[Congressional Record Volume 153, Number 145 (Thursday, September 27, 2007)]
[House]
[Pages H10994-H11008]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS INVESTMENT EXPANSION ACT OF 2007
The SPEAKER pro tempore. Pursuant to House Resolution 682 and rule
XVIII, the Chair declares the House in the Committee of the Whole House
on the state of the Union for the consideration of the bill, H.R. 3567.
{time} 1656
In the Committee of the Whole
Accordingly, the House resolved itself into the Committee of the
Whole House on the state of the Union for the consideration of the bill
(H.R. 3567) to amend the Small Business Investment Act of 1958 to
expand opportunities for investments in small businesses, and for other
purposes, with Mr. Kind in the chair.
The Clerk read the title of the bill.
The CHAIRMAN. Pursuant to the rule, the bill is considered read the
first time.
The gentlewoman from New York (Ms. Velazquez) and the gentleman from
Ohio (Mr. Chabot) each will control 30 minutes.
The Chair recognizes the gentlewoman from New York.
Ms. VELAZQUEZ. Mr. Chairman, I yield myself as much time as I may
consume.
Mr. Chairman, venture capital is the life blood of our Nation's small
businesses. Venture capital not only serves as the raw material for
economic growth and job creation, but also acts as fuel for the pursuit
of new ideas and innovation. Without it, businesses cannot expand, and
even the best ideas wither and die in what has come to be known as the
``Valley of Death'' between setup and commercialization. Clearly, our
Nation's 26 million entrepreneurs depend upon this resource, and yet
despite its obvious importance, venture capital remains elusive to the
vast majority of small businesses.
The Small Business Investment Expansion Act of 2007 is a bipartisan
effort introduced by Mr. Altmire and Mr. Graves. This legislation
signifies our commitment to helping small businesses receive the
venture capital that is vital to economic growth, innovation and job
creation; and I rise in support of this bill.
Perhaps no Federal agency is better positioned to meet the challenges
of small business investment than the Small Business Administration.
Since 1958, the SBA's investment programs have helped hundreds of small
businesses and have contributed to the success of several of our
Nation's notable companies, including Apple Computer, Federal Express,
Staples, and Costco. Unfortunately, the SBA's programs have suffered
the effects of mismanagement, flat funding and neglect in recent years.
By the SBA's own estimates, the total unmet need for early-stage equity
financing for small businesses is approximately $60 billion each year.
Additionally, it has been identified that the greatest equity capital
financing need of small businesses is financing in the amount of
$250,000 to $5 million.
While new investment strategies possess the potential to make a
significant
[[Page H10995]]
impact on unmet capital needs of start-up businesses, they have not
been fully leveraged for the benefit of our Nation's entrepreneurs. The
new market's venture capital program has also not achieved its full
potential. And perhaps most notably, unreasonable and outdated policies
are still in use, and they restrict the free flow of venture capital
and other forms of investment to small firms.
{time} 1700
This policy has had an obvious impact on the ability of new
businesses to access venture capital. Over the past 5 years, there has
been a steady shift of venture capital away from newly formed
businesses toward later-stage businesses. In 2002, the SBA licensed 41
new SBIC funds, more than half of which focus on investment in early-
stage businesses. By contrast, in 2006, the SBA licensed only 10 new
SBIC funds, none of which were for investment in early-stage
businesses.
The Small Business Investment Expansion Act of 2007 represents an
important step toward revitalizing SBA's investment mission. This
legislation features a renewed focus on providing equity capital to
startup firms and businesses in low-income areas, two key sectors of
the small business community that have continued to face particularly
high barriers to securing venture capital. The bill will also establish
a new Angel Investment Program to fill the gap in seed capital that was
created by the elimination of the participating securities program.
H.R. 3567 touches on all aspects of the SBA's investment mission,
including the SBA's surety bonding program. This bill will provide
much-needed updates to this program and will introduce initiatives
aimed at increasing the number of businesses and bonding companies that
participate in the program. Our small businesses have always been the
incubators of innovation, and investment has been the fuel for this
great engine of American economic development. As we continue to rely
on entrepreneurs to spur economic growth and create jobs, the need for
venture capital will only continue to grow. This legislation ensures
that small businesses will have the resources they need to remain
competitive and successful while ensuring that SBA's programs are the
premier source for small business capital.
For these reasons, H.R. 3567 has the support of the National Venture
Capital Association, the Value Technology Industry Organization, the
Surety and Fidelity Association of America and the American Insurance
Association.
Mr. Chairman, I strongly urge my colleagues to vote for the Small
Business Expansion Act of 2007, and I reserve the balance of my time.
Mr. CHABOT. I yield myself such time as I may consume.
