House Small Business Committee

Opportunity Rising: the FAA’s New Regulatory Framework for Commercial Drone Operations

House Small Business Committee News - Tue, 09/27/2016 - 11:00am
Chairman Cresent Hardy has scheduled a hearing of the Committee on Small Business Subcommittee on Investigations, Oversight and Regulations titled, Opportunity Rising: the FAA’s New Regulatory Framework for Commercial Drone Operations. The hearing is scheduled to begin at 11:00 A.M. on Tuesday, September 27, 2016 in Room 2360 of the Rayburn House Office Building.

Attachments
1. Hearing Notice
2. Witness List

Witness List

Mr. Gabriel Dobbs
Vice President, Business Development and Policy
Kespry Inc.
Menlo Park, CA
*Testifying on behalf of the Small UAV Coalition

Mr. Brian Wynne
President & CEO
Association for Unmanned Vehicle Systems International
Arlington, VA

Mr. Jonathan H. Daniels
President
Praxis Aerospace Concepts International, Inc
Henderson, NV

House Passes Committee-Led Small Business Cybersecurity Bill

House Small Business Committee News - Thu, 09/22/2016 - 12:00am

Bipartisan Measure Helps Protects Small Biz from Online Hackers

WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-OH) today applauded House passage of H.R. 5064, the Improving Small Business Cyber Security Act of 2016, bipartisan legislation which gives small businesses access to additional tools, resources and expertise to help protect their sensitive electronic data from cyber-threats.

“American small businesses are under cyberattack like never before,” said House Small Business Committee Chairman Steve Chabot (R-OH). “Small businesses employ about half of the private sector workforce and generate 54% of annual sales in our economy. We need to be doing all we can to help protect these job creators and their customers against the great and growing array of cyber-threats they face on a daily basis. This bipartisan, common sense legislation will help small businesses access the tools they need to protect themselves from cyberattacks in this dangerous new digital landscape.”

Improving cybersecurity for America’s 28 million small businesses has been a top priority for the House Small Business Committee throughout the 114th Congress. Over the past year, small business owners who have been the victims of cyberattacks have shared their harrowing personal stories with Committee members.

“I logged into our bank accounts, and to my utter horror, I found that my balance was zero,” said Rick Snow, a small business owner from Maine who testified before the Committee earlier this year. “This was a pay day, and I was terrified that the paychecks that were issued that day would not clear. We were supporting a number of families, many of which live paycheck-to-paycheck and could not have made it without the paycheck we issued them that day.”

“I was also very worried about our business’ reputation since a restaurant nearby had just bounced their paychecks and the company never recovered from the bad publicity they received from not making their payroll,” Snow added.

The legislation was introduced by Subcommittee on Contracting and the Workforce Chairman Richard Hanna (R-NY). Full Committee Chairman Chabot and Ranking Member Nydia Velázquez (D-NY) were original co-sponsors of the legislation, which now moves to the U.S. Senate for consideration.

BACKGROUND

  • According to a report from Verizon Enterprises, 71 percent of cyber-attacks occurred in businesses with fewer than 100 employees in 2012.
  • As The Hartford Courant reported last week: “The National Small Business Association, in its year-end 2015 report, found that 42 percent of small businesses surveyed reported they were victims of a cyber attack, costing them on average $7,115. For firms whose bank accounts were hacked, that number was higher at $32,020, up from $19,948 in 2014. Sixteen percent of respondents said it took longer than two weeks to restore their data.”
  • Small Business Development Centers (SBDCs) are non-federal resource partners that operate in a cooperative agreement with the Small Business Administration (SBA).
  • The SBDC program is the largest small businesses assistance program in terms of facilities and outreach with nearly 1,000 SBDCs around the country. The assistance offered by SBDCs is provided at no or low cost to small businesses and enables aspiring entrepreneurs and existing businesses to take advantage of skills and expertise from partner agencies and institutions.
  • The House Small Business Committee hearings in April 2016 and July 2016 featured testimony from cybersecurity experts and small business owners about the threat

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Chabot, Velázquez Ask for Explanation of 504 Loan Program Outages

House Small Business Committee News - Mon, 09/19/2016 - 12:00am

WASHINGTON—Upon learning that the Small Business Administration’s (SBA) CDC/504 Loan Program has experienced outages for roughly one third of all business days since June, House Small Business Committee Chairman Steve Chabot (R-Ohio) and Ranking Member Nydia Velázquez (D-NY) have written to SBA Administrator Maria Contreras-Sweet seeking answers.

The program, which is intended to promote local economic development by providing long-term fixed rate financing for small businesses, is handled through the Sacramento Loan Processing Center. The House Small Business Committee has learned that not only has the loan processing center experienced technical difficulties that stopped the processing of such documents as loan guarantees, environmental reviews, and appraisals, but that small businesses themselves had to notify the SBA of the outage.

Chairman Chabot and Ranking Member Velázquez said, “When significant problems arise that prevent SBA from effectively administering a statutorily created program, the agency has an obligation to inform the Committee and provide updates as to how these issues will be corrected.”

