Mr. CLARK. I can give you examples of some of the things we that we have done. Mr. CRANE. Yesterday, sir, I had the Arizona Restaurant Association in my office. We had about a dozen small business owner-operators in my office. One of the things that they were, you know, very concerned about is, you know, the raising of minimum wage. They talked about how it was affecting them. Has your office done any advocacy whatsoever to push back on these types of mandatory raises that are crushing small businesses? Mr. CLARK. Our office has been aggressively involved with the---- Mr. LUETKEMEYER. Mr. Clark, Mr. Clark, can you pull the microphone closer to you, please? Mr. CLARK. Yes, sir. Can you hear me now? Mr. LUETKEMEYER. Yeah, that is fine. Thank you. Mr. CLARK. I am sorry. Our office has been aggressively involved with the Department of Labor on that particular issue from the outset, and we have had roundtables across the country. We have submitted comment letters. We have presented various viewpoints on the impact of the minimum wage on small businesses. And we have had---- Mr. CRANE. So real quick, sorry to interrupt you, sir, but you would say that your office has actually pushed back on making a set minimum wage mandatory for small businesses; is that what you are saying? Mr. CLARK. Our office has responded to the proposed regulations from the Department of Labor carrying forward the comments from small businesses in terms of the impact of those regulations on their businesses, yes. Mr. CRANE. Thank you. What about this administration's seeming war on gas and oil as soon as they took office. Have you guys advocated at all about that and just the crushing impact that that has had on not only transportation but delivery of all small goods that these small businesses use? Mr. LUETKEMEYER. We are out of time. 35:35xxx Can he answer that really quickly, Mr. Chairman? Mr. CLARK. Our office--I am sorry. Excuse me. Mr. LUETKEMEYER. We are out of time. Mr. CLARK. We will be happy to answer that question in writing, Mr. Chairman. Mr. LUETKEMEYER. We are out of time. With that we go to the gentleman, Mr. McGarvey, from Kentucky for 5 minutes. Mr. MCGARVEY. Thank you, Mr. Chairman. Mr. Clark, thank you for being here today. At least in my time on this Committee you have the distinction of having one of the coolest names so I can see why they made you the third. That is a name you hold on to and pass down. As you know, the Office of Advocacy was created by Congress in 1976 to be the independent voice for the small business community within the federal government. That is a major, major responsibility and one that we think is very important. Small businesses are the backbone of our economy and they need to have a voice, an advocate in the federal government that is looking out for them. Part of today's focus is the Regulatory Flexibility Act. This requires federal agencies to work with the Office of Advocacy to gather input from small businesses during the rulemaking process so that our agencies can actually understand how the rules and regulations we are promulgating will impact small businesses. We need federal agencies to be able to create strong rules and regulations, but we need those rules and regulations to work. We have to make sure that the small businesses have their voice heard in the rulemaking process and that the proposed rules do not unduly burden our small businesses. So Mr. Clark, what steps has the Office of Advocacy taken with federal agencies and small businesses to ensure that the rules and regulations achieve their policy goals without hurting small businesses? Mr. CLARK. Thank you for your question. The Office of Advocacy works with agencies in the development, as they develop the proposed regulations that they want to implement. We have over the years been able to work much more closely with the agency as they develop their regulation. Agencies have asked us for input really on their regulations as it impacts small businesses. So we have become very aggressive but not overbearing in terms of our ability to work with the drafters of regulations, giving them suggestions and input in terms of how that proposed regulations will impact small business. Mr. MCGARVEY. Thank you. And again, that is important because sometimes something looks good on paper in the legislative body. Then all of a sudden it gets out there in the wild and where the rubber meets the road it does not work as well. So I appreciate you taking an advocacy stance. It is important, too, I think when looking at the advocacy how you balance things. It is a balancing act; right? So how do you balance the competing interests of wanting to create rules that are as effective as possible, for instance, strong environmental regulations, without harming small businesses and their competitiveness? Mr. CLARK. Well, part of what we do in that regard is to try to provide the agency with a balanced analysis of how their proposed rule may be impacting small business. And that takes into consideration those small businesses that are supporting the regulation and those small businesses that are not. So, we try to give the agency that type of assessment but also giving them or trying to provide them with data from time to time that we have on the various small businesses that will be impacted. And that was the question earlier to Ranking Member Velazquez was that we recognize that small businesses, one size does not fit all in terms of small businesses. So we try to give the agency that viewpoint as they look at the regulatory processes. Mr. MCGARVEY. Thank you. I think very important. And in my small remaining time I just want to point out in my state of Kentucky we make a little product called