Mr. Chairman, today I rise in support of H.R. 3567, the Small
Business Investment Expansion Act of 2007. Risk-taking and
entrepreneurship have been part of the American fabric since this
country's founding, whether it was emigres from France founding a
munitions company in the early years that would later become DuPont or
an immigrant peddler who would go on to create Lazarus stores in my
district, Cincinnati, now Macy's, or two Dayton, Ohio bicycle mechanics
who invented the airplane. The rise of America is replete with stories
of entrepreneurs taking risks to change the economy and ultimately the
world.
Recent history continues that trend. The most powerful computer
software company in the world, Microsoft, was created by two college
dropouts working out of a Seattle garage. Steven Jobs was tinkering in
his garage when he developed the computer that would lead to the
creation of the Apple. Fred Smith created Federal Express based on a
paper written for an undergraduate class at Yale. All of these
entrepreneurs succeeded because they had an idea and were able to raise
the money they needed to perfect and market that idea.
Yet, America has changed. Investors, venture capitalists, hedge
funds, and private equity firms use sophisticated global investment
strategies to maximize their returns. The budding entrepreneur with a
great idea today might get lost in the search by investors for a
company with a significant business history and record of returns. To
maintain America as the leader of innovative entrepreneurial firms, we
must ensure economic and fiscal policy that provides capital to
entrepreneurs.
There is little doubt that efforts of Congress, when Republicans
controlled it, to adopt tax policies that spurred investment and growth
provided significant incentives to invest in businesses. That is why I
would very much like to see those tax policies ultimately made
permanent, so we don't go back and raise taxes. But the Committee on
Small Business has heard that the market does not provide adequate
equity funding to the smallest of startup businesses, including those
that will become the next Dell Computer, Nike, Outback Steakhouse or
Callaway Golf Clubs. H.R. 3567 takes, in my view, a balanced approach
to ensure that these new businesses have access to capital. It balances
the need for limited Federal funding with fiscal restraint and protects
the Federal taxpayers.
Now, during the markup of this bill, I did voice strong objections to
title V as it was introduced. There are five titles in this particular
piece of legislation. Since markup of the legislation, however, to the
credit of the gentlewoman from New York, Nydia Velazquez, we worked
together and we negotiated in good faith and reached a bipartisan
agreement to address the concerns that we voiced. I believe that the
compromise that we reached adequately addresses my concern. I want to
again compliment the chairwoman for her leadership in that effort. It
eliminates some of the more egregious decisions of the SBA concerning
venture capital investment in small businesses while maintaining the
integrity of the Federal procurement process for small business by
preventing conglomerations of venture-owned firms to bid as small
businesses.
Mr. Chairman, in closing, I would again like to thank the chairwoman
for working in a bipartisan manner on this bill. I would also like to
thank her staff, particularly Michael Day and Adam Minehardt, for their
work on this important piece of legislation. I also want to thank Barry
and Kevin Fitzpatrick for their help, as well, on this bill.
Mr. Chairman, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Chairman, I yield 5 minutes to the gentleman from
Pennsylvania (Mr. Altmire). He is the chairman of the Small Business
Subcommittee on Investigations and Oversight and the leading sponsor of
this bill.
Mr. ALTMIRE. Mr. Chairman, I thank the chairwoman, Ms. Velazquez, for
her assistance in putting together the Small Business Investment
Expansion Act. I appreciate the opportunity I have had to work with Mr.
Chabot and Mr. Graves, to work with both of them to produce a
bipartisan bill that will benefit small businesses across this country.
Their input was invaluable, and I thank each of them for their
leadership.
I represent a district that extends north of Pittsburgh which is home
to world-class universities. Western Pennsylvania has thousands of
small business innovators who are doing cutting-edge research and
development in the life sciences. Western Pennsylvania's entrepreneurs
have created numerous success stories; however, many of these companies
did not become success stories overnight. Each of them had their
challenges. Unfortunately, thousands of small businesses are formed
each year that are unable to take that next step and overcome the
capital expenses necessary to keep their businesses afloat during the
early going.
Part of the problem resides within the Small Business
Administration's investment programs. The current Small Business
Investment Act was written in 1958 and simply did not envision the type
of capital environment that exists today in the 21st century. This
antiquated law has led to inefficiencies in the SBA that contribute to
an annual shortfall of $60 billion in unmet capital needs for American
small businesses. Small businesses often require an infusion of private
investment to purchase additional assets, such as equipment, office
space and personnel. But the private investment can be difficult to
acquire.
To address the substantial unmet capital needs of small businesses in
western Pennsylvania and across the country, I introduced the bill we
are
[[Page H10996]]
debating today, the Small Business Investment Expansion act. My bill
will improve the environment for small businesses by expanding access
to two vital sources of investment: venture capital and angel
investments. Not only do small businesses require investment capital,
they also require support that will allow them to do research and
development. Current regulations prohibit a number of these small firms
from qualifying for support offered through Federal initiatives due to
their venture ownership. With this legislation, we can create a fix
that reflects the reality of today's climate, that there are many small
companies entering into industries that depend on this type of
investment as their primary financing option.