Delays in the administration of the 504 loan program can be costly to small businesses, making them vulnerable to changes in interest rates as well as putting a strain on third-party lending partners that often provide interim funding.

For more details, see full text of the letter here.

The Chairman and Ranking Member have asked the Administrator to respond to their inquiry by September 23. 

IRS Puts Small Businesses through Audit Wringer

House Small Business Committee News - Wed, 09/14/2016 - 11:00am
Chairman Steve Chabot has scheduled a hearing of the Committee on Small Business titled, "IRS Puts Small Businesses through Audit Wringer." The hearing is scheduled to begin at 11:00 A.M. on Wednesday, September 14, 2016 in Room 2360 of the Rayburn House Office Building. 

Attachments
1. Hearing Notice
2. Witness List

Witnesses 
Ms. Kathy Petronchak
Director of IRS Practices and Procedures
alliantgroup, LP
Houston, TX

Mr. Warren Hudak
President
Hudak & Company
Lemoyne, PA
*Testifying on behalf of the National Association of Enrolled Agents

Ms. Jennifer E. Breen
Partner
Morgan, Lewis & Bockius LLP
Washington, DC



IRS Audits Target Small Businesses

House Small Business Committee News - Wed, 09/14/2016 - 12:00am

Committee Spotlights Abusive IRS Tactics

WASHINGTON – Today, Small Business Committee witnesses told Congress that increasingly aggressive audits by the Internal Revenue Service (IRS) are harming innocent small businesses, forcing some to close their doors entirely.

“The IRS has an obligation to provide small businesses with clarity and to treat all taxpayers with fairness and respect,” said House Small Business Committee Chairman Steve Chabot (R-OH). “The agency has failed repeatedly in meeting this obligation to the people it is supposed to be serving.”

“I know Members of this Committee have heard from constituents who were audited so aggressively by the IRS that they had to close their doors. Others are engaged in protracted audits that seem like vague fishing expeditions, with no end in sight,” added Chairman Chabot.

A “SECRET ALGORITHM” TARGETS SMALL BUSINESSES

“Most audits are not random,” testified Don Williamson, Executive Director of the Kogod Tax Policy Center at American University. “The IRS has a secret algorithm for determining how likely each taxpayer is to have unreported income. Employing this calculus, the IRS has concluded that small businesses are less likely to be paying their fair share of taxes relative to much larger enterprises.”

“In short, use of IRS resources disproportionately targeting small businesses, regardless of the degree of misreported income by a few, is both an inefficient use of IRS resources and unfair to the vast majority of small businesses that properly report all their income while generating more growth and creating more jobs than any other sector of our economy,” concluded Williamson.

“INCONSISTENT TREATMENT” OF SMALL BUSINESSES

“We believe there is some inconsistent treatment of small versus large businesses by the IRS, as well as differing procedures being used in audits of these businesses,” said Kathy Petronchak, Director of IRS Practices and Procedures for alliantgroup, LP. “It is vitally important to remember that America’s small businesses do indeed have needs, interests and resources that may differ significantly from those of larger businesses.”

“Some of the procedures utilized in large business audits provide added transparency that would bring greater fairness to the small business examination,” Petronchak added.

THERE IS “A BETTER WAY”

The House Small Business Committee’s hearing comes as House Republicans are offering a policy agenda to rein in the IRS and reform the tax code to help small businesses as part of A Better Way to Grow Our Economy.

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The Cumulative Burden of President Obama’s Executive Orders on Small Contractors

House Small Business Committee News - Tue, 09/13/2016 - 11:00am
Chairmen Cresent Hardy and Richard Hanna have scheduled a joint hearing of the Committee on Small Business Subcommittees on Investigations, Oversight, and Regulations and Contracting and Workforce titled, “The Cumulative Burden of President Obama’s Executive Orders on Small Contractors.”  The hearing is scheduled to begin at 10:00 A.M. on Tuesday, September 13, 2016.

Attachments
1. Hearing Notice
2. Witness List

Witnesses

Mr. James P. Hoffman, P.E.
President
Summer Consultants, Inc.
McLean, VA
*Testifying on behalf of the American Council of Engineering Companies

Ms. Donna S. Huneycutt
Co-Owner and Chief Operating Officer
Wittenberg Weiner Consulting, LLC
Tampa, FL
*Testifying on behalf of the National Defense Industrial Association

Mr. Jimmy Christianson
Regulatory Counsel
Associated General Contractors of America
Arlington, VA

David Madland, Ph.D.
Senior Fellow & Senior Advisor to the American Worker Project
Center for American Progress
Washington, DC



@HouseSmallBiz and #SubEnergyPower Press EPA on Rules Limiting Refrigerants

House Small Business Committee News - Tue, 09/13/2016 - 12:00am

Chabot and Olson Concerned with proposed rule’s impact on American businesses and consumers

WASHINGTON, DC – House Small Business Committee Chairman Steve Chabot (R-OH) and House Energy and Power Subcommittee Vice Chairman Pete Olson (R-TX)today sent a letter to Environmental Protection Agency (EPA) Administrator Gina McCarthy requesting information related to the legality, cost, and feasibility of the agency’s proposed rule restricting several hydrofluorocarbon (HFCs) refrigerants in residential refrigerators and other equipment. The rule is the second such effort by the agency to limit refrigerants used in refrigeration and air-conditioning equipment.

