[House Hearing, 118 Congress] [From the U.S. Government Publishing Office] ORGANIZATIONAL MEETING ======================================================================= HEARING BEFORE THE COMMITTEE ON SMALL BUSINESS UNITED STATES HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTEENTH CONGRESS FIRST SESSION __________ HEARING HELD FEBRUARY 8, 2023 __________ [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] Small Business Committee Document Number 118-001 Available via the GPO Website: www.govinfo.gov __________ U.S. GOVERNMENT PUBLISHING OFFICE 51-184 WASHINGTON : 2023 ----------------------------------------------------------------------------------- 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 JACK 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 Page Hon. Roger Williams.............................................. 1 Hon. Nydia Velazquez............................................. 2 APPENDIX Additional Material Submitted for the record: Rules and Procedures......................................... 8 Authorization and Oversight Plan............................. 25 ORGANIZATIONAL MEETING ---------- WEDNESDAY, FEBRUARY 8, 2023 House of Representatives, Committee on Small Business, Washington, DC. The Committee met, pursuant to call, at 3:31 p.m., in Room 2360, Rayburn House Office Building, Hon. Roger Williams [Chairman of the Committee] presiding. Present: Representatives Williams, Luetkemeyer, Stauber, Meuser, Salazar, Ellzey, Molinaro, Alford, Crane, Bean, LaLota, Velazquez, Mfume, Phillips, Landsman, McGarvey, Gluesenkamp Perez, Scholten, Thanedar, Davids, and Pappas. Chairman WILLIAMS. Good afternoon, everybody. We are going to get started. And let me just say before we get started, as we start our next hearings that we have coming up, we are going to be saying the Pledge of Allegiance and a short blessing, just like we do on the House floor. And so, if any of our colleagues on either side of the aisle are interested in leading the Pledge or blessing for a hearing, let my office know. We will get you on the schedule. So let us begin. The Committee will now come to order, and without objection, the Chair is authorized to declare a recess of the Committee at any time. I want to welcome all our Members, both returning and new, to the organizational meeting of the Committee on Small Business for the 118th Congress. This meeting will proceed as follows. First, Ranking Member Velazquez and I will introduce our Members on each side. Then we will introduce and officially approve our Subcommittee Chairs. Next, we will officially adopt our Committee rules. And finally, we will officially adopt our Committee's authorization and oversight plan. I want to take a moment to recognize Ranking Member Velazquez. As you said last year, Ms. Velazquez, small business deserve our partnership. And I look forward to working together to make the small business in this nation better and more prosperous. And I think we will find out we have much more in common than we don't. As a small business owner myself, I know firsthand the hardship many small businesses face every single day. As Chairman, I hope we can come together, conduct meaningful oversight of the many problems in the SBA during the COVID-19 pandemic and of the overburdensome regulations coming out of the Biden administration. Now, before I introduce our new Members, I want to welcome back Congressman Blaine Luetkemeyer from Missouri, who will serve as the Vice Chair of this Congress. I was his Vice Ranking Member last year, and I look forward to continuing to work together to make America the greatest country in the world and the best place to do business. So now I want to introduce the new Majority Members of this Committee. First, Congressman Tracey Mann from Kansas, Congressman Jake Ellzey from Texas, Congressman Marc Molinaro from New York, Congressman Mark Alford from Missouri, Congressman Eli Crane from Arizona, Congressman Aaron Bean from Florida, Congressman Wesley Hunt from Texas, and Congressman Nick LaLota from New York. I also want to welcome back our Members returning to the Committee: Congressman Pete Stauber from Minnesota, who is serving his third term in Congress and served on two of our Subcommittees last Congress; Congressman Dan Meuser from Pennsylvania, who was our Ranking Member of the Subcommittee on Economic Growth, Tax, and Capital Access last Congress; Congresswoman Beth Van Duyne from Texas, who served as our Ranking Member for the Subcommittee on Oversight, Investigations, and Regulations last Congress; and finally, Congresswoman Maria Salazar from Florida, who served as our Ranking Member for the Subcommittee on Contracting Infrastructure last Congress. I am excited to have you all join us for the 118th, and I am looking forward to all we will accomplish together as we move forward. So with that, I will yield to our distinguished Ranking Member from New York, Ms. Velazquez. Ms. VELAZQUEZ. Thank you, Chairman Williams, and congratulations on your new role. Small businesses make vital contributions to our economy. Not only do they generate two out of the three net jobs, but they drive innovation and economic