[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
FULL COMMITTEE MARKUP OF
LEGISLATION MODERNIZING
THE SBIR AND STTR PROGRAMS
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
June 25, 2009
__________
[GRAPHIC] [TIFF OMITTED] TONGRESS.#13
Small Business Committee Document Number 111-033
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HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA M. VELAZQUEZ, New York, Chairwoman
DENNIS MOORE, Kansas
HEATH SHULER, North Carolina
KATHY DAHLKEMPER, Pennsylvania
KURT SCHRADER, Oregon
ANN KIRKPATRICK, Arizona
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
MELISSA BEAN, Illinois
DAN LIPINSKI, Illinois
JASON ALTMIRE, Pennsylvania
YVETTE CLARKE, New York
BRAD ELLSWORTH, Indiana
JOE SESTAK, Pennsylvania
BOBBY BRIGHT, Alabama
PARKER GRIFFITH, Alabama
DEBORAH HALVORSON, Illinois
SAM GRAVES, Missouri, Ranking Member
ROSCOE G. BARTLETT, Maryland
W. TODD AKIN, Missouri
STEVE KING, Iowa
LYNN A. WESTMORELAND, Georgia
LOUIE GOHMERT, Texas
MARY FALLIN, Oklahoma
VERN BUCHANAN, Florida
BLAINE LUETKEMEYER, Missouri
AARON SCHOCK, Illinois
GLENN THOMPSON, Pennsylvania
MIKE COFFMAN, Colorado
Michael Day, Majority Staff Director
Adam Minehardt, Deputy Staff Director
Tim Slattery, Chief Counsel
Karen Haas, Minority Staff Director
.........................................................
(ii)
?
STANDING SUBCOMMITTEES
______
Subcommittee on Contracting and Technology
GLENN NYE, Virginia, Chairman
YVETTE CLARKE, New York AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
PARKER GRIFFITH, Alabama
______
Subcommittee on Finance and Tax
KURT SCHRADER, Oregon, Chairman
DENNIS MOORE, Kansas VERN BUCHANAN, Florida, Ranking
ANN KIRKPATRICK, Arizona STEVE KING, Iowa
MELISSA BEAN, Illinois TODD AKIN, Missouri
JOE SESTAK, Pennsylvania BLAINE LUETKEMEYER, Missouri
DEBORAH HALVORSON, Illinois MIKE COFFMAN, Colorado
GLENN NYE, Virginia
MICHAEL MICHAUD, Maine
______
Subcommittee on Investigations and Oversight
JASON ALTMIRE, Pennsylvania, Chairman
HEATH SHULER, North Carolina MARY FALLIN, Oklahoma, Ranking
BRAD ELLSWORTH, Indiana LOUIE GOHMERT, Texas
PARKER GRIFFITH, Alabama
(iii)
?
Subcommittee on Regulations and Healthcare
KATHY DAHLKEMPER, Pennsylvania, Chairwoman
DAN LIPINSKI, Illinois LYNN WESTMORELAND, Georgia,
PARKER GRIFFITH, Alabama Ranking
MELISSA BEAN, Illinois STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania VERN BUCHANAN, Florida
JOE SESTAK, Pennsylvania GLENN THOMPSON, Pennsylvania
BOBBY BRIGHT, Alabama MIKE COFFMAN, Colorado
______
Subcommittee on Rural Development, Entrepreneurship and Trade
HEATH SHULER, Pennsylvania, Chairman
MICHAEL MICHAUD, Maine BLAINE LUETKEMEYER, Missouri,
BOBBY BRIGHT, Alabama Ranking
KATHY DAHLKEMPER, Pennsylvania STEVE KING, Iowa
ANN KIRKPATRICK, Arizona AARON SCHOCK, Illinois
YVETTE CLARKE, New York GLENN THOMPSON, Pennsylvania
(iv)
?
C O N T E N T S
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OPENING STATEMENTS
Page
Velazquez, Hon. Nydia M.......................................... 1
Graves, Hon. Sam................................................. 2
APPENDIX
Documents for the Record:
H.R. 2965, The Enhancing Small Business Research and Innovation
Act of 2009.................................................... 19
Amendment to H.R. 2965 Offered by Mr. Akin....................... 56
Amendment to H.R. 2965 Offered by Ms. Velazquez.................. 57
Amendment to H.R. 2965 Offered by Mr. King....................... 58
Amendment to H.R. 2965 Offered by Mr. King....................... 59
(v)
FULL COMMITTEE MARKUP OF
LEGISLATION MODERNIZING
THE SBIR AND STTR PROGRAMS
----------
Thursday, June 25, 2009
U.S. House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:00 a.m., in Room
2360 Rayburn House Office Building, Hon. Nydia Velazquez
[chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Moore, Shuler,
Dahlkemper, Schrader, Kirkpatrick, Nye, Michaud, Altmire,
Clarke, Ellsworth, Bright, Griffith, Halvorson, Graves, Akin,
King, Fallin, Luetkemeyer, Schock, Thompson and Coffman.
Chairwoman Velazquez. I am pleased to call this morning's
hearing to order.
Today, the Committee will consider legislation that will
modernize the Small Business Innovation Research and Small
Business Technology Transfer programs. These initiatives, which
were last updated eight years ago, are fundamental to creating
new technologies as well as new jobs. With national
unemployment at a staggering 9.4 percent--and many states well
beyond this level--now is the right time to strengthen and
broaden these programs.
I want to thank Chairman Nye and Ranking Member Schock, of
the Subcommittee on Contracting and Technology, and Chairman
Jason Altmire on the
Subcommittee on Investigation and Oversight, for
shepherding this legislation through Committee. In addition, I
would like to also thank the four Committee members whose bills
have been incorporated into H.R. 2965, Representatives Bright,
Halvorson, Schock, and Ranking Member Graves.