“We have serious concerns about this rule’s impact on American businesses and consumers, and we also believe that it exceeds the agency’s statutory authority by establishing a new and expansive global warming program never intended by Congress,” write Olson and Chabot.

“These proposed regulations could have a chilling effect, and not the one you want, on manufacturers and consumers alike. We have a number of questions about EPA’s legal authority to restrict these refrigerants and whether doing so makes sense” commented Vice Chairman Olson. “We also want to know more about the actual environmental impacts of the proposed rule.”

“I believe that EPA’s proposed rule may pose particular burdens for small businesses that the agency has not fully taken into consideration,” noted Chairman Chabot. “I look forward to EPA’s responses to these concerns.”

To read the letter online, click here.

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Obama Executive Orders: A Crushing Burden on Small Business

House Small Business Committee News - Tue, 09/13/2016 - 12:00am

Small Contractors Say New Red Tape Pushing Them Out of Markets

WASHINGTON – Today members of the small business community told Congress that President Obama’s executive orders are preventing small businesses from competing for federal contracts, raising costs for the taxpayers while killing jobs and economic growth. Today’s joint hearing of two subcommittees of the House Small Business Committee comes as House Republicans are offering a policy agenda to reduce the regulatory burden on small businesses as part of A Better Way to Grow our Economy.

"In meeting after meeting with my constituents back home in Nevada, and listening to small business after small business testify here before our subcommittee, I have come to the conclusion that Washington regulators, and particularly those appointed in the Obama Administration, do not understand how much their actions affect the day-to-day operations of small firm," said Rep. Cresent Hardy, R-NV, the Chairman of the Subcommittee on Investigations, Oversight, and Regulations.

“The bipartisan work we have done here in the Small Business Committee is in stark contrast to what President Obama has done during his time in office,” said Rep. Richard Hanna, R-NY, the Chairman of the Subcommittee on Contracting and Workforce in his written statement. “Since 2009, the President has issued 15 Executive Orders and presidential memoranda that specifically relate to government contracting. While these mandates may be well-intentioned, too often the costs significantly outweigh the benefits.”

Small Engineering, Defense and Construction Companies Bearing the Brunt

“The engineering industry, which suffered significantly during the recent recession, is finally coming back to fiscal health,” testified James Hoffman, the President of Summer Consultants, Inc., who spoke on behalf of the American Council of Engineering Companies. “Unfortunately, these and other regulatory actions could put that recovery at risk and create disincentives for engineering firms of all sizes to participate in the federal market.”

“Several of the recent executive orders have, through flawed processes, installed burdensome, unnecessary, inefficient, and in many cases duplicative and overlapping regulatory regimes that have the cumulative effect of dramatically increasing the cost of doing businesses with the federal government,” said Donna Huneycutt, the co-owner of Wittenberg Weiner Consulting, LLC. “Over time, these will decrease efficiency and economy in federal procurement, while undermining small business growth and development, and limiting the federal government’s access to innovative products and services to fulfill their needs, in direct contradiction of ongoing initiatives.”

“Given the overall state of the construction economy today, several small business contractors have expressed to AGC that they are strongly considering or plan to walk away from the federal construction market,” noted Jimmy Christianson, who testified on behalf of the Associated General Contractors of America “The result of these new requirements may, therefore, include reduced competition and, in turn, higher prices to the federal government and taxpayers.”

You can view full video of today's hearing here and read full testimony here.

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Struggling to Grow: Assessing the Challenges for Small Businesses in Rural America

House Small Business Committee News - Thu, 09/08/2016 - 10:00am
Chairman Tim Huelskamp has scheduled a hearing of the Committee on Small Business Subcommittee on Economic Growth, Tax and Capital Access titled, “Struggling to Grow: Assessing the Challenges for Small Businesses in Rural America.”  The hearing is scheduled to begin at 10:00 A.M. on September 8, 2016 in Room 2360 of the Rayburn House Office Building.

Attachments
1. Hearing Notice
2. Witness List

Witnesses 
Mr. John Dearie
Author
"Where the Job Are: Entrepreneurship and the Soul of the American Economy"
Washington, DC

Mr. Robert Boyd
County Commissioner
Riley County
Manhattan, KS
*Testifying on behalf of the National Association of Counties

Mr. Hugh Middleton
Co-Founder
Kopis Mobile LLC
Flowood, MS

Chabot Hails Passage of Accelerating Access to Capital Act

House Small Business Committee News - Thu, 09/08/2016 - 12:00am

WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-OH) made the following statement about House passage of H.R. 2357, the Accelerating Access to Capital Act, legislation which will help entrepreneurs raise capital to start and grow their small businesses:

“Access to capital remains a critical issue for America’s 28 million small businesses. Many of our existing laws and federal regulation make access to capital more difficult for small businesses than for large businesses. HR 2357 takes a great step in addressing this problem. By clarifying the law in a way that allows small businesses to raise capital through limited, smaller scale, non-public offerings, we are cutting through some of the red tape that has kept new investors just out of reach from a lot of our small businesses. The federal government’s regulatory approach cannot be one-size-fits-all, especially where small businesses are concerned. This legislation addresses the unfair and unsustainable share of the federal regulatory burden that our small businesses carry.”