Small businesses are the backbone of our economy. It is critical that
the Federal Government do more to connect these small firms with the
capital investment required for them to succeed. This bill modernizes
the SBA's investment programs and creates an environment that
facilitates the flow of capital to small businesses. This bill will
create jobs, grow the economy, and help thousands of entrepreneurs grow
from startups into thriving small businesses.
Mr. Chairman, for that reason, I strongly support this bill. I
encourage my colleagues to vote for it.
Mr. CHABOT. Mr. Chairman, I reserve the balance of my time.
Ms. VELAZQUEZ. I yield 2 minutes to the gentlewoman from Pennsylvania
(Ms. Schwartz).
Ms. SCHWARTZ. Mr. Chairman, I rise to express my support for the
Small Businesses Investment Expansion Act and to commend my colleague
from Pennsylvania for his leadership on this issue. In particular, I
appreciate his work to include a provision that modernizes the
definition of a small business.
In today's economy, there are many small companies entering high
technology, capital-intensive industries that require significant
investment to bring their products to market. I have seen this
firsthand in my home State of Pennsylvania, which is a national leader
in biotechnology initiatives. The biosciences have had a significant
economic impact on Pennsylvania's economy with more than 125
biopharmaceutical companies and 2,000 bioscience-related companies
calling the Commonwealth of Pennsylvania their home. These companies
are developing groundbreaking therapy, devices, diagnostics and
vaccines that really will treat once-untreatable diseases and
debilitating conditions, providing hope for millions of people.
But developing new cures is not cheap. It often takes 10 years or
more and costs hundreds of millions of dollars to bring a new treatment
to market. This means that new bioscience companies can experience
years of large cash outlays before they have the opportunity to cover
their costs and repay their loans, let alone realize any profit.
As the author of a comprehensive proposal, the American Life Sciences
Competitiveness Act, I have identified a number of actions that this
Congress can and I hope will take to improve access to capital for this
life-saving research and product development.
I am pleased to lend my support to this bill before us today that
would correct the outdated SBA regulations that currently preclude
these small businesses, even those with only a handful of employees,
from receiving assistance because they rely on venture capital to fund
their work. It is time to enable these American small businesses, which
are such a vital part of our Nation's economic growth, to compete for
Federal grants and other small business assistance so they may pursue
cutting-edge technologies and products that will benefit us all.
Mr. CHABOT. I yield 4 minutes to the gentleman from Missouri (Mr.
Graves) who has been one of the two principal sponsors of this
important legislation.
Mr. GRAVES. Mr. Chairman, I first would like to thank Ranking Member
Chabot and Chairwoman Velazquez for moving forward with this bill.
Mr. Chairman, this bill is critically important to small businesses.
I am glad I could be a part of this very important process. Small
businesses are the backbone of our economy. Access to capital is
essential to their survival and growth. I want to thank you for your
support and thank them for their support on these provisions.
I also want to note the bipartisan nature of how the Small Business
Investment Expansion Act passed through committee and is here before us
on the House floor. Some initial concerns were brought up over the
legislation. I am pleased to report that those concerns have been
resolved due to the open and transparent manner in which this bill is
being considered.
Lastly, I would like to thank the staffs of Chairwoman Velazquez and
Ranking Member Chabot for all their hard work on this issue. This bill
has been a work in progress for roughly 3 years. I appreciate all the
work that they have done on my behalf. This is a very important issue
to me, my constituents, and small businesses everywhere. I am very glad
to see it before the House today.
The Small Business Investment Expansion Act improves small business
access to capital. Whether it is from the Small Business
Administration, SBA, or through private investment, capital helps small
companies bring their products to market and succeed. With an economy
dependent on the success of small companies and firms, it is essential
to pass this legislation.
I want to speak to title V of this bill for a brief moment. The
language included in this title deals with the SBA affiliation rules
and has been an issue of utmost importance to my constituents and to me
over the past few years. Private investment in small business is a good
thing and should be encouraged, not discouraged. The language will
exclude the employees of these private investors when determining the
size of a small business, thus allowing them continued access to
important programs under the SBA.
{time} 1715
This is important because many small firms and capital intensive
fields rely on private investment to continue the very promising
research and development that has attracted such development. The SBA
has a number of programs that have proven vital to the success of small
businesses and want to ensure our small businesses have continued
access to them.
American innovation is what drives this country and its economy, and
as Members of Congress we need to create an environment that will keep
American innovation at the forefront of the global market. As a member
of the Small Business Committee, I work to advocate on behalf of small
businesses. The passage of this bill is a tremendous help to the
competitiveness of those small firms, which is why I support its
passage.