SBIR is the largest dedicated source of federal R&D funds
for small businesses. Under the program, federal agencies with
extramural research budgets of $100 million or more dedicate
2.5 percent of their overall research budget for technology
development contracts toward small business awards.
Currently, 11 federal departments are required to
participate in the program. They combine to award over $2
billion in grants annually to small firms in all 50 states and
the District of Columbia and Puerto Rico, funding thousands of
projects and helping over 1,500 new companies get off the
ground every year.
Under the STTR program, government agencies that spend more
than $1 billion annually in extramural R&D dedicate a
percentage of their research budget to supporting joint
proposals between small firms and nonprofit research
organizations, such as universities. These partnerships are
critical to transferring technology from universities to the
private sector, and for creating jobs in local communities.
The continued success of the SBIR and STTR programs is
dependent on three primary issues. First, the program must
attract new applicants. Second, awardees must have adequate
access to investment from all types of capital. Third, more
needs to be done to bring these breakthrough products to the
marketplace, meaning we must promote greater commercialization
in these initiatives.
The bill before us today addresses all of these issues and
has the support of the Biotech Industry Organization, the
Advanced Medical Technology Association, the Parkinson's Action
Network, the National Venture Capital Association, the Cystic
Fibrosis Foundation, the U.S. Women's Chamber of Commerce, and
the Medical Device Manufacturer's Association. Modernizing the
SBIR and STTR programs will make them more responsive to the
needs of today's small businesses. This is absolutely critical
to creating more jobs and growth in our economy.
And now I yield to Ranking Member Graves for his opening
remarks.
Mr. Graves. Good morning. Thank you, Madam Chair, for
holding this markup. And I appreciate your leadership on this
issue and commend you and your staff for maintaining a very
strong-spirited bipartisanship as we continue our work on the
SBIR and STTR programs.
Innovation happens every day. Whether it is new development
in the fight against cancer or a new computer system designed
to protect our soldiers, more and more of them are continuing--
or coming from America's small businesses. The SBIR and STTR
programs help to take ideas and turn them into practical
products.
Our Committee has worked hard to produce the legislation we
have before us today. We have held several hearings on this
topic since April, inviting witnesses from both the Federal
Government and the private sector to discuss why these programs
have been so successful and what is needed to be updated to
make the programs even better.
I am happy to say that many of the ideas presented improve
the--many of the ideas presented to improve the program have
found their way into this legislation. For example, the topic
that dominated much of the discussion at our hearings was the
appropriate level of venture capital involvement in the SBIR
program. Our legislation addresses this. Fortunately, there
have been several misconceptions about this provision in the
bill.
As many of you know, in 2003, the SBA reversed a 20- year
old policy by ruling that small businesses that are majority
owned by venture capital companies can no longer compete for
grants under the SBIR program, regardless of how few employees
the company has. This has jeopardized the development of
innovative treatments, therapies, and technology.
The goal of this bill is to ensure that America's small
businesses continue to be world leaders in innovative research
and to provide the best small companies with the greatest
commercialization potential access--greatest commercialization
potential access to the SBIR and STTR programs.
In addition, access to capital is a real concern for small
businesses across all industries, and the bill provides small
firms another path to acquire the capital they need to be
successful. It is important to keep in mind that these programs
will remain open for competition among all small companies, and
federal agencies will choose the best businesses to win the
awards.
H.R. 2965 contains significant and dedicated safeguards to
ensure that the SBIR program remains a small business program.
It forbids a small business with one venture capital firm
having over 50 percent ownership from qualifying for small
business awards. The bill also has protections that prohibit
large companies from taking control of the small company and
receiving small business grants.
Additionally, our comprehensive bill takes significant
strides to bring the programs into the 21st century by
increasing the award sizes, enhancing data collection and
reporting requirements for better oversight, and providing
federal agencies a mechanism in which they can meet and share
best practices.
Madam Chair, again, I appreciate your leadership on this
issue, and I look forward to our work on this issue and yield
back.
Chairwoman Velazquez. Thank you, Mr. Graves.
Are there any other members that wish to be recognized for
the purpose of opening remarks? Ms. Dahlkemper.
Ms. Dahlkemper. Thank you, Madam Chairwoman. The impending
expiration of the Small Business Innovation Research Program in
July compels us to examine the program before we act to
reauthorize it. Small business is a crucial sector of the
economy, yet before SBIR the vast majority of small firms were
unable to secure any research and development funding. Since
its inception in 1982, SBIR has been a tremendous success. SBIR
facilitates high-risk, high-reward research that does--not only
spurs innovation but also creates jobs.
While I intend on voting for the legislation before us, I
did want to raise one important issue that I am concerned
about. Title I of the Enhancing Small Business Research and
Innovation Act of 2009 makes majority-owned venture capitalists
eligible for the SBIR program, as long as there is no single
venture capitalist owning more than 50 percent of the business
concern.
While I appreciate and understand the need for venture
capitalists in certain areas, particularly in biotechnology, I
am concerned that throwing open the door to all SBIR programs
without any limit might unfairly disadvantage small
conventional businesses. For instance, in my district in
Western Pennsylvania, we have very few venture capitalists, and
more limited access to venture capitalists from outside of the
district, yet Pennsylvania's small businesses rely on and
benefit from SBIR funding, garnering 271 awards totalling $74.8
million in 2005.
I would much prefer the stance that our colleagues in the
Senate have taken, limiting majority-owned venture capitalist
companies to 18 percent for NIH grants and 8 percent for all
other federal agencies. These numbers would be in line with
what a 2006 GAO report found regarding venture capitalist
investment. If we do not implement a cap, at the very least I
think we should study the impact of this change on conventional
small businesses.