Click here or the photo below to watch Chairman Chabot's floor speech. 

BACKGROUND:

Chairman Chabot has made improving access to capital a top priority of the Small Business Committee in the 114th Congress.

The House has passed legislation authored by Chairman Chabot including the Small Business Regulatory Flexibility Improvements Act and the Helping Angels Lead Our Startups (HALOS) Act.

Chabot and House Republicans crafted a policy agenda earlier this year to reduce the regulatory burden on small businesses as part of A Better Way to Grow our Economy.  

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Overregulation Killing Jobs and Growth in Rural America

House Small Business Committee News - Thu, 09/08/2016 - 12:00am

Heartland Entrepreneurs Share their Stories with Congress

WASHINGTON – Entrepreneurs from rural America today called for relief from overregulation as they shared their personal experiences with government red tape with a key Congressional subcommittee. Today’s hearing of the House Small Business Committee’s Subcommittee on Economic Growth, Tax and Capital Access comes as House Republicans are offering a policy agenda to reduce the regulatory burden on small businesses as part of A Better Way to Grow our Economy.

House Small Business Committee Chairman Steve Chabot (R-OH) co-chaired the House task force which crafted the plan using input from entrepreneurs across America that have shared their experiences with the Small Business Committee.

“The loss of community banks in this country due to regulatory challenges like Dodd-Frank have also hurt the rural communities served by these banks very hard,” said Subcommittee Chairman Rep. Tim Huelskamp (R-KS) at today’s hearing. “By understanding how small businesses can be successful in rural areas like my district in Kansas, we can not only improve the economic growth of the entire country, but create the businesses and the products of the future right at home.”

Breaking the Backbone of America

“Small businesses are the backbone of America,” testified Hugh Middleton, a former Navy SEAL officer and co-founder of a small mobile technology company in Flowood, Mississippi. “We create opportunity, generate jobs, invent new technology and keep the economy going. We do all of this while being over regulated, over taxed and under supported by the Federal Government. Everything from Obama Care to mountains of paperwork are hindrances to the growth and health of a small business.”

“With lower taxes and healthcare costs, we could hire more people, increase salaries and bring better talent to Mississippi,” Middleton added.

Rural Counties Also Paying the Price

“Federal agencies have issued an increasing number of regulations in recent years,” testified Robert Boyd, the County Commissioner of Riley County, Kansas. “According to the White House Office of Management and Budget (OMB), unfunded mandates from federal rules and regulations cost local governments, our citizens and businesses between $57 billion and $85 billion a year

“Small counties have to provide the same mandatory services and comply with the same regulations as our suburban and urban counterparts do. And we must do so with limited ability to raise revenue.” Boyd added.

You can read full testimony from today’s hearing here and watch full video here.

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Ensuring Opportunities: Oversight of the HUBZone Program

House Small Business Committee News - Wed, 09/07/2016 - 11:00am
Chairman Steve Chabot has scheduled a hearing of the Committee on Small Business titled, “Ensuring Opportunities: Oversight of the HUBZone Program." The hearing will be held at 11:00 A.M. on Wednesday, September 7, 2016 in Room 2360 of the Rayburn House Office Building.

Attachments
1. Hearing Notice
2. Witness List

Witnesses
Mr. William B. Shear
Director
Financial Markets and Community Investment
United States Government Accountability Office
Washington, DC

Mr. John Shoraka
Associate Administrator
Office of Government Contracts and Business Development
United States Small Business Administration
Washington, DC

SBA Leaves Committee with More Questions than Answers on HUBZones

House Small Business Committee News - Wed, 09/07/2016 - 12:00am

Chairman Chabot Says Congress Must Approve Changes to Program

WASHINGTON – House Small Business Committee Chairman Steve Chabot (R-OH) today expressed concern that the Small Business Administration (SBA) has failed to improve a federal program that aids small business development in economically distressed areas. Chairman Chabot also admonished the SBA that Congress and the Committee must approve all changes to the Historically Underutilized Business Zone or “HUBZone” program in order to ensure it is working as intended.

“The HUBZone program cannot fulfill its mission if the opportunities provided by these incentives are being taken by companies that don’t actually qualify for the program,” said Chairman Chabot in his opening statement. “The HUBZone program is intended to help these small businesses, but can only succeed if the program is run in way that actually helps the areas most in need.”