bourbon. And 95 percent of the country's bourbon is made in my state. One hundred percent of the good stuff. And a lot of those are made by small distilleries in the state. Small businesses. So my colleagues on this Committee knows it takes four things to make bourbon. You have got to have corn, yeast, a new charred white oak barrel, and of course, water. So water regulations are very important for us in the state of Kentucky. We have been watching the WOTUS rulemaking closely. How does your office work with the EPA? And have you urged the EPA to consider small distillers when the agency considers rules to protect our nation's water? Mr. CLARK. Well, we have, as you may know, we did comment on the WOTUS regulation. But more specifically, we have actually been to your state, the state of Kentucky, 3 years ago and toured many of the small business distilleries. So we have firsthand information, firsthand look-see as to how small businesses are making product and trying to remain economically viable. Mr. MCGARVEY. Thank you, Mr. Chairman. I yield back. Ms. SALAZAR. And now I recognize Mr. Meuser from Pennsylvania for 5 minutes. Mr. MEUSER. Thank you, Madam Chairwoman. Appreciate it. Mr. Clark, thank you very much for being with us. I am enjoying your testimony. So picking up on a few subjects that we started with regarding regulatory flexibility and such and your ability to have oversight and weigh in. This WOTUS ruling, for instance, that my colleague brought up. Now, I am not going to contend that Pennsylvania potatoes are more important than Kentucky bourbon but we are farmers too and deal with the WOTUS issue. I mean, 100 percent of them. So and not in a favorable manner. Now, if they were talked with and it was inclusionary how it was discussed and how we come up with the right plan for the environment and for farms and businesses that would make sense. Is that something that you take a role in, bringing people together so we get the right answers? Mr. CLARK. Yes. Again, our responsibility as statute is to be the voice for small business. And one of the ways we do that is to try to bring all small businesses together to give us their input, their assessment. Because we don't have all of the answers. We need our small businesses to tell us very specifically how various proposed regulations may impact them. And not only how they may impact them but what they consider to be alternative and viable solutions to the problems. Mr. MEUSER. You have seen some of the reports, like the NFIB, for instance. I don't know if you work with them and gain information from them but, I mean, the attorney general of Iowa said that 97 percent of the land in Iowa would not be subject to federal regulation. I mean, that sounds pretty excessive. And from what I know from on-the-ground information, that is something that needs to be looked at. As well as the discussion on energy. I mean, there is a right way to do things. There is a responsible way. There is an irresponsible way. I think our regulatory nature in our country at this point, and I know the Marselles-Shale region, for instance, where we have natural gas, there are many regulations that come out that hinder and suppress the ability to grow natural gas, which by the way is half the carbon emissions of oil and other fossil fuels. And yet, these regulations just seem to keep coming. So are fossil fuels in general, I mean, energy costs, is that something that your agency works on for the benefit of small business? Mr. CLARK. Yes. We have three attorneys that are involved in that area. I will say, however, Congressman, that one of the things that has to be considered in the discussion of the regulation is that there are some regulations that do come out which are beyond the control of Advocacy to deal with and that is because of the way the statutes have been designed for those regulations. For example, an interim final regulation is really beyond our ability even though we have more recently been involved in trying to work with agencies on interim final regulations as they impact small businesses. Mr. MEUSER. Good to hear, sir. What about Scope 3 with manufacturers and any company that has to deal with Scope 3? And many, as you know, small businesses are preparing for Scope 3. It is just on public companies now but they are getting ready for it. Mr. CLARK. Yes. We have actually submitted a comment letter to the SEC as well as to the FAR counsel on this whole Scope 3 issue, as well as, I believe, some Members of Congress have also submitted letters on the impact of Scope 3 on small business. So we are aware of that. We are following that. We are wanting to make sure that our small businesses are not unduly impacted by this process. Mr. MEUSER. Good. Well, I look forward to working with you on that because our focus is to advocate, as well, for small businesses. Do you think that some federal agencies overly certify their proposed regulations as stating that they will not substantially impact small businesses? Do you battle with some agencies on occasion, on their over certifying? Mr. CLARK. Our concern when an agency does, in fact, attempt to certify a regulation that that certification has a factual basis. And the factual basis should set forth the reasons why they feel that the impact is minimum or to no extent on small business. And when agencies fail to give us that factual basis we do bring it to their attention. Mr. MEUSER. Thank you. I have run out of time. Thanks for your service. Thanks for your work. I yield back, Madam Chair. Ms. SALAZAR. Thank you. And now we recognize Ms. Scholten from the state of Michigan for 5 minutes. Ms. SCHOLTEN. Thank you so much. Thank you, Madam Chair, and thank you, Mr. Clark