Thank you, and I yield back my time.
Chairwoman Velazquez. Are there any other members who seek
recognition?
Mr. King. Madam Chair?
Chairwoman Velazquez. Mr. Nye? Oh, yes.
Mr. King. At the appropriate time I have an amendment.
Chairwoman Velazquez. Yes.
Mr. King. Thank you.
Chairwoman Velazquez. We are not there yet.
Mr. Nye.
Mr. Nye. Thank you, Chairwoman Velazquez, for holding this
important markup on legislation to update and improve the Small
Business Innovation Research and Small Business Technology
Transfer programs.
I would also like to recognize Mr. Altmire, who is
introducing the bill, as well as my colleagues, Mr. Bright, Ms.
Halvorson, Mr. Schock, and Ranking Member Graves, for their
contributions.
SBIR and STTR are vital programs. The Enhancing Small
Business Research and Innovation Act of 2009 will upgrade these
already useful initiatives, so that they can perform even
better for our country's small businesses. As Chairman of the
Subcommittee on Contracting and Technology, I have held several
hearings on SBIR and STTR. In those discussions, I have had a
chance to talk to program participants from across the country,
and their stories were not unlike the stories I heard just a
few weeks ago.
At the beginning of the month, I spoke to a group of more
than 1,000 participants in the Navy's SBIR program. What those
men and women told me is that R&D grants are critical to their
businesses and essential to innovation. This is particularly
true when it comes to the defense industry. That is an area of
continuing importance, not just in terms of national security
but also in our operations abroad.
In the past, SBIR and STTR have helped small firms develop
products to keep our soldiers safe. Take, for example, night
vision goggles or technology for unmanned aviation. Were it not
for SBIR and STTR, those critical breakthroughs may have never
made it to market. In other words, these programs represent
more than just research. When it comes to defense, they are
bringing developments from the drawing board to the
battlefield.
But as of now, both SBIR and STTR are outdated and in need
of improvement. The legislation we are marking up today will
modernize and enhance these programs. In my home district,
veterans make up nearly a quarter of the population, so I am
especially pleased that this bill encourages program
participation amongst our servicemen and women. After all, who
better to pioneer new defense products than the people who have
been out there on the front lines?
SBIR and STTR are important tools for developing new
products, but they are not just a means for invention. By
sparking innovation, they mark the surest path to unlocking new
markets, expanding new industries, and, most importantly,
creating new jobs. H.R. 2965 is an important step towards
lasting growth, and I look forward to its passage.
I yield back. Thank you.
Chairwoman Velazquez. Thank you. Any other member that
wishes to be recognized? Mr. Schock.
Mr. Schock. Thank you, Madam Chairman. I would, first, like
to thank you, Madam Chairwoman, and Ranking Member Graves, for
working to move this important piece of legislation through the
Committee. I would also like to personally thank Mr. Nye for
his work with me at the Subcommittee level to ensure that the
process of not only reauthorizing, but also modernizing, the
Small Business Innovation Research Program was done not only in
a bipartisan fashion, but also with the input from those in the
small business sector who utilize this important government
program.
Before this Committee today we have House Resolution 2965,
the Enhancing Small Business Research and Innovation Act of
2009. I am pleased that this legislation includes language I
introduced in House Resolution 2772, the SBIR and STTR
Enhancement Act. That language equips the SBIR program with
important new tools to bring it more in line with the needs of
small business owners in the 21st century.
For example, language has been included which will for the
first time since the program's inception increase the Phase 1
and Phase 2 grant levels. Additionally, information flow
between agencies and participants will be improved through the
creation of an online database to properly study and measure
the performance of businesses participating in the program.
Included as well is the requirement for more timely
solicitation and responses from participating agencies to the
applicants seeking SBIR assistance.
The changes this Committee is making here today will go a
long way to ensuring that the SBIR program is continued to be
used as a resource which helps small businesses bring their new
and novel ideas to commercialization while also providing a
value to our economy.
Again, I would like to thank those members who have been
influential in crafting this legislation. I urge its passage,
and I yield back, Madam Chairwoman.
Chairwoman Velazquez. Thank you. Any other member who
wishes to be recognized? Ms. Halvorson.
Ms. Halvorson. Thank you, Chairwoman Velazquez, for holding
this morning's markup. I also want to thank Mr. Altmire for his
leadership in moving today's legislation forward. I was proud
to have the opportunity to contribute to this bill,
particularly on an issue that hits close to home for me.
Despite promising signs of recovery, rural economics still have
a ways to go. In many parts of my district, unemployment
continues to linger at 13 percent.
In my home state of Illinois, and in rural regions across
the country, small firms and working families are really
struggling. The Enhancing Small Business Research and
Innovation Act of 2009 modernizes and improves the SBIR and
STTR programs. It also extends these initiatives to include
entrepreneurs in rural areas and underrepresented parts of the
population.
While small business growth is important in any community,
it is especially critical in underserved areas. That is why I
work to include important outreach provisions in this bill.
These measures will encourage entrepreneurship in places where
it is currently lagging. By promoting innovation within these
communities, H.R. 2965 will set them on a path to economic
recovery. When most people hear the word ``innovation,'' they
probably don't think of rural regions. But the truth is that
these are the areas with the most room for growth.
If we are going to rebuild our economy, then we will have
to unlock new markets everywhere, from Silicon Valley to the
Midwest heartland. This bill will do just that, and I look
forward to its passage.
I yield back.
Chairwoman Velazquez. Any other member who wishes--on this
side? Mr. Altmire.