“It is crucial, however, that any efforts to alter or expand the program are made by working through Congress and with this Committee. Actions that could change how the program has been run, or how effective the program will be, must be done out in the open, with the public debate afforded by the People’s branch,” added Chabot.

After the hearing concluded, Chairman Chabot said “The SBA’s actions on the HUBZone program have left our Committee with more questions than answers. Our Committee will be evaluating all available options as we move forward in the coming weeks and months to improve this program.”

You can read full testimony from today’s hearing here and watch the full video here.

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Chabot: Obama Administration’s Final Blacklisting Rule As Bad as We Thought

House Small Business Committee News - Wed, 08/24/2016 - 12:00am

WASHINGTON - House Small Business Committee Chairman Steve Chabot (R-OH) made the following statement on the Obama administration’s final rule and guidance on the blacklisting of small contractors.  

“President Obama’s latest regulatory power grab should send a chill down the spine of every small contractor who does business with the federal government.  At a time when we should be doing all we can to encourage small businesses to compete for federal contracts, this new red tape will discourage competition resulting in delayed procurement and higher costs shouldered by the American taxpayer. Rather than work with Congress to eliminate waste, fraud and abuse in federal contracting, the Obama administration chose to implement a backwards policy of  ‘guilty until proven innocent’ for small businesses. This outrageous new rule is as bad as we thought and underscores the need for common sense regulatory reforms like those included in the ‘Better Way’ agenda’ put forth by House Republicans this spring.”   

BACKGROUND:

Since 2012, there are 100,000 fewer small businesses are competing for federal contracts.

The House Small Business Committee has repeatedly warned the Obama administration about the negative consequences of this rule for small businesses through letters, hearings and roundtables.  

Chabot in Cincinnati Enquirer: Abilities shine in small businesses

House Small Business Committee News - Tue, 08/16/2016 - 12:00am

Abilities shine in small businesses
By Chairman Steve Chabot (R-OH)
The Cincinnati Enquirer
August 16, 2016

Small businesses are more than just the backbone of the American economy. They are also the heart and soul of our communities in Ohio and across the nation.

As chairman of the House Small Business Committee, I have seen first-hand how small businesses are leading the way in expanding employment opportunities for Americans with intellectual or developmental disabilities and disorders.

For adults with autism, Down syndrome and other disabilities or disorders, finding sustaining employment can be a real challenge. These individuals can be overlooked when job opportunities arise, and too often they are shut out of the workplace altogether.

Yet every day we see examples of how small businesses, with their ability to adapt and accommodate, are able to provide employment opportunities to those who might not otherwise get a chance.

At a recent hearing, Terri Hogan, the owner of Contemporary Cabinetry East in Cincinnati, told our committee her personal story about hiring Mike Ames, a young man with Down syndrome and how it was, in her words, “the best business decision she ever made.”

“We need to educate others so they begin to take the 'dis' out of disabilities and replace it with ‘abilities,’" testified Hogan, noting that 62 percent of individuals with disabilities remain in the same job for three or more years, much lower than the turnover rate for individuals without disabilities.

“We also need to make small businesses aware of the huge untapped resource that is people with diverse abilities,” Hogan said. “Hiring people who are physically, genetically or cognitively diverse is not just the right thing to do, it is the smart thing to do.”

She was joined by Ames when she came to Washington. It was a great pleasure to meet and talk at length with both of them in our nation’s capital about this important issue and to have the benefit of their experience.

“Mike has raised morale, brought community awareness, caused others to have broader perspectives and has developed many friends at CCE,” Hogan said.

She went on to say that Ames helped to develop a healthier "bottom line" at her business; everyone works harder because of the example he sets.

I have heard from small business owners like Hogan across Ohio and the country about how hiring employees with special needs has not only boosted morale at their businesses but also productivity.

Sadly, only 30 percent of Americans with disabilities are employed.

This fall, we will mark National Disability Employment Assistance Month, an opportunity to refocus our efforts and reaffirm our commitment to help all Americans find the dignity and purpose that comes with having a job.

This commitment is why I co-sponsored bipartisan legislation, the ABLE to Work Act, a followup to the ABLE Act that will help adults with special needs save the money they earn from work without jeopardizing their Medicaid and Social Security benefits. I will continue to urge my colleagues to pass this important measure and get it to the president’s desk as soon as possible.

Thousands of young adults who graduated in the Class of 2016 will be joining the workforce this fall. This new chapter in life can present challenges for everyone, but for those with intellectual or developmental disorders or disabilities, it is especially daunting. These men and women might face a future where the prospect of finding employment is unknown, and options for the future are limited.

Thankfully, America’s 28 million small businesses are working to expand opportunities to help individuals with disabilities enter the workforce, and grow their quality of life.

Ready for Liftoff: The Importance of Small Businesses in the NASA Supply Chain

House Small Business Committee News - Tue, 07/12/2016 - 2:00pm
Chairman Carlos Curbelo has scheduled a hearing of the Committee on Small Business Subcommittee on Agriculture, Energy and Trade titled, “Ready for Liftoff:  The Importance of Small Businesses in the NASA Supply Chain.” The hearing will begin at 11:00 A.M. on Tuesday, July 12, 2016 in Room 2360 in the Rayburn House Office Building.