Again, I would like to thank the chairwoman and ranking member.
Ms. VELAZQUEZ. Mr. Chairman, I would like to say to the gentleman,
Mr. Graves, thank you so much for the work that you have done with the
committee to work in a bipartisan manner to address the issues that are
important to small businesses in this country. Your input and
collaboration in putting together this legislation is greatly
appreciated.
Mr. Chairman, I yield 2 minutes to the gentleman from Ohio (Mr.
Ryan).
Mr. RYAN of Ohio. Mr. Chairman, I thank the gentlewoman and also want
to lend my support to this fine piece of legislation. I also thank the
gentleman from Ohio (Mr. Chabot). This is something that many areas of
our country need. Those areas that once thrived in the Industrial Age
and are trying to recreate their economy need the kind of early capital
that this bill is going to put into these small firms.
The gentleman from Pennsylvania who was here earlier, Mr. Altmire,
and I are trying to create a Technology Belt between Cleveland, Akron,
Youngstown, and Pittsburgh. We have many early startup companies that
need the venture capital that they are going to be able to access, in
particular in the New Market Venture Capital Program, which will allow
low-income areas to expand the reach for more capital to go in there,
also the office of Angel Investment, where we have public-private
partnerships so that those early startup companies will have that early
capital that they need. Tax cuts for the top 1 percent don't get to
these businesses. We need that early capital in order to grow them
In Ohio, for example, we have a company in Cleveland called
BioEnterprise.
[[Page H10997]]
Over the past 5 years they have brought in over $500 million in venture
capital, 80 percent of it from outside of the State of Ohio. They
employ 20,000 people in northeast Ohio. The hardest thing for them to
do is to get that early venture capital. That's what this bill does.
So I want to thank the gentlewoman, I want to thank the gentleman
from Ohio and also the gentleman from Pennsylvania for putting this
together. We are giving life and hope and opportunity to those areas of
the country that are trying to retool their economy. This is going to
allow us to do this, whether it's medical device technology, any kind
of medical technology that may be coming up, advanced manufacturing.
These are the kinds of programs that we need.
So I want to thank everyone again for putting so much effort into
this bill and being so thoughtful. These are the kinds of things that
are going to help us create a strong, vibrant economy in the United
States and in the industrial Midwest.
Mr. CHABOT. Mr. Chairman, I continue to reserve my time.
Ms. VELAZQUEZ. Mr. Chairman, I yield such time as she may consume to
the gentlewoman from California (Ms. Woolsey) for the purpose of
entering into a colloquy.
Ms. WOOLSEY. Mr. Chairman, I rise today to engage in a colloquy with
the chairwoman. I thank her for agreeing to do this with me.
Madam Chairman, there has been a concern expressed from some voices
in the small business community that title V of this bill will open up
small business Federal contracts to be taken advantage of by large
corporations and venture capital firms. If this is true, it's obviously
a concern, because it would directly cut against the intent of this
bill.
Can the chairwoman please explain to me the protections in this bill
that she believes will prevent large corporations and venture capital
firm from abusing the intent of the bill?
Ms. VELAZQUEZ. Mr. Chairman, I thank the gentlewoman from California
for bringing up these concerns. The Small Business Committee is a
champion of small business and, as such, has strong protections built
into this bill to prevent large corporations and venture capital firms
from unfairly benefiting from Federal small business contracts.
You will be pleased to know that eligible VCs cannot have more than
500 employees, they cannot be controlled by a large corporation, and
they must be based in the United States. In addition, an amendment by
Mr. Chabot has been made in order under the rule that will even further
strengthen these protections by adding a requirement that no VC can own
more than 50 percent of any eligible small business.
I am confident that these provisions will protect the intent of this
bill and prevent large corporations or venture capital firms from
taking advantage of these programs.
Ms. WOOLSEY. I thank the gentlewoman. There seem to be adequate
protections in this bill to ensure small businesses are the ones
getting these contracts and that they aren't unfairly influenced by
large capital firms.
Again, I thank the Chair for engaging in this colloquy with me.
Ms. VELAZQUEZ. I yield 2 minutes to the gentleman from Washington
(Mr. Inslee).
Mr. INSLEE. Mr. Chairman, I would like to express my support of this
bill and congratulate the Chair for her great work.
Mr. Chairman, there's a lot of great news in this bill: updating the
definition of small business for today's realities, taking care of
small companies that are entering into high-technology capital-
intensive industries. Many of these small companies are based in my
home State of Washington. There's over 200 biotechnology and medical
device companies. They are developing cures for debilitating diseases;
they are improving the Nation's biodefense system.