Mr. Altmire. Thank you, Madam Chairwoman. And before I
begin, I would like to recognize the extraordinary
contributions of Mr. Bright, Ms. Halvorson, Mr. Graves, and Mr.
Schock. H.R. 2956 incorporates bills authored by each of them,
and it is thanks to their contributions that we have such a
strong bill before us today.
This legislation is particularly timely given the current
economy. Whenever our nation has bounced back from previous
downturns, the key ingredient has always been the same:
innovation. Innovative ideas spark new products, which generate
a wave of creation and put us back on a path to prosperity. As
we respond to the current recession, the Small Business
Innovation Research Program and the Small Business Technology
Transfer Program are two critical tools.
They provide valuable seed money for entrepreneurs who are
willing to explore untested concepts and ultimately develop new
products. The legislation before us makes a number of important
changes to the SBIR program. The bill broadens the types of
businesses that participate.
By expanding outreach to rural entrepreneurs as well as
businesses headed by women and veterans, H.R. 2956 will bring
SBIR research to areas of the country not traditionally
considered hotbeds for R&D. This will mean new parts of the
country and a more diverse set of firms will participate. This
not only brings SBIR grant money and STTR partnerships to new
regions of the country, but it expands the pool of talent from
which the program can draw.
Secondly, the bill targets resources towards bringing
products to market. The initial Phase 1 research funded by SBIR
is extraordinarily valuable. However, the greatest return on
investment often comes when an idea is fully vetted, found to
be workable, becomes a prototype, and finally is made
commercially available or put to use in the federal
marketplace.
Under this bill, the SBIR and STTR programs will be focused
on supporting the kind of work most likely to develop new
products. Perhaps most important, this legislation helps firms
participating in SBIR to attract capital. In 2003, an
administrative ruling changed the rules governing how firms
with venture capital backing might participate in the program,
and that decision has stopped some of the most promising small
businesses from receiving SBIR grants.
In the current economic environment, it is difficult for
small businesses to access financing under any situation,
whether it be through venture capital or otherwise. We should
be helping small businesses to raise capital, not penalizing
those that do so. Restoring the SBIR rules to how they worked
under the Clinton administration will further that goal.
I have seen firsthand the great benefit that can come from
venture capital investments. In my home region of Western
Pennsylvania, we have had the opportunity to team up with
businesses and areas like Cleveland, Ohio, to facilitate
venture capital investments.
This partnership has attracted over 80 venture capital
funds to invest in more than 60 health care enterprises in this
tech belt region. Many of these firms are doing cutting edge
work but under the current regulations cannot participate in
the SBIR program. Allowing firms like these to compete for SBIR
grants will foster innovation and further accelerate job
growth.
Madam Chair, all of these changes to SBIR and STTR that are
contained in the bill are important. They will ensure that
these initiatives are up to date and not only meet the
challenges of today but continue to foster innovation tomorrow.
Small businesses are our nation's greatest innovators. The
SBIR and STTR programs are just two ways that we can help them
continue creating the jobs of the future. I look forward to
working with you and the Committee as we move forward in
strengthening these important programs.
Thank you, Madam Chair.
Chairwoman Velazquez. Thank you. The Committee now moves to
consideration of H.R. 2965. The Clerk will report the title of
the bill.
The Clerk. To amend the Small Business Act with respect to
the Small Business Innovation Research Program and the Small
Business Technology Transfer Program, and for other purposes.
Chairwoman Velazquez. I ask unanimous consent that the
bill, in its entirety, be open for amendments at this time.
Does any member seek recognition for the purpose of offering an
amendment? Mr. Akin.
Mr. Akin. Madam Chair, I have an amendment at the desk.
[The Amendment offered by Mr. Akin is included in the
appendix.]
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. Amendment to H.R. 2965 offered by Mr. Akin. At
the end of Section--
Chairwoman Velazquez. I ask unanimous consent that the
amendment be considered as read. Without objection, so ordered.
Mr. Akin. Thank you.
Chairwoman Velazquez. The gentleman is recognized for five
minutes.
Mr. Akin. Thank you, Madam Chair. This amendment is
designed to limit the involvement of the Office of Advocacy in
the operation of the programs that we are reauthorizing today,
including the SBIR, STTR, and FAST programs. I am concerned
that recent actions by the current administration demonstrate
an effort to limit the primary statutory responsibilities of
the Office of Advocacy.
The legislative history of the office makes it clear that
the office is an independent voice in the Federal Government
for small business, and not an advocate for policies of the
President, the Director of the Office of Management and Budget,
or the SBA Administrator. The President has nominated an
individual to be chief counsel with apparently stellar
credentials in the fields of venture capital and technological
innovation, but with no experience in the regulatory process or
in advocating on federal policy issues that affect small
business.
I am concerned that the Office of Advocacy's primary
responsibility will move from advocating on behalf of small
businesses, especially in the context of regulatory matters,
and into providing advice to the Administrator on SBIR, STTR,
and FAST programs. My amendment ensures that the Office of
Advocacy will not become an alternative Office of Technology,
the office of the SBA the runs the SBIR, STTR, and FAST
programs.
This is not an ideal solution to ensure that the Office of
Advocacy remains an independent voice on behalf of small
business. But given the narrow scope of the legislation before
the Committee, it is the only viable solution at this time.
I would like to work with the Chairwoman on developing a
more comprehensive solution to ensuring that the Office of
Advocacy maintains its status as an independent federal voice
for small business concerns. I urge my colleagues to support
this amendment.
And, Madam Chair, just to say that a couple of years ago I
was chairman of a subcommittee. We had a Republican
administration, and we passed legislation in a bi- partisan way
to try to create a tremendous independence in this Office of
Advocacy. And I think that was when Mr. Sullivan was in charge
of it.