Attachments
1. Hearing Notice
2. Witness List

Witness List 

Mr. Chris Carberry
CEOand Co-Founder
Explore Mars, Inc.
Beverly, MA
Testimony

George Davis, Ph.D.
President and Founder
Emergent Space Technologies
Greenbelt, MD
Testimony

Ms. Carol Craig
President and CEO
Craig Technologies
Cape Canaveral, FL
Testimony

Mr. Stephen Gorevan
Chairman
Honeybee Robotics, Ltd.
Brooklyn, NY
Testimony

Small Biz is Out of This World

House Small Business Committee News - Tue, 07/12/2016 - 12:00am

Curbelo Hearing Spotlights Importance of Small Companies to NASA

WASHINGTON – Today small business owners told a key Congressional subcommittee that their companies and others like them play a vital role in meeting the needs of the National Aeronautics and Space Administration (NASA).Witnesses and lawmakers also discussed ways to strengthen and improve the critical partnership between small companies and NASA as the agency prepares to celebrate its 58th anniversary later this month.

“Designing next generation spacecraft takes time and in recent years, thankfully, there has been bipartisan consensus on the path forward for human exploration of deep space,” said Rep. Carlos Curbelo (R-FL), the Chairman of the House Small Business Committee’s Subcommittee on Agriculture, Energy and Trade which convened today’s hearing. “With a new Administration taking office in January, we must build upon that commitment and provide the certainty the industry needs to continue growing, innovating, and building our economy to ensure our nation continues its preeminence in human space flight.”

SPACE, THE FINAL FRONTIER

“One thing is clear: We must not allow the uncertainties of the past to prevail again. We must advance – and accelerate – into the next administration,” said Chris Carberry, the Co-Founder of Explore Mars, Inc.“There is strong bi-partisan support for the goal of sending humans to Mars, and there is clear excitement about that goal from the general public. We must harness that strong consensus.”

“We are approaching another major hurdle, and that is the uncertainty that traditionally accompanies a change in Administrations. Will we once again shift directions and throw our space program – and the small business community upon which its success depends - into turmoil, or will we fully embrace our current policy of sending humans to Mars? We have come so far in recent years, and it benefits no one if we radically change course again,” added Carberry.

ISSUES PERSIST

“I am today – at a crossroads of how to keep the manufacturing side afloat while waiting for delayed payments, extended NASA contract decisions and lack of access to working capital because of stringent banking regulations imposed by the Federal Government. I’ve effectively robbed Peter to grow Paul,” explained Carol Craig, President and CEO of Craig Technologies, a small business based in Cape Canaveral, FL. “I did so because it was the right thing to do – for our business, for our employees and for our community. I believe in our free market system and always strive to offer the very best product and/or service for the price agreed upon. Unfortunately, the cards remain stacked against a small business entrepreneur - even one who overcomes the odds and makes it to the next level.”

“Creating valuable employment opportunities in my community remains my number one goal and priority. But money has to come in the front door on a logical and planned timeline in order to properly budget and ensure the books remain solvent,” added Craig.

NASA OVER THE MOON FOR SMALL BUSINESSES

“I want to emphasize that for small businesses, NASA remains one of the Federal government’s most supportive organizations, testified Stephen Gorevan of Honeybee Robotics, Ltd, a small business based in Brooklyn, NY. “I believe NASA understands the ways in which the small business community can help it succeed with its mission, and it takes seriously its mandate to provide opportunities for small businesses such as Honeybee Robotics to thrive. We are excited for what the future holds and, along with our small business colleagues, look forward to the exciting and important missions ahead.”

CREATING JOBS, SPURRING INNOVATION

“Another challenge Small Businesses face in supporting NASA is the long-term stability of the SBIR-STTRprogram,” added George Davis, Ph.D, the president and founder of Emergent Space Technologies, noting that the program is budget-neutral. “Many U.S. Small Businesses rely on the SBIR-STTRprogram for seed funding in developing a unique product. Others, like Emergent, rely on it to perform strategic R&D for NASA, Air Force and DARPA. Ultimately this funding translates into jobs, both now and in the future.”

“As Albert Einstein once said, 'if we knew what we were doing, we would not call it research.' Congress can help Small Businesses by continuing its strong support of the SBIR-STTR program, especially when it comes to reauthorization in FY2020. Any delay or disruption in this vital program could result in the loss of thousands of job across the country,” concluded Davis.

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Committee Probes Foreign Cyber Attacks on U.S. Small Businesses

House Small Business Committee News - Wed, 07/06/2016 - 12:00am

Chabot: “Impacts both our national security and our economic security”

WASHINGTON – Leading cybersecurity experts warned members of the House Small Business Committee today that American small businesses are at great and growing risk of cyberattacks from foreign hackers. Today’s hearing was part of the Committee’s ongoing effort to spotlight the cyber security threats faced by America’s 28 million small businesses and develop solutions to combat the threat.