progress throughout our country. However, the past few years have not been easy for small businesses. The pandemic brought challenges that were unthinkable a short time ago. Perseverance, combined with the historic investment in economic recovery, helped millions of small firms stay afloat. Since January 2021, there has been over 10.5 million applications for new businesses. In January 2022, we smashed economic growth expectations with the addition of more than 500,000 new jobs--but our work is not done. Looking ahead, we must work together on this Committee to make sure small businesses are given the resources and protections they need to prosper. I hope we can continue our bipartisan tradition during the 118th Congress and show our constituents and new Members what it is like to make real change happen. I now would like to welcome our new and returning Members and take a moment to introduce the Democratic Members on our side. Let me begin with the newest Members of our Committee. First is Mr. Greg Landsman of Ohio. He is a former public school teacher and faith-based nonprofit leader who served five terms on the Cincinnati City Council before being elected to Congress. As someone with deep community connections, he will be a vital resource to our efforts to strengthen our nation's main street. Our next freshman Member is Mr. Morgan McGarvey, an attorney from Louisville, Kentucky, with a history and track record of representing the interests of small businesses. His passion for serving his community led him to run for Kentucky State Senate in 2012, where he became the minority leader by 2018. His leadership, legislative experience, and work ethic will be invaluable to this Committee. I would also like to introduce Ms. Marie Gluesenkamp Perez, a working mother and small business owner from Southwest Washington. She started her auto repair and machine shop with her husband, Dean, with the help of an SBA loan. Her experience with SBA and running her own business is exactly the type of knowledge we need on the Committee. Next are two Members from Michigan. First, Ms. Hillary Scholten, an attorney who clerked with the U.S. Court of Appeals for the Second Circuit in a special unit focused on immigration. She is a proven leader that is committed to finding common sense solutions. Secondly, Mr. Shri Thanedar, who immigrated to the U.S. at age 24 with $20. Discovering a passion for entrepreneurship, he started several small businesses, and his success with the SBIR program will be an asset to this Committee. Last but not least is Mr. Chris Pappas of New Hampshire, who helps run his family's 100-year-old restaurant. As a third- term Member of Congress, he serves on the Committee on Transportation and Infrastructure and Committee on Veterans Affairs. I would also like to welcome back some excellent Members from last Congress: Jared Golden from Maine, Kweisi Mfume from Maryland, Dean Phillips of Minnesota, Judy Chu from California, and Sharice Davids of Kansas. Thank you and I yield back. Chairman WILLIAMS. Thank you. And I want to also welcome, of course, all the new Committee to the Republican side and all the Democratic side. Look forward to working with all of you. Thank you. And thank you, Ranking Member, for that. Now, I would like to introduce our five Subcommittee Chairs on the majority side. Congressman Dan Meuser will Chair the Subcommittee on Economic Growth, Tax, and Capital Access. Congresswoman Beth Van Duyne will Chair the Subcommittee on Oversight, Investigations, and Regulations. Congressman Wesley Hunt will Chair the Subcommittee on Rural Development, Energy, and Supply Chains. And Congressman Nick LaLota will Chair the Subcommittee on Contracting and Infrastructure. Congressman Marc Molinaro will Chair the Subcommittee on Innovation, Entrepreneurship, and Workforce Development. So, I want to thank all of you for your willingness to serve in that capacity. And now I yield to Ranking Member Velazquez to introduce the Ranking Members of the Subcommittees. Ms. VELAZQUEZ. Thank you, Mr. Williams. I would like to congratulate the Committee Chairs and Ranking Members. We have had some bright, dynamic Members join our Committee, and I am confident this will be a productive session. The full Committee Vice Ranking Member will be Dean Phillips. Kweisi Mfume will be the Ranking Member of the Subcommittee on Oversight, Investigations, and Regulations. Greg Landsman will be the Ranking Member of the Subcommittee on Economic Growth, Tax, and Capital Access. Morgan McGarvey will be the Ranking Member of the Subcommittee on Innovation, Entrepreneurship, and Workforce Development. Marie Gluesenkamp Perez will be the Ranking Member of the Subcommittee on Rural Development, Energy, and Supply Chains. Hilary Scholten will be the Ranking Member of the Subcommittee on Contracting and Infrastructure. Chairman WILLIAMS. All right, thank you very much. And I move that the list of Subcommittee Chairs and Ranking Members and as set forth in the rosters be approved. All those in favor, say aye. All those opposed, say no. In the opinion of the Chair, the ayes have it, and the Chairs and Ranking Members are