for being here today. I am happy that we are focusing on this critically important issue and the SBA's Office of Advocacy. I think it is so important that the Committee highlight the oversight work and the work that your office does to streamline and make small businesses as efficient as possible. I could not agree more with what has been said today about how excessive regulation far too often hamstrings businesses. Mr. Clark, an important responsibility of your office is to submit public comment letters to regulatory agencies during the rulemaking process. Can you walk us through how Advocacy determines when to comment on a proposed rule? What are instances where the office has been successful in influencing agencies through submitting public comment letters? Mr. CLARK. Thank you. Yes. The Office of Advocacy, as I said, the regulatory part is made up of attorneys and we are involved across the board with the agencies in our specific areas. We work internally with the agency where possible to deal with the issues that they are trying to deal with and with the impact of the proposed regulation on small business. When we reach a point that we cannot agree on what the changes should be and the agency goes forward with its proposed regulation, at that point in time we do write a public comment letter highlighting the concerns that have been shared with us by small businesses and asking the agency to take action to modify its regulation as it impacts small business. I mean, an example of that if you like is with the Department of Defense which is part of my area with what is called the CMMC, the Cybersecurity Maturity Model for cybersecurity where we work with the agency on what they were proposing. It was going to have a tremendous impact on our small businesses in the defense industry. They tried to make some changes. Did not make sufficient changes. We wrote a comment letter and I think Members of Congress took action and that particular regulation was pulled. They are now back with a modified regulation and hopefully we are examining it. Hopefully it will be much better than what it was in terms of the negative impact that it was having on small businesses in our defense industry. Ms. SCHOLTEN. And you and your office will continue to follow through on that presumably to ensure that it is actually implemented in a more efficient and streamlined---- Mr. CLARK. Yes. Yes. As a result of our involvement with the particular unit, they have actually reached out to me wanting input and so forth before they go forward. And that is one of the things that we tried to develop that relationship with the agencies so that we can give them firsthand information, firsthand input in the process. Ms. SCHOLTEN. Thank you. I think that smart, well-crafted regulations is what we are all after here. I know that I hear consistently from small business owners in my district that one of the most time-consuming things that they have to spend their time on is trying to discern overly complex regulations. In West Michigan and across the country, small businesses do not have access to attorneys, accountant, or other resources that they can lean on to help make sure that they are in compliance. Quickly, if you can, how do small businesses become aware of changes to federal rules? And what does your office do to make sure that businesses get that information and can work as much as they can without the resources of an attorney or an accountant to make sure they are in compliance? Mr. CLARK. We do several things in that regard. One, we publish on a weekly, daily basis really, what is called a regulatory alert. And as the regulations come out, as our attorneys have looked at the regulations to make some determinations, they publish on our website this regulatory alert to alert the small business community of the proposed regulation. We also, as I mentioned earlier, have regional advocates. And one of the things that we encourage our regional advocates to do is to push that proposed regulation to their stakeholders in the various states that they operate in. But we also reach out to other trade groups that we know have an interest in that. So we are trying as much as possible to spread the knowledge of the proposed regulation---- Ms. SALAZAR. Your time is up. Mr. CLARK.--trying to get as much impact and input from our stakeholders. And depending---- Ms. SALAZAR. Thank you. Your time is up. 52:18xxx few more minutes. So thank you. Ms. SCHOLTEN. Thank you, Madam. Ms. SALAZAR. So now I will recognize myself for 5 minutes. I am Maria Salazar. I represent the City of Miami and I thank you very much, Mr. Clark, for being here today. We, as a Committee, we appreciate the work you do as an independent voice. I was thinking when I was listening to your words that you have a very big job. You have a very big job. You are like the David against the Goliath. And all this overburdening of regulations coming from the federal government. And when I say that I come from the City of Miami, I represent 75 percent of my constituents are first generation Americans. Most of them do not speak English very well but they love the American system. And they are escaping countries where the government is all over them. So they are coming to the United States asking or yearning to be able to have their small shop, like you said, two or three employees. We are not talking about 500 employees. We are talking about three people or four people. But that is their American dream. And now that I am hearing is that the feds are not listening to you and they are crushing our people, our small business community. So my first question is, sir, how can we help you so we can help the people that I just described as soon as