House Passes Energy Efficiency Package; Small Business Committee Bill Included to Support Innovations in the Energy Sector

Yesterday, the U.S. House passed H.R. 3221, the New Direction for Energy Independence, National Security and Consumer Protection Act, legislation that provides incentives for the production of clean energy, aids our nation’s farmers in producing the next generation of America’s fuel, and supports energy efficient technology. It also creates an environment for creating jobs, stimulating the economy and helping small businesses.

The historic legislation includes a number of measures that had passed through the House Small Business Committee in May to help entrepreneurs cope with rising energy costs, become more resourceful in their usage, and continue developing new technologies.

“This is a major step forward for improving our environment and helping this nation’s small businesses to lead the way in that charge,” said Chairwoman Nydia Velázquez [D-N.Y.]. “This legislation includes critical provisions that will empower entrepreneurs to create a more eco-friendly environment, and help achieve the overall goals of H.R. 3221 to spur investment in biofuels, new energy technologies, innovation and job creation.”

Small businesses have been particularly affected by the rising cost of fuel, as any additional expense is more difficult for them to absorb than their corporate counterparts. According to a survey conducted by the National Small Business Association [NSBA], over 60 percent of small businesses use vehicles on a daily basis, and a majority of those who use vehicles travel more than 50 miles a day. This has forced many entrepreneurs to consider scaling back their daily operations and reducing their staff in an effort to save money.

“The rising cost of energy has hit small businesses hard,” Chairwoman Velázquez noted. “This bill focuses not only on supply, but it also focuses on usage. These two factors are key in helping small businesses to manage increasing energy prices, and in becoming more resourceful.”

A critical piece of the New Direction for Energy Independence, National Security and Consumer Protection Act, is H.R. 2389, the Small Energy Efficient Business Act [SEEBA], introduced by Subcommittee Chairman, Rep. Heath Shuler [D-N.C., pictured above], and approved by the full House Small Business Committee this spring. The bill provides loans, education and investment to small firms to help them become more energy independent, thereby helping them take advantage of their role as leaders in the search for solutions.

H.R. 2389 also promotes good energy practices by modifying existing Small Business Administration [SBA] programs to provide more flexible loan terms to small firms that are developing or utilizing new technologies.

SEEBA stimulates investment in the production of alternative sources and product development by expanding the Small Business Investment Companies [SBICs]. The SBA will be required to develop a strategy to educate small firms about being resourceful, and establishes an educational program for the Small Business Development Centers [SBDCs]. Additionally, the Renewable Fuel Capital Investment Program [RFCIP] will be created, which will help small firms develop renewable energy sources. These measures will play a vital role in the reaching the goals of H.R. 3221.

“Small businesses are leaders in developing new technologies to spur efficiency, and under H.R. 3221, entrepreneurs will be able to continue on that path,” said Chairwoman Velázquez. “The Small Energy Efficiency Business Act will give the support needed to foster these types of advances, while also encouraging innovation and job creation. I am proud that this legislation is a vital component of the monumental energy package that the House has passed today.”

Sources: Congressional Budget Office, GovTrack.us, U.S. House Small Business Committee, WashingtonWatch.com
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Committee Seeks to Strengthen Key Initiatives for Sustained Economic Development

In many underserved neighborhoods, small businesses are an important engine of growth and revitalization, bringing much needed jobs and commerce. Oftentimes, the individuals wishing to start these businesses have difficulty securing adequate finances, leaving their aspirations stalled in the planning phase.

Today, the House Committee on Small Business examined two key initiatives that support economic revitalization in some of these disadvantaged communities: 1] the Microloan Program, and 2] the Program for Investment in Micro-Enterprise [PRIME] -- both of which fall under the purview of the Small Business Administration [SBA].

"There are many budding entrepreneurs who strive to open their own business, but due to a lack of experience or limited credit history, cannot secure capital," said Nydia M. Velázquez, committee chairwoman. "The microloan and PRIME programs have been instrumental in turning their dreams into reality."

Since its inception in 1994, the microloan program has provided credit to more than 700,000 small firms -- many headed by women, minorities and others who are facing challenges getting their ventures off the ground. These businesses have helped bring economic growth to areas where it is desperately needed, creating or retaining about 10,000 jobs in 2006, according to the SBA.

With a default rate of less than two percent, these investments have not only increased prosperity, but have done so while maintaining a better repayment record than traditional loans made by commercial lenders.