And if you think about it, you have got one poor guy
fighting every bureaucrat in the city of Washington, D.C., but
it is important to have somebody that has a tremendous
independence and a zeal to try to protect small businesses from
overregulation and just writing rules and regulations that
hamper small business and ruin the creation of jobs and
prosperity.
So I thank the Chairman for recognizing me. I would urge
the adoption of the amendment. I yield back.
Chairwoman Velazquez. Okay. The chair has been working with
Mr. Akin, and at this point we are willing to accept--Mr.
Graves--this amendment.
Mr. Akin. Thank you.
Chairwoman Velazquez. The question is on the Akin
amendment. All those in favor say aye.
Those opposed say no.
In the opinion of the chair, the ayes have it. The ayes
have it, and the amendment is agreed to.
The chair now recognizes herself for the purpose of
offering an amendment. I have an amendment at the desk. The
Clerk will report the amendment.
[The Amendment offered by Ms. Velazquez is included in the
appendix.]
The Clerk. Page 32, line 3, strike the period at the end
and insert ``and the Office of Management and Budget.''
Chairwoman Velazquez. I ask unanimous consent that the
amendment be considered as read. Without objection, so ordered.
Basically, what this amendment does is it adds another duty
to the program, and it is an amendment that was passed by the
Science and Technology Committee, and we are--this provision is
long overdue, and I welcome the inclusion of this provision
into the legislation.
I urge adoption of the amendment. Are there any other
members who seek to be recognized on the amendment? Seeing no
other members seeking recognition, the question is on the
Velazquez amendment. All those in favor say aye.
All those opposed say no.
In the opinion of the chair, the ayes have it, and the
amendment is agreed to.
Does any other member seek recognition for the purpose of
offering an amendment?
Mr. King. Madam Chair, I have an amendment at the desk.
[The Amendment offered by Mr. King is included in the
appendix.]
Chairwoman Velazquez. Mr. King is recognized. The Clerk
will report the amendment.
The Counsel. Which amendment, sir?
Mr. King. The amendment that goes to page 15, I believe it
is, as designated number 86 I think.
The Clerk. Page 15, beginning line 24, strike ``business
concerns owned and controlled by women, small.'' Page 16,
beginning line 2, strike ``and small business concerns owned
and controlled by minorities.''
Chairwoman Velazquez. I ask unanimous consent that the
amendment be considered as read. Without objection, so ordered.
The amendment--Mr. King is recognized for five minutes.
Mr. King. Thank you, Madam Chair. And I want to start this
out, I recognize that we likely have a legitimate philosophical
disagreement on how to approach these issues. As I look at
this--the underlying bill and evaluate its impact on Americans,
it occurs to me that there is--I have a philosophical position
that I have long held that we should guarantee equal
opportunity for all, and special preference for none.
And this bill, of course, sets aside women and minorities
as part of it. Those are special preferences. That runs
directly contrary to a deeply held conviction that I have, but
I just make that point--and I don't intend to deliberate that.
I think that is known. And I would rather focus that this
amendment does this, that it sets aside, then, and reserves the
resources and the programs for our disabled veterans in our
underserved areas.
And I think it is clear that the underserved areas have far
less access, and we need to do more aggressive outreach to the
underserved areas. And I think that is a unanimous position in
here or it wouldn't be in the bill in the first place. And so I
would like to focus those resources on the underserved areas,
but also on our disabled veterans.
And if there is any group in America that has paid a very
high price for serving our country, and that needs and deserves
and legitimately deserves the kind of support that this bill--
this underlying bill would direct to, it is our disabled
veterans.
So I would ask this Committee to view this amendment as an
amendment that focuses the resources in the most essential
places, that being in the underserved areas and our disabled
veterans, and recognizing our philosophical disagreement with
the categories that I am compelled to ask be removed from this
bill, because there is no other way to write the amendment.
And I think everybody understands the amendment and where I
stand on it, and I would urge its adoption and yield back the
balance of my time.
Chairwoman Velazquez. The chair recognizes herself. And let
me just say, Mr. King, I think that in this Committee we work
in a bipartisan way. And I just want to say that these
amendments were sent to our Committee at 10:00 this morning. We
have a process for members to send to us the amendment.
But in any case, we allow for the amendment to be offered.
We do have an ideological difference on this one. The purpose
of this bill is to widen, to broaden, the talent pool, and that
includes women, minorities, and you don't mention veterans and
rural areas that are also included in this bill. And it is the
focus of this bill.
The face of America is changing. We have to provide
resources for more women to be able to participate, for
minorities to be able to participate. The intent of this bill
is not only to provide for small firms to have the resources to
do the research and investigation and come up with products
that could be commercialized, and this way creating jobs.
So I am opposed to this amendment, and I would--
Mr. King. Madam Chair?
Chairwoman Velazquez. --ask for the members to vote against
it.
Mr. King. Would the gentlelady yield? As I listened to your
position, which I respect, I am curious as to--I recall the
majority opinion that was written by the United States Supreme
Court in the University of Michigan cases of affirmative action
written by Justice O'Connor, a woman on the Supreme Court. And
I disagreed with her opinion, and yet I recall that she said--
she wrote in that opinion that perhaps there would be a time in
the future, perhaps 25 years in the future, where we could back
and revisit and where we would no longer justify preferences.
And I would ask if you have entertained such a thought, or
do you believe that--
Chairwoman Velazquez. Mr. King?
Mr. King. --in perpetuity?
Chairwoman Velazquez. Would you yield?
Mr. King. Yes.
Chairwoman Velazquez. With all due respect--
Mr. King. Thank you for yielding to me.