Mr. Chairman, 44 percent of these companies have been formed just in
the last 5 years, and they obviously rely heavily on venture capital.
Unfortunately, there's some outdated SBA regulations that currently
preclude small businesses, even though with a handful of employees,
from receiving assistance simply because they rely on venture capital
funds for their R&D.
I want to thank the chairwoman for including as a solution to this a
provision that will correct this unwise discrimination that is now
going on against small businesses that are so dependent on venture
capital funding. Today, these companies will again be able to compete
for grants and receive other small business assistance because of a
provision in this bill. I have been working on a legislative solution
for quite a while, so I am very happy to see this fixed today.
We are happy to see the American Dream is going to be helped by this
bill. I want to thank the chairwoman again. I look forward to future
success.
Mr. CHABOT. Mr. Chairman, I have no further speakers.
I just want to again thank the chairwoman for her cooperation in
drafting what is essentially, I believe, a very good bill, which will
improve small business' ability to have access to capital all across
the country.
Without further ado, I yield back the balance of my time.
Ms. VELAZQUEZ. Mr. Chairman, I just would like to take this
opportunity to thank the staff that worked on this bill. From Mr.
Altmire's office, Cara Toman; from Mr. Graves' office, Paul Sass; and
from the minority staff, Barry Pineless. From the majority, I would
like to thank Adam Minehardt and Andy Jiminez.
Mr. Chairman, I strongly urge my colleagues to vote for the Small
Business Investment Expansion Act of 2007.
Mr. LOEBSACK. Mr. Chairman, I rise today in strong support of the
Small Business Investment Expansion Act.
Today's small business owners are leaders in job creation and
economic development not only in Iowa, but across the country. Small
businesses create 80 percent of new jobs in the United States, and they
make up 97 percent of United States exporters. They are truly the
backbone of our Nation's economy.
Many of Iowa's communities are built upon the strength of small
businesses, and ensuring that entrepreneurs have the resources and
tools their businesses need to thrive is critical to their success.
Yet access to capital is an increasingly common concern for new
business owners. The Small Business Investment Expansion Act takes
vital steps to reverse this trend. By increasing access to loans,
capital, and Angel investors, this bill ensures that the Small Business
Administration is an effective partner for our Nation's small
businesses.
It overhauls the Small Business Investment Company and the New
Markets Venture Capital program to improve the efficiency of their
resources for fledging enterprises. The Small Business Investment
Expansion Act also creates a new Angel Investment program to provide
seed financing to new businesses through public-private partnership.
Through these changes, as well as renewed investments in under-served
areas, this bill will provide small businesses with critically needed
support.
Small business owners are leaders in their communities, and
innovative support programs are essential tools that help them to
flourish. In my district, the Economic Development Center was
established to help small businesses grow and succeed not only in
Iowa's Second District, but across the State. To date, the EDC has
assisted over 300 entrepreneurs; raised over $6 million in capital for
its businesses; and helped to generate over $30 million for the region
through the success of its businesses. In turn, EDC businesses created
over 200 new jobs.
I am a proud advocate of the Economic Development Center, and I
believe that the Small Business Investment Expansion Act will help
organizations such as the EDC to be even more effective partners with
Iowa's--and our country's--small businesses.
Mr. HONDA. Mr. Chairman, I rise to express my support for H.R. 3567,
the Small Business Investment Expansion Act. In particular, Title V of
the Small Business Investment Expansion Act modernizes the definition
of a small business so that it reflects current reality. In today's
economy, there are many small companies entering high technology,
capital-intensive industries that receive venture capital investment.
Many of these small companies are based in my home State of
California. California is one of the most innovative States in the
country, with the San Francisco Bay area as the birthplace of the
biotechnology industry. From 2000 to 2003, California biotech companies
developed 32 breakthrough drugs, and over 600 new therapies are
currently in the research and development pipeline. Private investment
is the lifeblood of the biotechnology industry, and venture capital
investment in life sciences typically outpaces investment in any other
industry. This venture capital investment
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allows small biotechnology companies to pursue breakthrough
technologies--from developing cures for debilitating diseases to
creating alternative energy sources.
Also concentrated in my Silicon Valley district, the burgeoning
nanotechnology industry has been predicted to be a $1 trillion market
by the year 2017. Many of these small, innovative nanotech companies
rely on venture capital investments to support their heavy costs of
startup and basic research and development. In 2005, the Blue Ribbon
Task Force on Nanotechnology that I commissioned to advise me on ways
to promote the development and sustainability of the nanotechnology
industry recommended expanding Small Business Innovation Research
eligibility in the same way as Title V of H.R. 3567.