"These programs have been vital in moving people not just from welfare to work, but from welfare to business ownership -- an amazing accomplishment," Chairwoman Velázquez noted.

Despite this record of success, the Bush administration has proposed to eliminate the microloan program each year for the past four years. In its latest budget request, it has recommended increasing the cost of the loans for the borrowers, and to completely eliminate PRIME. At the hearing, members rejected these proposals and outlined ways to strengthen the current programs, making capital more affordable for borrowers.

Currently, microloan recipients cannot use their repayment history to improve their credit score. Building a strong credit history is a challenge for many business owners. By changing the current system, borrowers could improve their credit records, thus increasing the stability of their business and their ability to obtain future funding.

The committee also proposed reducing costs and providing greater flexibility, allowing lenders to better meet the needs of their clients. In striving for these goals, members seek to make loans more accessible for the next generation of entrepreneurs.

"For many aspiring business owners, a microloan is their only option, and we simply cannot allow these entrepreneurs to be left behind," Chairwoman Velázquez said. "The answer is simple: these programs must be permitted to continue, and any proposal to diminish them must be firmly rejected."

GoodBiz113's take: SBA's microloan and PRIME programs need to be sustained in order to help ensure that future businesses can thrive in underserved areas. Further, we'd like to see the changes proposed by Velázquez's committee embraced by her colleagues and the White House, and implemented ASAP.

Sources: PBS [file photo], U.S. House Small Business Committee
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Rep. Velázquez: Trade Changes Needed to Promote U.S. Small Business Abroad

Though small businesses make up 97 percent of America's exporters, they generate only 30 percent of national revenues from products sold overseas. The House Small Business Committee today pressed the Office of the U.S. Trade Representative [USTR] on their failure to have staff dedicated to ensuring that the needs of small firms are accounted for in trade practices, and examined current strategies to assist entrepreneurs with finding prospects in international markets.

"Small businesses have shown that they are eager and able to compete around the world," said Chairwoman Nydia M. Velázquez. "It only makes sense that there would be USTR officials dedicated to representing their interests.

"Despite the need for this representation, we heard today that out of the 22 assistant USTRs, not one is charged with aiding entrepreneurs. This is simply unacceptable in today's global marketplace, where small businesses play such a dominant role."

Though small firms have demonstrated interest and achieved success in the international arena, the unique challenges they face have slowed their expansion. For small businesses, conducting foreign transactions may prove to be expensive, thus limiting their ability to reach new customers and grow. Entrepreneurs also use a disproportionate amount of their resources navigating complex customs requirements, as well as complying with local, state, and federal laws.

Recent agreements have not included industries dominated by small business. They have also failed to stop unfair trade practices -- such as dumping and intellectual property theft -- that harm entrepreneurs. These actions are limiting small businesses' opportunities to benefit from trade, making it more difficult for them to compete domestically and internationally.

"Global opportunities are critical to many small business owners, who rely on trade to expand their ventures and continue innovating," Velázquez said. "Current trade measures have not created an environment that is conducive to entrepreneurial success."

Expansion into new markets has the potential to boost revenues -- improving small firms' overall ability to create jobs and contribute to domestic economic growth. Steps must, therefore, be taken to ensure they are an integral part of trade policies.

At today's hearing, witnesses outlined a small business-oriented trade strategy -- including international commitments that provide more transparent and less expensive regulations. Additionally, harmonizing and simplifying customs requirements would allow small businesses to easily export to multiple countries, giving them access to more customers in return for their investment.

Trade promotion programs that focus specifically on small firms -- such as the financing program at the Export-Import Bank -- can play an important role in maintaining small companies' competitiveness. These changes will increase domestic profits from exports, combating the rising trade deficit.

"As Congress debates new international agreements and considers changing its trade rules, small firms have a lot at stake," Velázquez noted. "This committee will work to streamline the process and ensure small business interests are promoted, not marginalized, as they have been in the past."
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Small Producers Outline Priorities for 2007 Farm Bill

The House Small Business Committee today brought together a broad cross-section of agriculture producers and rural organizations to examine the needs of small family farms and rural entrepreneurs in the upcoming debate on the 2007 Farm Bill.

Among the groups represented during the hearing:
* National Rural Electric Cooperative Association
* National Farmers Union
* National Corn Growers Association
* National Association of Wheat Growers

More than 70 percent of the nation's 2 million farms are small businesses-entrepreneurs that contribute to rural economies, and support their local communities by using the goods and services of thousands of other small firms.