Chairwoman Velazquez. --this has nothing to do with
preferences. This has everything to do with outreach, to
broaden the talent pool in this nation. What is wrong with
that?
Mr. King. If the gentlelady would yield. I would disagree
with it having to do with preferences. It clearly labels women
and minorities in the bill. So I am surprised at that response,
but I understand the gentlelady's position. And I am just not--
I prefer not to press it further.
Chairwoman Velazquez. Are there any other members who seek
to be recognized on this amendment? Yes, Mr. Schrader.
Mr. Schrader. Thank you, yes. Madam Chair, I totally agree
with your position, and I would hope discriminating against
women and minorities would not be a policy of this Committee.
Thank you.
Chairwoman Velazquez. Seeing no other--any other members
who seek recognition? Seeing no other members seeking
recognition, the question is on the King amendment. All those
members in favor say aye.
Those opposed say no.
In the opinion of the chair, the nos have it.
Is there any other member who seeks recognition for the
purpose of offering an amendment? Mr. King is recognized.
Mr. King. I have an amendment at the desk.
[The Amendment offered by Mr. King is included in the
appendix.]
Chairwoman Velazquez. The Clerk will report the amendment.
The Clerk. Page 21, line 7, strike the quotation mark and
following period. Page 21--
Chairwoman Velazquez. I ask unanimous consent that the
amendment be considered as read. Without objection, so ordered.
The gentleman is recognized for five minutes.
Mr. King. Thank you, Madam Chair. This is an amendment that
addresses the issue of the organization that is known
collectively as ACORN. And it has been solidly reported with
documented evidence underneath that and admitted by ACORN that
they are a myriad of organizations. I name ACORN, but also 173
other organizations that are affiliated with ACORN. And I am
not able to gather them all together, because ACORN has become
a spider web of organizations and affiliations that is
insidious in its involvement in this country.
They have received at least $53 million in taxpayers'
money, and now, because of some actions of this Congress, may
be eligible into categories of $8-1/2 billion all together. And
this is an amendment that precludes ACORN from being a
beneficiary of this program. And I recognize that it doesn't
specify organizations, but neither can we define the
organization called ACORN, because it is so broad and so
insidious.
And so my interest is that we are watching our election
process be corrupted. We are watching many parts of our
business world feel this reach that comes. And I have been
calling for months now for an investigation of ACORN, the
congressional investigation of ACORN, for a Department of
Justice investigation of ACORN. We do have I think a growing
groundswell of interested Americans that are pulling
information together and aggregating it.
But I am committed, as many members of the now majority
party were committed, to plugging into our legislation the
Davis-Bacon wage scale, which I clearly object to, and to piece
of legislation after piece of legislation.
I am committed to no longer allowing any federal funds from
getting into ACORN's coffers until such time as there is a
completed investigation, a forensic analysis, and we have the
confidence the parts that may remain at the end of that
investigation are the legitimate components that can actually
help and enhance the American economy and the American society.
And so this is an amendment that simply states that ACORN
and its affiliates will not be--
Chairwoman Velazquez. Would the gentleman yield?
Mr. King. --a beneficiary of this program. And I would
yield to the gentlelady.
Chairwoman Velazquez. If it is your knowledge that ACORN
has received any SBIR grant?
Mr. King. It is not to my knowledge.
Chairwoman Velazquez. Thank you. Okay.
Mr. King. It is to my endeavor that they not receive it.
Chairwoman Velazquez. Thank you for yielding.
Mr. King. And I would just simply urge the adoption of this
amendment, and I would yield back the balance of my time.
Chairwoman Velazquez. The chair recognizes herself for the
purpose of opposing this amendment.
Mr. King, I understand that there are issues with some
members regarding ACORN. But ACORN is a housing group. This is
not the vehicle for anyone to go after ACORN participating on
resources from the Federal Government. This is the Small
Business Committee. So to me, there is no point to offer an
amendment to prohibit a group that is ineligible to participate
under the SBIR or STTR program.
To my knowledge, ACORN is not in the business of research
and technology. They are a housing group. So for that reason
alone, I oppose this amendment. I consider this is not the
place. That amendment should be brought up in the Housing
Subcommittee Financial Services.
Any member who seeks recognition? Mr. Akin.
Mr. Akin. I would just yield time to the gentleman from
Iowa, so he could respond.
Mr. King. I thank the gentleman from Missouri for yielding,
and I agree that ACORN is a housing group. But they are much,
much more than a housing group. They are the organization that
has admitted to producing over 400,000 fraudulent voter
registration forms. They are an organization that has been
announced within the last couple of days that it is their
endeavor to broaden their reach. And ``broaden their reach'' at
least implies into every aspect of American life where they can
have some type of political influence.
They are signed on as a partner for the United States
Census where we are sitting in a position now where we are--the
great risk of America's elections being undermined now may be
transferred into the question of legitimacy of the United
States Census. I don't know all of the places where ACORN
reaches, and I don't think we can know that either.
I want to assure that we are not funding an organization
that is undermining our freedoms, and I think we need to put
that barker in place at every single spot that we can. And so I
urge adoption of my amendment, and I would yield back to the
gentleman from Missouri.
Chairwoman Velazquez. Would you yield?
Mr. Akin. I yield back my time.
Chairwoman Velazquez. Okay. Let me just respond to the
gentleman's assertion that census or voter registration has
anything to do with the SBIR program or the STTR program. And
for you to say that you don't know if they do that, I guess
that any member who intends to offer an amendment will do the
research to determine whether or not the amendment is germane
to the issue or the subject at hand.
If there is any other member who seeks to be recognized?
Mr. Shuler.