Unfortunately, the outdated U.S. Small Business Administration
regulations currently prevent small businesses from receiving
assistance if they rely on venture capital to fund their R&D. Often
some of the most important breakthroughs these companies make are a
result of the riskier work they do, which only federal funding for
small business research can enable. H.R. 3567 will correct this unwise
discrimination against small businesses that receive venture capital
funding so that these companies will again be able to compete for
grants and receive other small business assistance.
By making this important change to the SBA regulations, the House
will be moving forward on another piece of our Innovation Agenda and
helping to keep America a leader in the global marketplace. I thank my
colleague Mr. Altmire for introducing this bill; Chairwoman Velazquez
and Ranking Member Chabot for moving it through their committee; and
Majority Leader Hoyer and Speaker Pelosi for bringing this bill to the
floor. I urge my colleagues to vote in favor of H.R. 3567.
Mr. HOLT. Mr. Chairman, I rise today in support of H.R. 3567 the
Small Business Investment Expansion Act.
Much of the economic success that we enjoy as a Nation is the result
of innovation and development by America's small business community.
Almost half of Americans working in the private sector are employed by
small businesses. They are responsible for over 45 percent of our
national payroll and have created 60 to 80 percent of new jobs over the
last 10 years.
Since it was created in 1953, the Small Business Administration, SBA,
has played an essential role in maintaining and strengthening the
Nation's economy by aiding, assisting and protecting the interests of
America's small businesses. However, there is an expanding gap between
the assistance that the SBA's programs are able to provide and the
capital needs of small businesses.
The legislation before us today will help to close this gap by
expanding and improving two of the SBA's most successful programs, the
Small Business Investment Company and the New Markets Capital Program.
As a public-private partnership the Small Business Investment Company
program stimulates and supplements the flow of private equity capital
and long term loan funds for the sound financing, growth, expansion and
modernization of small business operations. This program was able to
leverage more than $21 billion to 2,000 small businesses in the last
year alone; however more could be done to improve access to this
program. This legislation will expand access for early-stage and
capital-intensive small businesses by simplifying how maximum leverage
caps are calculated and revising the limitation on aggregate
investments. H.R. 3567 will also expand access to the New Markets
Venture Capital program that provides entrepreneurial expertise and
equity capital to small businesses in low-income regions. This
legislation not only expands the programs but provides incentives for
investors to invest in small manufacturing companies.
Additionally, H.R. 3567 will create a new office within the SBA to
help start-up of companies find investors to support them in their
early stages of growth, the Office of Angel vestment. This legislation
will focus on three main initiatives: providing angel groups with
matching financing leverage, create a federal directory of angel
investors, and funding for awareness and educational programs about
angel Investment opportunities.
Small businesses make up the engine that drives our economy. The
legislation before us today will give small businesses the tools that
they need to succeed. I therefore encourage my colleagues to support
this legislation.
Mr. MANZULLO. Mr. Chairman, I rise in reluctant opposition to the
Small Business Investment Expansion Act of 2007, H.R. 3567. The non-
partisan Congressional Budget Office, CBO, estimates that this bill
will cost $102 million over the next 5 years. Thus far this year, the
CBO estimates that the Democrat-controlled House Small Business
Committee has authorized $5.9 billion in new spending over the next 5
years--$1.55 billion in fiscal year 2008 alone. To put this massive
spending increase in perspective, the Fiscal Year 2008 Financial
Services Appropriations bill, H.R. 2829, provides $582 million in total
spending on the SBA in FY 08.
In the past, legislation dealing with programs in the Small Business
Investment Act operated under the assumption that the bill should not
cost the taxpayer any new money. I am proud that the Republican-led
Congress took the Small Business Investment Company, SBIC, program to
``zero-subsidy,'' funded solely by user-fees, first with the debenture
program in 1996 and then the participating securities program in 2001.
I regret that because of the downturn in the markets earlier this
decade, the participating securities component of the SBIC program,
which targeted equity investments in early stage small businesses, has
become essentially insolvent and defunct since 2005. During the 109th
Congress, I tried numerous ways in my capacity as chairman of the House
Small Business Committee, to thread the needle to reopen the
participating securities program while still keeping it at ``zero
subsidy.'' However, H.R. 3567 abandons fiscal restraint by creating yet
another new program to promote equity investments in early stage small
businesses.
First, CBO estimates that the creation of the Angel Investment
Program in Title III of H.R. 3567 will cost $57 million over the next 5
years. While there is a provision that requires an angel group repay
any investment it receives, the repayment comes solely out of any
profit the group receives. But what if the angel group makes no money?
Then the taxpayer is left holding the bag. This is a departure from the
regular SBIC program where upfront fees are also charged, in addition
to retaining a share of the profits, to help offset the cost of the
program.