"Small family farms are a critical part of rural communities, creating long-term stability and supporting entrepreneurship in the communities around them," said Chairwoman Nydia Velázquez. "We need to increase opportunity in rural areas, develop local resources, and sustain economic growth."

Many rural communities are coping with declining populations and wages, heightening the need for a comprehensive policy that creates new, more diverse economic opportunities. At the hearing, witnesses emphasized the need for high-quality economic growth. By creating an environment where small firms flourish, communities can maintain capital assets and create jobs that support rural families, including farmers.

These economic-development challenges are at the heart of the 2007 Farm Bill. It will address a wide range of issues -- such as rising energy costs, access to new markets, price supports and rural development -- that impact family farms and agribusinesses today.

Producers representing a variety of sectors within the industry discussed their priorities for the upcoming Farm Bill. Changes to the bill's commodity programs -- affecting the scope and size -- could have far-reaching effects on the competitiveness of farmers across the industry. Witnesses emphasized fruits and vegetables as potential new markets for small producers and, therefore, jobs and economic activity.

In addition to commodity programs, energy initiatives have assisted small producers, whose crops are fueling an expanding renewable energy sector. Small companies urged support for alternatives like cellulosic ethanol, and for infrastructure to further develop this booming industry where small businesses have taken the lead.

Infrastructure and other durable community resources may play a larger role in rural development discussions. Modifications to regulatory requirements, as well as the loans available in rural communities are a necessity to assisting small family farmers. These changes have the ability to create new opportunities and growth throughout rural America.

"In this year's Farm Bill, the stakes are high for small producers and agribusinesses, and it is critical that they are involved in this debate," Velázquez asserted. "Expanding markets and spurring opportunities for family farmers will help create a sustainable, prosperous future for rural areas nationwide."

The committee's assessment of the Farm Bill's impact on small producers is part of its ongoing work to promote economic development and entrepreneurship in rural America.

Last month, the committee passed the Small Energy Efficient Business Act of 2007, which offers assistance for the purchase and development of new energy technologies -- including biofuels -- through loans, education, and investment.

More than 20 agriculture trade organizations gathered at a recent Small Business Committee roundtable to discuss policies impacting small farmers and rural small businesses. The Subcommittee on Rural and Urban Entrepreneurship has also examined the ability of broadband to promote rural economic development.

To watch video highlights from today's Farm Bill hearing on YouTube, click here.
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House Committee Considers Impact of New SOX Regulations on Small Business

Today, as Congress reconvened, chairmen of the Securities and Exchange Commission [SEC] and the Public Company Accounting Oversight Board [PCAOB] came before the House Small Business Committee to explain the impact of recently approved standards for complying with Section 404 of the Sarbanes-Oxley Act of 2002 [AKA SOX 404] on small public companies. Chairwoman Nydia Velázquez [D-N.Y.] reiterated her call for at least a yearlong delay in allowing time for small firms to comply.

"Before we set time frames, we need to know that these guidelines will work," Velázquez asserted. "I strongly urge the SEC to delay the implementation of these regulations, and to thoroughly test these guidelines to enable us to fully grasp the true impact on small businesses."

With concerns raised over the effect that SOX 404 will have on this nation's small businesses, Chairwoman Velázquez called for the SEC, prior to approving the new standards, to develop a "hard dollar" estimate demonstrating the costs of these regulations on small companies.

Committee members argued that more time is needed to determine whether or not these rules will actually reduce compliance costs. The requested delay would also enable small companies to train managers and auditors in best practices to ensure the regulations are implemented properly.

It was these same concerns that prompted Chairwoman Velázquez and Ranking Member Steve Chabot [R-Ohio, pictured above] to ask for additional time for small businesses to comply with SEC and PCAOB guidance in March. However, the current proposal fails to account for this original request.

"Though it has taken five years to come to these conclusions about implementing SOX 404 for small firms, we should not be too hasty in imposing these rules," said Chairwoman Velázquez. "This is not something that has been decided overnight, nor should it be thrown upon small companies overnight. The SEC needs to recognize the negative impacts that immediate implementation will have on small firms."

Though small businesses and lawmakers have rallied around the Sarbanes-Oxley Act of 2002 in an effort to prevent accounting fraud and rebuild shareholder trust in the wake of corporate scandals, some of its provisions have been applied in a way that disproportionately impacts smaller public companies.