appointed. Without objection, the motion to reconsider is laid on the table. I would like to now proceed to the Committee rules package. Pursuant to clause 2A of House Rule XI, the first order of business is adoption of the Committee's Rules of Procedure for the 118th Congress. A copy of the proposed rules has been distributed to each of you in advance. Now, the rules package is nearly the same as last Congress, with a few minor changes. For instance, the name and jurisdiction of some of the Subcommittees have been modified to better address the problems facing small business in today's economy. We clarified the procedure for deposition and subpoenas to align with the House rules. We added language to remove remote proceedings to align with the House rules and to ensure that we are here in person, working hard for the American people. And I think these changes will allow us to propel this Committee forward to the benefit of small businesses nationwide. So I now recognize Ranking Member Velazquez for her remarks on the rules. Ms. VELAZQUEZ. Thank you, Mr. Chairman. Our Committee's rules are not only a vital institutional requirement, but they also set clear parameters for how we operate. More importantly, they contain protections, ensuring that all points of view are considered. It is important for Members on both sides of the aisle to note that, with a few exceptions, these rules are very similar to those of previous Congresses. With that said, I will be remiss if I didn't mention my concern over the new rule to grant the Chairman of the Committee unilateral subpoena authority. While I recognize this change is in line with House rules, our Committee has always required either a majority vote of the Committee or an agreement between the Chair and Ranking Member before the Committee issues a subpoena. Under the new rules, the Chairman has unilateral authority to issue a subpoena with no debate. Subpoenas should be a measure of last resort to prevent bringing important work to aid small businesses to a halt. I expressed these concerns to the Chairman, and we reached an agreement to require 24-hour notification to the minority before issuing a subpoena. Mr. Chairman, I appreciate your understanding and respect for honoring the minority's rights and, most importantly, of this Committee's bipartisanship and bipartisan history. Throughout my tenure on the Committee, we have conducted bipartisan oversight to hold the SBA to the highest standards, no matter if we were analyzing regular SBA programs or the COVID response programs. I look forward to our continued efforts in this area, and it is my hope that we will work together if a subpoena is to be issued. A Committee that is run openly and fairly is a Committee that works and can best achieve its objective. I yield back, Mr. Chairman. Chairman WILLIAMS. Thank you, Ms. Velazquez. And without objection, the draft Committee rules are considered as read and open for amendment at any point. Does any Member who wish to be recognized to offer amendments to the proposed Committee rules? Okay. If not, I move the proposed rules be adopted as the rules of the Committee on Small Business for the 118th Congress. All those in favor, say aye. All those opposed, say no. In the opinion of the Chair, the ayes have it, and the proposed rules are adopted. Now, without objection, the motion to reconsider is laid on the table. Pursuant to House rules, the rules adopted by the Committee on Small Business for 118th Congress will be published in the Congressional Record and made available to Members and the public on the Committee's website. Now, the next order of business before the Committee is the adoption of our Authorization Oversight Plan for the 118th Congress. House rule X, clause 2D, directs each standing Committee to no later than March 1 of the first session of a Congress in a meeting that is open to the public adopt its Authorization and Oversight Plan for that Congress. As required by the rules our plan includes descriptions of each program or agency that is intended to be authorized in the current Congress or the next Congress, and description of oversight to support reauthorization in the current Congress. In addition, the plan includes recommendations for removing any such programs or agencies from mandatory to discretionary funding. The Committee may consider reforms and improvements to various SBA programs as noted throughout this Authorization and Oversight Plan. The Committee's Authorization and Oversight Plan for the 118th Congress was compiled with input from the Ranking Minority Member and has been made available in advance to all Members. So, now I have recognized myself for 5 minutes to discuss the plan for this Congress. As a lifelong small business owner, I know firsthand how often the smallest changes in Washington, D.C., can have a disastrous impact on small businesses across America. Over the last 2 years, overburdensome regulations have harmed small businesses. As Chairman, I intend to focus this Committee's attention on resources, conducting rigorous oversight of costly regulatory burdens that are harming small businesses. Members of this Committee will be