“Small business cyber security has been a top priority for our Committee throughout this Congress,” said House Small Business Committee Chairman Steve Chabot (R-OH). “In our previous hearings, we have heard stories from small business owners who have been the victims of cyber attacks. We have also heard dire warnings from cyber security experts about the new and varied cyber threats facing America’s 28 million small businesses.”

“Small businesses play an indispensable role in providing the federal government with products and services. They are integral links in the government supply chain but are often ill-equipped to combat against sophisticated foreign cyber attacks. This makes them a prime target for state sponsors of cyber terrorism who wish to undermine America’s commerce and security,” explained Chabot, who is also a senior member of the House Foreign Affairs Committee.

“This is an important dimension of the cyber security threat that impacts both our national security and our economic security and I believe it demands much more attention than it has received so far,”concluded Chairman Chabot.

You can read full testimony from today’s hearing here and view full video here.

AS FBI DIRECTOR JIM COMEY SAID YESTERDAY…

“As we know from FBI Director Jim Comey’s statement yesterday, the FBI has recently “developed evidence that the security culture of the State Department in general, and with respect to use of unclassified e-mail systems in particular, was generally lacking in the kind of care for classified information found elsewhere in the government,” testified Jamil N. Jaffer, the Director of the Homeland and National Law Program at the George Mason University School of Law.

“This is troubling news indeed, given the important role that the State Department plays in our relations with other nations, the type of sensitive information it receives from our allies, and the critical nature of the negotiations it conducts on behalf our people,” added Jaffer, who also praised Chairman Chabot’s successful effort to include an amendment to a State Department Authorization measure thatrequires a cybersecurity investigation into the State Department’s possible use of equipment and services purchased from suppliers linked to key cyber threat nations.

“The potential use of such equipment and services by the U.S. government is a key issue for congressional oversight, particularly given the threat environment that our nation—in both the public and private sectors—faces from nation-state actors and their proxies,” stressed Jaffer. “The innovative small businesses that are key engines of job growth and investment in our economy… must confront the very real threats we face in cyberspace.”

CYBER SECURITY EXPERTS SOUND THE ALARM

“As small businesses increase their connectivity to the Internet, they face significant challenges and additional costs, not just in infrastructure and the ‘nuts and bolts’ of establishing businesses’ connectivity, but also security-related costs,” testified Nova Daly, a Senior Public Policy Advisor at Wiley Rein LLP and former Director of International Trade at the National Security Council (NSC). “Both domestic and foreign criminals, as well as foreign governments, have been known to exploit and are actively targeting internet based vulnerabilities in order to gain access to financial information, customer data, and intellectual property.”

“In fact, according to McAfee, the well-renown security company, if cybercrime was a country, its GDP would rank 27th in the world,” testified Justin Zeefe, the Co-founder and Chief Strategy Officer of the Nisos Group, a cybersecurity consulting firm. “How would we collectively react if we knew that the 27th largest economy was absolutely dedicated to attacking our value? What if they were overwhelmingly directing their actions against small businesses? In fact, both of these statements are accurate.”

“Symantec found in June 2015 that 75% of cyberattacks were directed at organizations with fewer than 2,500 employees – a dramatic increase from years prior. Not a week goes by that we don’t read of a major data breach in the paper, with mention of what the attackers stole, and often how they managed to gain access.” Zeefe added.

BACKGROUND:

  • Today’s hearing comes after Chairman Chabot led several members of Congress in sending a letter to Secretary of State John Kerry and Secretary of Commerce Penny Pritzker about disturbing reports that Chinese telecommunications vendors may have been used to subvert U.S. sanctions against rogue regimes.
  • The Government Accountability Office (GAO) noted in a 2012 report that the FBI has determined that foreign state actors pose a serious cyber threat to the telecommunications supply chain.
  • The Office of the National Counter Intelligence Executive released a report in 2011 stating that tens of billions of dollars in trade secrets, intellectual property, and technology are being stolen each year from computer systems in the federal government, corporations, and academic institutions.They identified China and Russia as the two largest participants in cyber espionage.
  • According to a report from Verizon, 71 percent of cyber-attacks occurred in businesses with fewer than 100 employees in 2012.
  • Chairman Chabot has strongly supported key pieces of legislation aimed at improving cyber security for small businesses and the federal government this Congress including H.R. 5064, the Improving Small Business Cyber Security Act of 2016, and H.R. 1731, the National Cybersecurity Protection Advancement Act of 2015.

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Foreign Cyber Threats: Small Business, Big Target

House Small Business Committee News - Wed, 07/06/2016 - 12:00am
Chairman Steve Chabot has scheduled a full committee hearing of the Committee on Small Business titled "Foreign Cyber Threats: Small Business, Big Target" The hearing is scheduled to begin at 2 PM on Wednesday, July 6, 2016 in Room 2360 of the Rayburn House Office Building. 