The bill creates yet another new office and more bureaucracy at the
Small Business Administration, SBA, to promote angel investments in
early stage small firms. It also spends $1 million to create a Federal
angel network to collect and maintain information on local and regional
angel investors that is readily available over the Internet, e.g.,
www.bandofangels.com. H.R. 3567 also spends $1.5 million to create yet
another grant program to increase awareness and education about angel
investing, heaping potentially yet another mission upon the already
stretched Small Business Development Center, SBDC, program. Earlier
this year, the House passed three SBDC-related bills that created nine
new programs for them to implement.
Last year, I held a hearing on the Small Business Committee to listen
to the leading experts on the angel movement. At the time, the
committee debated similar angel legislation, H.R. 4565, offered by
Democrats to what is on the floor today. All the witnesses except the
one called by the Democrats testified that because of the decentralized
and informality of angels, a tax credit modeled after what exists in
many states is far more preferable to creating yet another office and
program at the SBA to promote angel investments. This is what the
leading experts in the angel movement said about the ideas contained in
H.R. 4565, which is now Title III of H.R. 3567, at the May 10, 2006,
Small Business Committee hearing:
Dr. Ian Sobieski, founder and managing director of the Band of
Angels: ``I would be wary of any kind of government interaction with
angel groups because of the danger of perturbing a natural market
process that is still good for it. The tax credit changes the
environment in which capital decisions are being made . . . The danger
in . . . data collection is the implied authority by which it is
collected. If the Federal Government gets involved in collecting data
(on angels) that has the imprimatur of the United States Government,
that speaks with great weight.''
Susan Preston of Davis, Wright Tremaine LLP: ``. . . the vast
majority of investments by angels are done by individuals, not members
of angel groups. These are highly independent autonomous anonymous
individuals that don't want their name in databases and aren't
interested, for the most part, in joining groups.''
I simply don't understand why this Democratic-led Congress ignores
the advice of angel experts to direct the SBA to provide capital to
extremely wealthy individuals to support investments they probably
would make anyway. I'm also surprised that this Democratic-led
Congress, which routinely criticizes the SBA for its alleged
incompetence, would add another yet another mission to its
responsibilities. That's why I was proud to join Representative Earl
Pomeroy of North Dakota in reintroducing the alternative to this
government-run approach--the Access to Capital for Entrepreneurs, ACE,
Act of 2007, H.R. 578--to keep decisions on angel investments at the
individual and local level.
Second, I also have concerns about Title II of H.R. 3567 that
dramatically expands the New Markets Venture Capital, NMVC, program and
opens up the Federal Government to more exposure. The CBO estimates
that Title II raises the subsidy or exposure rate to 17 percent and
will cost the taxpayer $11 million over the next 5 years. The mission
of the
[[Page H10999]]
NMVC is to promote venture capital investments in economically
distressed communities in both urban and rural America. However, I
believe the NMVC program is already a triplicate of two other programs
that already exists--the regular SBIC program and the Rural Business
Investment, RBIC, program at the U.S. Department of Agriculture, USDA.
Of the 2,299 U.S. small businesses that received SBIC financing in
fiscal year 2005, 23 percent were located in Low- and Moderate-Income
(LMI) areas of the country. Those LMI-district companies received $543
million or 19 percent of the total $2.9 billion invested by SBICs in FY
2005. Also, 30 percent of SBIC investments were made in small U.S.
manufacturers. For the period FY 2001 through FY 2005, SBIC investments
in small manufacturing companies totaled $4.3 billion. In addition, the
USDA runs the RBIC program in cooperation with the SBA to promote
equity investments in rural areas. Thus, I see no need expand a program
to help small businesses that are already being assisted by two other
government programs.
Third, I object to reinstating taxpayer funding for the surety bond
program. This program is important to help small businesses, primarily
small construction firms, win federal government contracts by offering
a bond to guarantee that the work will be completed. To cover the costs
of those guarantees, fees are paid to the SBA by both the contractor
receiving the guarantee and the surety or insurance company that issues
the bond for the contractor's performance. In fiscal year 2006, the SBA
provided guarantees under the surety bond program for about 5,000 small
businesses and collected about $7 million in fees. Section 405 of H.R.
3567 eliminates fees that are currently charged to contractors and
sureties. That's why the CBO estimates Section 405 will cost the
taxpayer over the next 5 years.
Mr. Chairman, there is no need to do this. During my tenure as
chairman of the Small Business Committee, I never heard from a small
business complaining about fees charged in the surety bond program.
This could develop into a problem for the Federal Government when small
businesses, which have no financial stake in their surety bond and thus
have nothing at risk if they default, do not complete the contract. I
predict that there will be more broken contracts and uncompleted work.
Section 405 also sets a precedent to do away with the ``zero'' subsidy
policy in other SBA programs, such as in the 7(a) loan guarantee
program.