possible? What is it that we need to do, one step that we need to do right now in order to help you do a better job? Mr. CLARK. Well, one of the things that we have done over the period of time and as we have held what we call regional regulatory roundtables, and we have been very successful in getting our small businesses--one, two people shops, larger shops to come out. Ms. SALAZAR. What happens with that info? Mr. CLARK. Much more information, much more outreach in that regard where it is not an adversarial situation. It is us sharing information and helping to educate and helping the folks understand it is something that we would love to work with the Committee on in terms of the Members in your various districts to ensure that---- Ms. SALAZAR. I get it. But you are telling me there is info. You are doing focus groups like we would say on television and that you are bringing all that info back to the mothership. And from what I am hearing, the feds are just not listening to you. And that is the main problem. You are an advocate for the small business group. Mr. CLARK. Yes. But it depends on the situation. When we were holding, and when we held our regional roundtables across the country about 2 years ago, we actually had agencies in attendance at those roundtables. And they heard firsthand from stakeholders, from small business stakeholders as to the issues that were impacting them. And they went back to their agencies---- Ms. SALAZAR. With all due respect, sir, because of my time, give me just one way or one step that we could take as a Committee to help you stop this trend in the last 2 years when the Biden administration has been in power, there are the figures, $300 billion costing business and 200 million hours of additional paperwork. That is not the American dream. Mr. CLARK. Well, one way you can do it, again, as I said earlier, is to work with us in terms of outreach to our small businesses because small businesses represent 99 percent of all businesses in the country and our ability to reach all of them with the small staff that we have is impossible but---- Ms. SALAZAR. In order to reach them for what reason you need to reach them? I am talking about reaching the federal agencies with respect to what you are saying. Mr. CLARK. Yeah. We need to reach them in order to understand how the regulations are impacting them. Ms. SALAZAR. But don't we know that already? Mr. CLARK. Sometimes---- Ms. SALAZAR. We know that more regulation impacts them more adversely. Mr. CLARK. Sometimes we don't. For example, we talked about the minimum wage. Well, that minimum wage regulation has a different impact on different types of businesses. And that is the type of information that we need to be able to present back to the agency. Ms. SALAZAR. I have 30 more seconds. How is your relationship with Administrator Guzman? Your office is very close to the main office for the SBA. Is that good? Does that help you do your job better or it does not? Mr. CLARK. Our job is independent of SBA. That is what we do. We are independent of SBA even though physically we are very close to that office. Ms. SALAZAR. Right. Mr. CLARK. We carry out our responsibility as the statute requires us to do. Ms. SALAZAR. Okay. Thank you, sir. My time is up. I now recognize Mr. Golden from the state of Maine for 5 minutes. Mr. GOLDEN. Thank you. Mr. Clark, the lobster fishery in Maine has a lot of federal regulations coming at it. I know we have worked with your office on a few relevant to 57:41xx whales, which by the way just recently a federal Appeals Court ruled that those regulations were based on flawed data and could lead to hundreds of thousands of jobs being lost in Maine. And so that was good news for the Main lobster fishery. I wanted to talk a little bit about offshore wind. So BOEM has published guidance on mitigating the impacts of offshore wind energy on fisheries, yet the Bureau is not required to do an RFA analysis. That being said, you filed public policy on BOEM's guidance and in the comments you said that BOEM must conduct an RFA analysis in its draft environmental assessments and environmental impact statements to ensure the agency, as well as developers, properly consider the impacts offshore wind development projects on small businesses. Can you talk a little bit about why you feel strongly that that is very important? Mr. CLARK. Yes. We have, over the short period of time, had conversations with small businesses regarding this offshore situation. And there are businesses that are concerned that their businesses are going to be adversely harmed by the process. And there are other businesses that clearly see some opportunity for benefit from the process. So we think that the most efficient way for the agency to do this analysis is to do an RFA analysis to determine what the impacts may be. We have a lot of businesses that are adjacent to the shore and to the shoreline and so forth that feel they are going to be adversely harmed by the development of the offshore wind, while others feel that it may be an opportunity for them to develop a business but---- Mr. GOLDEN. Do you know, sir, if BOEM has started to perform an RFA analysis or have they committed to you to do one in the future? Mr. CLARK. They have not yet committed to us but I think we submitted a letter last week to them requesting that this be done. Mr. GOLDEN. Good. Thank you. In your comment to BOEM you said that small businesses can be significantly impacted by offshore development projects. Why is it that BOEM is going forward with leases right now prior to finalizing the rule on mitigating these impacts? Mr. CLARK. I cannot address why they are going forward with it right at this moment. Mr. GOLDEN. Do