For example, small firms would face increasing regulatory and paperwork burdens under the reporting requirements in Section 404 [SOX 404]. Many are paying a higher percentage of their revenues for legal and audit fees than their larger counterparts.

To compound the difficulties for entrepreneurs -- many of whom already operate on small margins -- a number have diverted resources from research and development to compliance, or returned to private ownership simply to avoid the regulation altogether. All of these consequences have a negative impact on competitiveness for small businesses and limits their ability to expand, and to create jobs.

"The reality here is that small businesses could be negatively impacted by these regulations," said Chairwoman Velázquez. "The writing is on the wall, and the SEC and PCAOB need to acknowledge that. Given the complexity of these regulations and the uncertainty that surrounds them, it is critical that small companies are not being rushed into implementing them."
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House Committee Approves Bill to Help Small Business Cope With Rising Energy Costs

Rising energy costs have hit small businesses especially hard over the past few years, impacting their daily operations and forcing many to alter their business models. To help small businesses cope with climbing energy prices, the House Small Business Committee approved legislation, H.R. 2389, the Small Energy Efficient Business Act [SEEBA], to provide loans, education, and investment to small firms for energy efficient buildings, fixtures, equipment and technology.

"Small businesses nationwide are struggling as energy becomes increasingly expensive," said Chairwoman Nydia M. Velázquez [D-N.Y.]. "It is clear that swift action is needed to help firms deal with the record gas and energy prices. One way to do this is ensuring entrepreneurs are educated and aware of the assistance available to them, as well as helping them to remain the top producers of alternative sources of energy."

Addressing these challenges, the committee approved legislation yesterday that modifies existing Small Business Administration [SBA] programs to better assist small companies with adapting to today's changing energy environment. SEEBA, introduced by Congressman Heath Shuler [D-N.C.], gives small firms that are acquiring or developing energy efficient technologies more flexible loan terms.

SEEBA requires SBA to develop a strategy for educating small firms about energy efficiency, and establishes an energy efficiency program for the Small Business Development Centers [SBDCs]. The bill effectively spurs investment in the production of alternative sources, such as biofuels.

H.R. 2389 also promotes development of energy efficient technology by expanding the Small Business Investment Company [SBIC] program, increasing investment in small producers. Creation of the Renewable Fuel Capital Investment [RFCI] program, an initiative designed to help small firms develop renewable energy sources and new technologies, is also included.

Collectively, these measures benefit consumers and producers, thus reducing costs and increasing competition in the market for energy efficient goods and services.

"Small businesses are the first to be affected by rising energy prices, and small businesses will be the first to find the solutions," said Shuler, chairman of the Subcommittee on Rural and Urban Entrepreneurship. "This bill gives them the tools they need to lead our nation to energy efficiency and independence."

SEEBA will make new, energy efficient technology more affordable and accessible. As consumption grows an anticipated one percent annually over the next 25 years, costs for traditional energy sources will continue to increase.

H.R. 2389 will provide technical assistance to help small business owners implement strategies to mitigate energy costs. It also launches a comprehensive plan to disseminate energy efficiency information through programs that are already positioned around the country.

SEEBA will not only help small businesses cope with rising costs, but will also increase investment in small firms that are developing renewable energy solutions, recognizing the leadership of entrepreneurs in the alternative-energy sector.

This bill provides both business development resources and injections of capital that will contribute to creating the next generation of technologies. Simply put, SEEBA is essential to helping small firms cope with rising energy costs and, thus, reducing the nation's dependence on foreign oil.

"Small businesses have proven themselves to be flexible and nimble, adapting to changing to market conditions," said Chairwoman Velázquez. "The legislation approved gives entrepreneurs the tools to implement energy efficient strategies and develop renewable-energy technologies."

H.R. 2389 has garnered support from a wide array of small-business organizations, including: Independent Electrical Contractors, Air Conditioning Contractors of America, National Roofing Contractors Association, Plumbing-Heating-Cooling Contractors Association, National Small Business Association, and Small Business Majority.

GoodBiz113's take: Four months into his new job in Congress, former NFL quarterback Heath Shuler is already scoring on behalf of small businesses -- and everyone else who seeks sustainable energy technologies and energy independence. He's to be commended for taking far-reaching initiative. Congresswoman Velázquez deserves kudos, too, for empowering him to, well, "run with the ball."

Sources: Library of Congress, PBS [photo], U.S. House Small Business Committee
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