fierce advocates for free market principles and pro growth policies. We will work to highlight the American Dream and the many success stories of small business owners around the country with entrepreneurs and innovators from all corners of this country. We will hear from small business owners across the nation who are on the front lines of innovation and job creation, and we will investigate ways the Small Business Administration could improve the landscape for small business. We will investigate agencies' rulemaking process and work to ensure that the interests of small businesses are properly considered. We will work to remove excessive and burdensome regulations to make it easier for small businesses not only to form, but to stay in business and to grow. And we will amplify the voice of small business in Washington, D.C. I know my colleagues on both sides of the aisle are eager to get to work on behalf of main street America. With that, I yield to Distinguished Ranking Member Velazquez for 5 minutes for any remarks she may wish to make on the Oversight and Authorization Plan. Ms. VELAZQUEZ. Thank you, Chairman Williams. The Oversight Plan sets forth a policy framework for our work this Congress. Like in previous years, the plan calls for the robust oversight of the SBA and other federal small business initiatives, a long tradition that this Committee takes seriously. To that end, this Committee has forged a bipartisan consensus opposing the creation of unauthorized pilot programs. Diverting scarce taxpayers' dollars away from proven programs can open the door to fraud, waste, and abuse, something we are all working to minimize. On the other hand, this Committee has steadfastly supported statutorily authorized programs, including the Entrepreneurial Development Programs that offer free or low-cost counseling and training to small businesses. Lending programs help small businesses access affordable capital and contracting programs that help small businesses compete in the federal marketplace. In the past two Congresses, we held numerous hearings with GAO and the Office of the Inspector General and made it clear that safeguarding taxpayers' dollars was our top priority. In fact, our oversight efforts increased last Congress, primarily in an effort to work with the IG and DOJ to hold bad actors accountable for fraud in COVID programs. In that vein, we enacted two bills that gave the DOJ and other investigative agencies additional time to prosecute fraud in the PPP and COVID EIDL programs. These laws were the product of the robust bipartisan oversight conducted by our Committee. Additionally, regulatory burden is an important issue for small businesses, and we must continue our work in this area. We need to understand how we can make the regulatory process friendlier to small businesses without undermining essential safeguards that many of these rules provide. I hope to work with my colleagues to review SBA rules, particularly the lending rules, to lift the 40-year moratorium on licensing new small business lending companies to participate in the 7A program. I have urged SBA to exercise caution in making substantial changes to this successful program and to take the time to review the issues and comments to the rule. I am fully committed to working with the agency and the new majority to protect the integrity of all SBA programs and ensure they serve small business owners as efficiently and effectively as possible. With that, I urge Members to approve this oversight plan and I get back. Chairman WILLIAMS. Thank you, Ranking Member. And as noted, the proposed Authorization Oversight Plan has been distributed to Members in advance. Now, without objection, the plan is considered as read and open for amendment at any point. Does any Member wish to be recognized to discuss the draft Authorization and Oversight Plan? Okay. Are there any amendments? All right. If not, I move the Authorization and Oversight Plan of the Committee on Small Business for the 118th Congress be adopted. All those in favor, say aye. All those opposed, say no. In the opinion of the Chair, the ayes have it, and the plan is adopted. Now, without objection, the motion to reconsider is laid on the table. As directed by House rule X the Authorization and Oversight Plan will be submitted simultaneously to the Committee on Oversight and Accountability and the Committee on House Administration, who will compile and report the plan submitted by the standing Committees to the House no later than April 1. So, this concludes today's business meeting. And I just want to say, this will be a fun Committee. We are going to get a lot of things done, and we are really going to help small business and create jobs and see a lot of results. So, without objection, Committee staff is authorized to make technical and conforming changes to reflect the action of the Committee in adopting the resolution embodying our rules. So, without objection, the Committee stands adjourned. Ms. VELAZQUEZ. Thank you. Chairman WILLIAMS. Thank you. [Whereupon, 3:51 p.m., the Committee was adjourned.] A P P E N D I X [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] [all]