you have concerns that they are? Mr. CLARK. Yes. I mean, again, the concern is that we have small businesses that are what I would characterize as caught in the crosswinds of this whole process. And those small businesses need to better understand exactly what the parameters are for this process so that they can adjust, if necessary, their business model and so forth to better participate. These businesses, many of them, all of them, really, are the economic backbone of that whole process. So we need to make sure that they are adequately protected as much as possible. Mr. GOLDEN. Does your office pretty much exclusively just comment on concerns being raised by small businesses or do you ever propose steps that could be taken by federal agencies to mitigate their impacts of their regulations? Mr. CLARK. Our office, we will comment on the proposed regulation and we will give the agency the assessments that we have received from our stakeholders as we have held roundtables and other types of listening sessions. And where appropriate, we will try to work with the agency in terms of analyzing data that may be available to give a different or better impact assessment. Mr. GOLDEN. Well, I know one thing, that the lobster fishery, and these are all small businesses as you know, is seeking in Maine exclusion zones which would ensure that their fishing grounds are not impacted by offshore wind. I do not know if you have seen any of those proposals yet but I am sure you will be hearing more about it in the weeks and months ahead and it is something we would love to be in a conversation with your office about. Mr. CLARK. Yeah. I have not seen a proposal but I am sure the attorney that is working on those areas is very much involved in that process. Ms. SALAZAR. Thank you. Now I recognize Mr. Stauber from Minnesota, for 5 minutes. Mr. STAUBER. Thank you, Madam Chair. On April 27, 2022, Small Business Administrator Guzman testified in front of this House Small Business Committee that she was ``not familiar'' with the Small Business Regulatory Enforcement Fairness Act, also known as SBREFA. I am ever wary of the regulatory burden imposed upon small businesses. As part of the Committee's ongoing work to conduct oversight of small business concerns, it is important that we ensure this gap of knowledge on the federal regulatory process does not extend beyond the administrator and that our small businesses are being duly considered by other federal agencies. However, what I fear is that it is not a lack of knowledge that is keeping the concerns of small businesses out of consideration and federal agency rulemakings but rather an honest contempt held for main street by this administration. As an example, almost $300 billion, that is with a B, $300 billion of additional regulations on our small businesses and farmers by this administration in just 2-1/2 years. Now to my question. EPA recently proposed greenhouse gas regulations that would require existing coal and natural gas power plants and new natural gas power plants to install carbon capture or coal fire hydrogen. Many small entity electric utilities, notably electric cooperatives and public power utilities, which are prevalent in the district that I represent, will continue to rely upon coal and natural gas, including new construction of natural gas units to maintain reliability and affordability. Major Clark, has the SBA Office of Advocacy been asked to weigh in on the estimated impact of EPA's proposed greenhouse regulations on these small utilities? Mr. CLARK. I think the attorney that represents that area has been working with EPA in that area. I do believe that we actually have been following that. I do not have all of the specific details. I would be happy to provide those to you. But we are very much aware of the impact greenhouse gas is having and will have in terms of those regulations. Mr. STAUBER. Would you agree that those regulations, the additional regulations applied would cost the citizens who consume that energy more money? Mr. CLARK. Without having the data available in front of me that is one of the areas that we would have to look at in terms of what the additional cost, if any, would be in that process. And that is part of what we do in the Office of Advocacy is to try to weigh the costs of these proposed regulations. Mr. STAUBER. Does the Office of Advocacy plan to engage on this rulemaking particularly during the current open comment period? Mr. CLARK. Yes. Mr. STAUBER. Okay. Would you be able to give this Committee the results of that when it is completed? Mr. CLARK. I would be happy to. All of our public comment letters are filed and I do think we submit our public comment letters to this Committee but we would be happy to do that. Mr. STAUBER. Thank you. Unfortunately, I believe the EPA has come to the inaccurate conclusion and improperly certified this rulemaking by determining it would not have a ``significant economic impact on a substantial number of small entities.'' I have heard from electric coops and public power utilities that this proposed rule will, in fact, have a significant impact on their operations and on the communities they serve. I encourage the Office of Advocacy to officially weigh in on these proposals. And I will work with you and my colleagues to hold the agencies accountable and ensure their compliance with RFA and SBREFA. And with that I appreciate your time here, Major Clark. And thank you for your service. And Madam Chair, I yield back. Mr. CLARK. And we look forward to working with you on that. Thank you. Ms. SALAZAR. Thank you. And now I recognize Mr. Mfume from Maryland for 5 minutes. Mr. MFUME. Thank you very much, Madam Chair. Mr. Clark, good to see