Mr. Shuler. Thank you, Madam Chair. You know, this is,
what, the third year I have been on the Committee. And, you
know, I think we have finally gotten to partisan politics on
the Committee, and I think that is very unfortunate, when the
fact of the matter is that small businesses are trying to
continue to grow. And to put partisanship in this is kind of
embarrassing into this Committee, and I just don't think it is
the time and place for that. There is other Committees that can
be doing that.
But, Madam Chair, I continue to thank you for your
leadership. And Ranking Member Graves, obviously, in his
opening statement talked about working together and to show up
with amendments like this. I have got all the respect in the
world for Mr. King, but that is not the way we do things on
this Committee.
I yield back.
Chairwoman Velazquez. Are there any other members who wish
to be recognized--
Mr. Schrader. Yes, Madam--
Chairwoman Velazquez. --on this amendment? Mr. Schrader.
Mr. Schrader. Thank you, Madam Chairman. Yes, I agree. I
put myself in the camp with Congressman Shuler that I enjoy the
bipartisan nature of this Committee. But I guess I would make a
motion to table this amendment, because it has come in so late,
and give ourselves due consideration to look at it thoroughly
and give me time to develop a list of right wing extremist
organizations that might also be prohibited organizations under
this amendment.
Chairwoman Velazquez. Any other member? Ms. Kirkpatrick.
Ms. Kirkpatrick. Thank you, Madam Chair. I, too, appreciate
the bipartisan work on this Committee. Having gotten this
amendment just a few minutes ago, and reading through it, I
really don't have enough information to vote intelligently on
it. And I just want to point out some of the organizations that
are in this list.
For instance, there is Citizens Consulting, Inc., Flagstaff
Broadcast Foundation, the Hospitality Hotel and Restaurant
Organization Council, the Neighbors of Althea Ray, the
Neighbors of Maria Torres, the Neighbors of Ted Thomas. I don't
know who those folks are. I surely would hope that, should an
amendment ever come before this Committee that included the
Neighbors of Ann Kirkpatrick, that we would look at that and
hear from them before we voted. So I am opposed to it.
Thank you.
Chairwoman Velazquez. Any other members seeking
recognition? Seeing no other members, the question is on Mr.
King's amendment. All those in favor say aye.
Those opposed?
Mr. Schrader. Madam Chair?
Chairwoman Velazquez. In the opinion of--
Mr. Schrader. Can we--point of order. I actually move to
table the amendment. Is that acceptable to the chair?
Chairwoman Velazquez. No. We are going to proceed and vote.
Mr. Schrader. Okay. That is fine.
Chairwoman Velazquez. In the opinion of the chair, the ayes
have it.
Mr. Ellsworth. Madam Chair, can we--would it be out of--to
take a recorded vote? I should have spoken on the last
amendment and asked for a recorded vote. I would like a
recorded vote on this amendment.
Chairwoman Velazquez. Okay. A recorded vote has been
requested. The Clerk will call the vote.
The Clerk. Ms. Velazquez.
Chairwoman Velazquez. No.
The Clerk. Ms. Velazquez votes no.
Mr. Moore.
Mr. Moore. No.
The Clerk. Mr. Moore votes no.
Mr. Shuler.
Mr. Shuler. No.
The Clerk. Mr. Shuler votes no.
Ms. Dahlkemper.
Ms. Dahlkemper. No.
The Clerk. Ms. Dahlkemper votes no.
Mr. Schrader.
Mr. Schrader. No.
The Clerk. Mr. Schrader votes no.
Ms. Kirkpatrick.
Ms. Kirkpatrick. No.
The Clerk. Ms. Kirkpatrick votes no.
Mr. Nye.
Mr. Nye. No.
The Clerk. Mr. Nye votes no.
Mr. Michaud.
Mr. Michaud. No.
The Clerk. Mr. Michaud votes no.
Ms. Bean.
[No response.]
Mr. Lipinski.
[No response.]
Mr. Altmire.
Mr. Altmire. No.
The Clerk. Mr. Altmire votes no.
Ms. Clarke.
Ms. Clarke. No.
The Clerk. Ms. Clarke votes no.
Mr. Ellsworth.
Mr. Ellsworth. No.
The Clerk. Mr. Ellsworth votes no.
Mr. Sestak.
[No response.]
Mr. Bright.
Mr. Bright. Yes. Yes.
The Clerk. Mr. Bright votes yes.
Mr. Griffith.
Mr. Griffith. No.
The Clerk. Mr. Griffith votes no.
Ms. Halvorson.
Ms. Halvorson. No.
The Clerk. Ms. Halvorson votes no.
Mr. Graves.
Mr. Graves. Yes.
The Clerk. Mr. Graves votes yes.
Mr. Bartlett.
[No response.]
Mr. Akin.
Mr. Akin. Yes.
The Clerk. Mr. Akin votes yes.
Mr. King.
Mr. King. Yes.
The Clerk. Mr. King votes yes.
Mr. Westmoreland.
[No response.]
Mr. Gohmert.
[No response.]
Ms. Fallin.
Ms. Fallin. Yes.
The Clerk. Ms. Fallin votes yes.
Mr. Buchanan.
[No response.]
Mr. Luetkemeyer.
Mr. Luetkemeyer. Yes.
The Clerk. Mr. Luetkemeyer votes yes.
Mr. Schock.
Mr. Schock. Yes.
The Clerk. Mr. Schock votes yes.
Mr. Thompson.
Mr. Thompson. Yes.
The Clerk. Mr. Thompson votes yes.
Mr. Coffman.
Mr. Coffman. Yes.
The Clerk. Mr. Coffman votes yes.
Chairwoman Velazquez. The Clerk will report the vote.