Hearing Materials
1. Hearing Notice
2. Witness List

Witness List

One Size Does Not Fit All

House Small Business Committee News - Thu, 06/23/2016 - 12:00am

Layoffs, Benefit Cuts Coming Soon Due to Obama Overtime Rule

WASHINGTON – As the December 1, 2016 compliance deadline for the Department of Labor’s new overtime rule rapidly approaches, traditional small businesses, technology start-ups, and other small employers told the House Small Business Committee today that they may soon be forced to layoff workers, reduce benefits and lower wages to cover the costs of the new federally-mandated requirements.

“The DOL has heralded this rule as a long-overdue action that will provide tremendous benefits to workers,” said House Small Business Committee Chairman Steve Chabot (R-OH). “However, like so many of this Administration’s policies, this one-size-fits-all mandate will do far more harm than good.”

“Numerous small employers weighed in on this proposal and told the Department of Labor that the unprecedented salary level increase would have very negative repercussions,” Chairman Chabot noted. “They asked for a common sense rule that recognized that not all employers have the same resources or utilize the same compensation structures. Unfortunately, their pleas fell on deaf ears.”

“I want to assure the small employers here today, and those tuning in from across this great country, that while DOL didn’t listen to you, we are,” Chairman Chabot added.

Painful Choices Looming for Small Businesses

“From a personal perspective, this rule is likely to have negative consequences - not only to my company, but to my employees as well,” testified Albert F. Macre, a general partner at Payroll+ Services in Steubenville, OH.

“In addition to these negative impacts, the implementation window is very short. This rule will become effective on December 1, 2016, just over five months from now. Given that many small businesses are still struggling with the implementation of the Affordable Care Act five years after the enactment, this window of compliance seems barely cracked open,” Macre explained.

“As a small business owner with several salaried employees positioned between the current exempt overtime earnings threshold and that created by the Department of Labor’s new rule, I now find myself standing with countless other small business owners forced to swallow more government 'medication' prescribed before an accurate attempt at diagnosis has been completed,”Macre added.

Stunting the Growth of Tech Start-ups

“Looking back on when I started my company in 2010, I can tell you with 100% certainty that I would have not been able to hire my first employee had this rule been in place,” said Adam Robinson, the Co-founder of Hireology, a human resources technology business, in Chicago, IL.

“My company now has 100 employees with a median annual compensation that exceeds $70,000 a year - well above the US average. How many “Hireology’s” won’t get started as a result of this rule making that 1st employee unaffordable for an entrepreneur? Are fewer good-paying jobs created and fewer businesses launched the outcomes that are desired here?” asked Robinson.

“Like most federal regulations, the overtime rule is a one-size-fits-all policy that doesn’t distinguish among firm size, sector, location, or compensation structure. This means that companies that don’t fit the Department of Labor’s outdated model will be disproportionately hurt by the rule,” explained Robinson.

“At a time when the middle-class in this country is already being squeezed, the tech sector, sales jobs, and middle-management positions are a few areas that still provide relief. The overtime rule threatens to close those career pathways that have been paved by hard work,” he added.

Small Local Governments and Non-Profits Also Affected

“Mineral County is the very definition of a small governmental entity and we are very concerned about the potential impact of the new overtime rule on our ability to fulfill our fundamental responsibilities — many of which are mandated by the state and federal government,” testified Jerrie Tipton, the Chairman of the Mineral County Board of Commissioners in Nevada.

“Unfortunately, the new overtime rule does not adequately address the wide variations in local labor markets in counties across the country. And ultimately, please remember that the new rule will have broad consequences for taxpayers — and county services,” observed Commissioner Tipton.

“[T]he rule will drastically impact the budget and operations of nonprofits, as well as colleges and universities, health care providers, small businesses and local governments. These employers may be unable to absorb such costs without adverse impact to employee relations or fiscal operations,” testified Christine V. Walters, the Sole-Proprietor of FiveL Company in Westminster, MD.

“One of my clients provides rehabilitation services to a disadvantaged population, of which 85 percent of their clients meet the current poverty threshold. Unlike other employers, this organization cannot transfer increased costs to their lower-income consumers,” explained Walters.

You can read full testimony from today’s hearing here and watch full video of the hearing here.

BACKGROUND

  • Chairman Chabot served as co-chairman of the special House Task Force on Reducing Regulatory Burdens. Last week, Speaker Ryan, Chairman Chabot and House Republicans unveiled the work of the task force in front of the Department of Labor’s Washington DC headquarters and spoke at length about the overtime rule.
  • You can read the task force’s full report titled “A Better Way to Grow the Economy”hereand view video of Chabot’s remarkshere.
  • Chairman Chabot is a co-sponsor of H.R. 4773, the Protecting Workplace Advancement and Opportunity Act, which would nullify the rule and require the DOL do a thorough economic impact analysis of any substantially similar rule.
  • The Small Business Committee has vigorously opposed the DOL overtime rule for months. The Committee has held numerous hearings and roundtables and sent multiple letters explaining to the administration the damage that will be done to America’s 28 million small businesses and other small employers as a result of the rule.

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