you. Allow me a point of personal privilege, Madam Chair, and to be a little bit redundant. You heard earlier in Mr. Clark's introduction by the Chair that he was the staff director to this Committee back in the 1980s. Chaired, the Committee was, by my predecessor, whose portrait is on the wall down there, Congressman Perrin Mitchell of Maryland. And although Mr. Clark is being a little modest right now, the truth of the matter is he was one of the most respected Members of any staff on the Hill in those days, almost, and I do not want you to blush, but almost legendary. And for those of us who had a chance to know him and to watch the level and the quality of his work for this Committee, it just stays with us. I got on the Committee when I got here in 1987. Mr. Clark was serving, as I said, for my predecessor. Ronald Reagan was president. We were all younger men then, including Ronald Reagan. And I have had an opportunity over the years to kind of hear about him and hear about him. But it is an opportunity today for me to see you and to say thank you, again, for all of your work. We do not want things like that to sort of fade away, and I say that primarily for the staff that works this Committee today. It is a good opportunity to do good things and to go a long, long way. One of the things, Mr. Clark, I would like to do quickly is to get our opinion on antitrust regulations and how they are impacting businesses. We know that the Sherman Antitrust Act, the Federal Trade Communications Antitrust Act and Clayton Antitrust Act are the three real pillars that were put in place legislatively to help protect small businesses from the sort of antitrust things that we have seen. We all on this Committee know that small businesses are challenged with a lot of different things, not the least of which is the lack of access to capital, the lack of access to credit. That was the case 40 years ago. It is still, unfortunately, the case today. And those businesses today, like then, need every tool possible I think to be able to fight back. Now, one of the biggest threats is market consolidation. So give lack of access to capital, lack of access to credit, antitrust needs and protections, market consolidation is really, in my opinion, something that we have got to make sure that we do not take our eye off of. And so whether it is controlling trusts that exist out here, and there are a number of controlling trusts, monopolies, price fixing, things of that nature make it very, very difficult. And then over all of that we have the notion of mergers and acquisitions that consolidate power in the hands of a few big corporate companies that are swallowing up market share repeatedly and almost out of control. So if you could take a few moments, and we do have a few moments, for you to sort of give us your thoughts on all of this and tell us how Advocacy is working with the FTC on antitrust issues and on the other issues that I have talked about. That would be very sufficient and I would appreciate your thoughts. Mr. CLARK. Thank you for your question. The merger and acquisition and consolidation of all of these things impact small businesses in many ways that you talked about. But one of the most specific impacts is with the supply chain. Small businesses rely very much on the ability to get their products from manufacturers, from wholesalers, and others and put them into the supply chain. And when we have these mergers and acquisitions, many times those supply chains are directly impacted and the relationships that many small businesses may have with those supply chains are directly impacted. If I may share with you an example. When I was out in the private sector we were involved in IT service and there were a couple of mergers and acquisitions that directly impacted our ability to get product that we were getting before to our customers. Some at point in time were the federal government. So when we look at this whole issue, one of the things that we have to be concerned with is what does this actually do to the 99 percent small businesses that we have in the United States. And the more they are squeezed in terms of their ability to provide product to the consumer, provide product to their customers, the worse off the economy is in terms of that whole process. Mr. MEUSER. And speaking of being a squeeze, do you have any idea conceptually of to what extent the percentage of small businesses are being squeezed and ultimately put out of business because of these larger controlling interests that take over as a result of an acquisition or merger? Mr. CLARK. I do not have firsthand data at my fingertips on that. That is something that we would be happy to look at to see what the impact is as it relates to small business. But it is the mergers. It is the cost of money that many of these small businesses have to incur. And the increase in cost of money that occurs as a result of the acquisitions and mergers. So we will be happy to look at that and get back to the Committee on that. Mr. MEUSER. And if you could provide that. And if I may ask unanimous, Madam Chair, just for 10 other seconds, if you could also, as a subgrouping or title of that, let us know what that effect is on minority business enterprise also that would be good. Mr. CLARK. Yes, I will. Mr. MEUSER. Thank you. Ms. SALAZAR. Now I recognize Mr. Landsman from Ohio for 5 minutes. Mr. LANDSMAN. Thank you, Madam Chair. Mr. Clark, thank you for being here. I appreciate all the work that you have done. Incredible career. I am sure you have done this so many times that this is easy but I suspect that testifying in front of a Congressional Committee is not always the most fun, so we do appreciate you coming today and being