The Clerk. Thirteen ayes. Sorry. Nine ayes, 13 nos.
Chairwoman Velazquez. The amendment is not adopted.
Does any member seek recognition for the purpose of
offering an amendment? Seeing no amendments, the question is--
Mr. King. Madam Chair?
Chairwoman Velazquez. Yes.
Mr. King. I move to strike the last word in the bill.
Chairwoman Velazquez. The gentleman is recognized.
Mr. King. Thank you, Madam Chair. I just would like to
clear the air a little bit here in the Committee. And it is not
my intention to create animosity here in this bipartisan
Committee, and I want to congratulate you and Mr. Graves and
all of those who have set this tone that this Committee does
work for the best interest of small business in America.
And in response to Mr. Shuler and others, I want to point
out that this debate came here because it has been shut down in
the Rules Committee. The Rules Committee has shut down our
floor debate, and our avenues for debate are no longer the
legitimate ones that we had in Committee and on the floor. And
so this is a result of what takes place with the--I think the
dramatic change in our rules and debate process, on the floor
of the House, in the Rules Committee.
And it has reflected itself back here, because it is the
only avenue. I regret that. But as a member who has a franchise
to represent my district, I have an obligation to defend them
wherever I can.
And so I would yield back the balance of my time, and I
appreciate the opportunity this morning.
Chairwoman Velazquez. Let me respond, Mr. King. I have no
problem with your policy. I have no problem with you offering
amendments. I do have a problem with the fact that we have
conducted five hearings. That briefing has been provided to all
the staff of every--Republicans and Democrats. If you have a
problem with the Rules Committee, it is the Rules Committee,
not this Committee. And I don't appreciate for amendments to be
offered that really do not--they are not germane to the bill,
to the legislation, and look how much time we have wasted here
in two amendments that have no place in this legislation.
And I have worked diligently in a bipartisan way. And if
you have a policy-related issue that is germane to the
legislation, I have no problem with you offering those
amendments.
And with that, seeing no amendments, the question is on
reporting the bill H.R. 2965, as amended. All those in favor
say aye.
Those opposed say no.
In the opinion of the chair, the ayes have it.
Mr. Shuler. Madam Chair, I would ask for a recorded vote.
Chairwoman Velazquez. A recorded vote has been requested by
Mr. Shuler. The Clerk will call the vote, the roll.
The Clerk. Ms. Velazquez.
Chairwoman Velazquez. Aye.
The Clerk. Ms. Velazquez votes aye.
Mr. Moore.
Mr. Moore. Aye.
The Clerk. Mr. Moore votes aye.
Mr. Shuler.
Mr. Shuler. Aye.
The Clerk. Mr. Shuler votes aye.
Ms. Dahlkemper.
Ms. Dahlkemper. Aye.
The Clerk. Ms. Dahlkemper votes aye.
Mr. Schrader.
Mr. Schrader. Aye.
The Clerk. Mr. Schrader votes aye.
Ms. Kirkpatrick.
Ms. Kirkpatrick. Aye.
The Clerk. Ms. Kirkpatrick votes aye.
Mr. Nye.
Mr. Nye. Aye.
The Clerk. Mr. Nye votes aye.
Mr. Michaud.
Mr. Michaud. Aye.
The Clerk. Mr. Michaud votes aye.
Ms. Bean.
[No response.]
Mr. Lipinski.
[No response.]
Mr. Altmire.
Mr. Altmire. Aye.
The Clerk. Mr. Altmire votes aye.
Ms. Clarke.
Ms. Clarke. Aye.
The Clerk. Ms. Clarke votes aye.
Mr. Ellsworth.
Mr. Ellsworth. Aye.
The Clerk. Mr. Ellsworth votes aye.
Mr. Sestak.
[No response.]
Mr. Bright.
Mr. Bright. Yes. Yes, yes.
The Clerk. Mr. Bright votes yes.
Mr. Griffith.
Mr. Griffith. Aye.
The Clerk. Mr. Griffith votes aye.
Ms. Halvorson.
Ms. Halvorson. Aye.
The Clerk. Ms. Halvorson votes aye.
Mr. Graves.
Mr. Graves. Aye.
The Clerk. Mr. Graves votes aye.
Mr. Bartlett.
[No response.]
Mr. Akin.
Mr. Akin. Aye.
The Clerk. Mr. Akin votes aye.
Mr. King.
Mr. King. Aye.
The Clerk. Mr. King votes aye.
Mr. Westmoreland.
[No response.]
Mr. Gohmert.
[No response.]
Ms. Fallin.
Ms. Fallin. Aye.
The Clerk. Ms. Fallin votes aye.
Mr. Buchanan.
[No response.]
Mr. Luetkemeyer.
Mr. Luetkemeyer. Aye.
The Clerk. Mr. Luetkemeyer votes aye.
Mr. Schock.
Mr. Schock. Aye.
The Clerk. Mr. Schock votes aye.
Mr. Thompson.
Mr. Thompson. Aye.
The Clerk. Mr. Thompson votes aye.
Mr. Coffman.
Mr. Coffman. Aye.
The Clerk. Mr. Coffman votes aye.
Chairwoman Velazquez. Are there any other members seeking
to record or change their vote? Seeing none, the Clerk will
report the vote.
The Clerk. Twenty-two ayes.
Chairwoman Velazquez. The ayes have it. H.R. 2965 is
adopted and ordered reported as amended.
This concludes the Committee's business for today. I ask
unanimous consent that the Committee be authorized to correct
section numbers, punctuation, cross references, and to make
necessary technical and conforming corrections on the bill
considered today. Without objection, so ordered.
This markup is adjourned.
[Whereupon, at 1:59 p.m., the Committee was adjourned.]
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