part of this conversation. My questions are really around what outreach looks like. For context, I think we oftentimes offer incredible services or we have really important information where we trip up. And this is government, business, elected officials. We get tripped up on the outreach piece. I think we are struggling, even with social media, to figure out exactly how best to reach people. And so I am really curious about how you approach that generally. But in particular, and this is my second question is around childcare. I am a huge, huge believer in the role that childcare plays in our economy. They are almost all small businesses. Most of the time, at least in my city, these are black-owned businesses and they get left out of the conversation in terms of small businesses even though they are a small business providing incredible support to small businesses. So I am curious about the outreach to childcare providers. And then you all do economic reports, and I may be describing that wrong, but economic research report. And I am wondering if you have one or would be willing to do one on childcare as we try to learn more about how to best engage them generally as it relates to rulemaking, how these rules affect them but bigger picture, just how we engage them so that they are part of that small business ecosystem. Mr. CLARK. Congressman, thank you for your question. And yes, we would be happy to look at the possibility of doing an economic report, research report on child care. I do not know what the data field looks like that is out there but we would look at the data field and try to put together this type of report. But we have over the period of time been involved with childcare facilities and working with childcare companies in terms of the excellent job that they do in terms of protecting our children, working and caring for our children while we are out trying to make a living for the family. Three years ago when we were in Atlanta for a regional roundtable we attended or participated and we had a childcare facility participate in two roundtables that we had during that period of time showing us exactly what they do, how they do it, and sharing with us some of the issues that they were experiencing in child care. So we are aware of some of those issues. We will continue to look at the issue of childcare research report and see exactly what's there that we can provide that makes good sense in terms of an economic research report. Mr. LANDSMAN. Thank you. And again, I appreciate your service. Everything you do. Being here today. Madam Chair, I yield back. Ms. SALAZAR. Thank you. Now we recognize Mr. Thanedar from Michigan for 5 minutes. Mr. THANEDAR. Thank you, Madam Chair. And Mr. Clark, thank you for all your good service. As a small business owner and entrepreneur, I personally wrote a grant for small business innovation research. I know you worked with SBIR in the past. And I won an award that helped me with my small business. I do recognize, you know, the small businesses in my district, I represent Detroit and the downriver communities and the small businesses are struggling with inflation, trying to acquire enough customer base, keep the revenues up so they can keep the payroll and hopefully have a little bit of money left over for their own personal use or investing in their small businesses. I want smart regulation. I want regulations that help in safety and help in health and safety issues. I want regulations that help protect workers and protect workers' rights. So there is good rulemaking and there is bad rulemaking. Sometimes the rules are so complex that the little shops, mom and pop shops do not have the time to go through all this maze of requirements and the time commitment that they have to put. My question to you is how can we ensure that there is less paperwork, less work on the part of the business owner to deal with this? How do we communicate these changes in rules? People are so busy running their small businesses and do not have the time to find out all about it. How do we train them? How do we communicate with them? How do we help them to deal with these changes? And how does that affect also many of the Black and Brown business owners in my district? Mr. CLARK. Well, again, one of the things that we attempt to do is to do outreach. And in doing outreach, what we are trying to do is to, and what we do, we are not just trying, but what we do is to try to convey to the small businesses what the proposed regulation is designed to do. And in that regard what we then seek from that small business is some input as to how that will impact them. So if we look at, for example, things like the amount of time that it takes to perform a particular task that the regulation is calling for. And if the agency has underestimated that time and the small business tells us, well, it takes 2 hours longer than what the agency has proposed, then we share that with that agency and we put a cost factor to that particular situation. So what we attempt to do, again, is to bring that information to the agency because, again, a regulation, the agency will sometimes look at a regulation as one size fitting all. But regulations have a different impact on the different size of businesses and therefore, we are very concerned with that one, two, three, four-person shop where that regulation of compliance may cost a larger business only $5 to comply but that small business has to pay $100 just to be in compliance. So those are some of the things that we look at in terms of the cost of regulation and what's necessary for compliance. Mr. THANEDAR. You know, thank you so much for that. Recently, I have been starting AI, the artificial intelligence technology and I have seen some really interesting applications of that. Can such technology or similar technology can be used to make it easier, quicker for small businesses to be able to respond to these regulations? Mr. CLARK. Well, I, too, have looked at AI, and I think the answer probably to your question is yes. But I think we have to be very, very careful with AI, as we have to be careful with any technology because the misapplication of that technology can have a worse impact on that small business than what we are looking at. So we have to look at the aspects of that and what is really required and so forth and that is something that we are just doing now. Mr. THANEDAR. I yield back, Madam Chair. Ms. SALAZAR. Thank you. And now I recognize Ms. Chu from California for 5 minutes. Ms. CHU. Thank you. Mr. Clark, I want to commend you and the SBA Office of Advocacy for your important work ensuring federal agencies hear and consider the needs of small businesses when developing federal regulations. However, we know that the smallest and most underserved businesses such as sole proprietors, minority, or women-owned businesses and firms in low-income areas are often hard to reach and less likely to have the resources to advocate for themselves the way larger businesses do. That is why I am so glad to hear that Advocacy is continuing post-pandemic to do your roundtables online which you note has led to greater participation by businesses than in the past would have gone unnoticed or would have been unable to travel to D.C. to participate. So I would like to hear more about specifically what your office is doing to ensure that you are finding and hearing the voices of the most underserved businesses. When Advocacy plans these virtual roundtables and engages in other forms of outreach to small businesses, how are you ensuring that the smallest and most underserved small businesses are being reached like what I said--sole proprietors, minority- or women- owned businesses, firms in low income areas, or limited English-proficient businesses? Mr. CLARK. Thank you very much. One of the things we do, we utilize very extensively our regional advocates that are assigned to each region and to the various states that they operate within. But in addition to the regional advocates, we actually attempt to go to the local community and try to engage the local leadership in our attempt to reach out to the businesses within their jurisdiction. So we clearly are aware that different groups have different levels of activity and different interests, so we try to reach out to those local organizations that are there to ensure that they can get their membership to participate in the hearings, in the roundtables, and so forth. Ms. CHU. How about on the limited proficient English front? Mr. CLARK. I'm sorry? Ms. CHU. Limited English proficient, like those who are monolingual in other languages? Mr. CLARK. We utilize multiple languages to reach out to the various communities that we are trying to reach out to. And we are not specific to any one specific language. We recognize that there are multiple groups out here with different languages and so forth. We have gone to Alaska reaching out to the different groups there and other places. Ms. CHU. Okay. Mr. Clark, I understand that only a few federal agencies are required to conduct Small Business Regulatory Enforcement Fairness Act panels (SBREFA) which convene agency officials, the SBA Office of Advocacy and Small Businesses together to discuss the impact of a proposed rulemaking on small businesses and to make recommendations. Can you discuss the process by which small businesses are identified for participation in these SBREFA panels? Specifically, are there mechanisms that you use to ensure the participation of underserved firms like what I have talked about--sole proprietors, minority- and women-owned, those in low-income areas, limited English-proficient businesses? Mr. CLARK. Yes. Each of the agencies that are required to do a SBREFA panel has a different type of process of reaching out to the various communities. But one of the things that we are required to do with the agency and with OIRA is to ensure that the representation on the panels is adequate representation. And we will provide the agency in many of those situations with names of potential small businesses to participate on those panels. Ms. CHU. Do you track the participation of those that are in these underrepresented categories? Mr. CLARK. We track in terms of the types of issues that the agency is looking at in terms of those categories. Yes. We try to get a balanced participation of individuals from the small business community on the panels. Ms. CHU. Thank you. I yield back. Ms. SALAZAR. Mr. Clark, thank you for your presence here today and we, as the Committee, we appreciate the work that you do as an independent voice and advocate for small businesses across the country. You have an impressive resume as other Members have explained that highlight a long career both in the public sector and the private sector working with small businesses and the issues that affect them. So again, thank you for your time and for your service to the country. So I would like to thank once again the witness. And without objection, Members have 5 legislative days to submit additional materials and written questions for the witness to the Chair which will be forwarded to the witness. I will ask the witness to please respond promptly. If there is no further business, without objection the Committee is adjourned. Thanks again. Mr. CLARK. Thank you. [Whereupon, at 11:27 a.m., the committee was adjourned.] A P P E N D I X [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] [all]