But the most egregious provision in H.R. 3567 is the revamping of
small business size standards in Title V. This provision allows
companies not independently-owned and operated but controlled by
venture capital, VC, investors to still be considered as a small
business in the eyes of the Federal Government. Title V will allow
large businesses and universities that establish a VC to potentially
game the system to benefit from not just various SBA technology
programs but every other SBA loan and procurement assistance program.
It could even complicate the Regulatory Flexibility Act, which requires
Federal agencies to take into account the interests of small businesses
during the development of new regulations. When I was chairman of the
Small Business Committee, I was proud of the bipartisan support I
received in eliminating big businesses from participating in various
federal small business programs. This led the SBA to finally clamp down
on this abuse and issue new regulations and policies to do away with
this practice. However, I fear that many of my colleagues have not
fully thought through the implications of this provision. Title V would
undo all the bipartisan work done on this issue over the past five
years.
In particular, I spent a lot of time and effort trying to solve the
specific problem of the eligibility of some small businesses with
venture capital investments to participate in the Small Business
Innovative Research, SBIR, program at the National Institutes of
Health, NIH. The SBIR program guarantees that at least 2.5 percent of
Federal research and development, R&D, dollars must go to small
businesses. After the Defense Department, the NIH is the second-largest
spender of R&D funding in the Federal Government.
Title V tries to solve a problem that is grossly exaggerated. It is a
myth that small businesses with VC investments are unable to
participate in the SBIR program at NIH because of a misinterpretation
of the law by the SBA. In an impartial Government Accountability
Office, GAO, study that I requested, they discovered that 17 percent of
NIH SBIR awards, accounting for 18 percent of the dollar value, went to
small business with VC investments in fiscal year 2004. These small
firms had no problem in complying with SBA guidelines. Nevertheless, I
tried to proffer a compromise that would have established a 2-year
pilot program to set-aside 0.5 percent of NIH R&D funding, over-and-
above the 2.5 percent currently set-aside for small businesses, for
these firms that receive a preponderance of their funding from VCs and
do not own or control their company. Unfortunately, my compromise was
rejected by NIH and by the biotech and VC industries. However, the
solution contained in Title V is a dramatic overreach in the effort to
solve this specific problem with NIH.
The amendment offered by my good friend and colleague, Representative
Steve Chabot of Ohio, is a good step forward. It prohibits any one
single VC from owning a small business that wishes to benefit from a
SBA program. However, I can easily envision a situation where two VCs
with common ownership but with different board of directors could game
the system and still be eligible for SBA programs. Because even the
largest VCs have less than 500 employees, Title V--even as changed by
the Chabot amendment--would open up SBA programs to large businesses
and universities.
In particular, I am concerned about the future of the SBIR program.
It's important to remember that when the SBIR program was created 25
years ago, it was because of the frustration that federal research and
development dollars went only to large businesses and universities.
Even under current law, only 2.5 percent of all Federal R&D dollars is
set-aside for small business. But Title V allows large universities
that establish a VC to participate in the SBIR program. This provision
will further decrease Federal R&D dollars going to independently owned
and operated small high technology firms.
Mr. Chairman, I enclose for the record the Statement of
Administration Policy in opposition to this bill plus two letters from
the oldest small business association in America--the National Small
Business Association; a letter from the nation's only association that
represents small high technology firms--the Small Business Technology
Council; and a letter from the world's largest business federation--the
U.S. Chamber of Commerce. I urge my colleagues to heed the
recommendations of the administration and these business associations
by voting against H.R. 3567.
Executive Office of the President, Office of Management
and Budget,
Washington, DC, September 26, 2007.
Statement of Administration Policy
H.R. 3567--small business investment expansion act of 2007
The Administration strongly opposes House passage of H.R.
3567.
The Administration strongly opposes the proposed ``Angel
Investor'' program. The Administration does not support
providing capital to high net worth individuals to support
their investments. The best way to strengthen small business
is through an economic framework that encourages investment
at all levels through broad-based and reasonable tax rates
and reduced regulatory impediments to the flow of capital.
This approach will have a more significant impact than any
targeted program.
The Administration also strongly opposes the proposed
change to the definition of a small business for the purposes
of venture capital investment. This redefinition strips the
elements of independent ownership and control that identify
small business ownership under current law. Not only would
this change be inequitable for actual small businesses, but
it would be a step backward from our recent progress in
addressing the misidentification of large firms as small
businesses for Federal procurement purposes. By eliminating
the concept of affiliation for venture capital operating
companies, the provision would allow large businesses, not-
for-profit organizations, and colleges and universities to
own and control small businesses and benefit from programs
designed for independent small businesses. The Administration
believes that the intent of this provision is to allow for
reasonable, non-controlling investment in small business.
Unfortunately, the current language is overly broad, and the
Administration strongly opposes this provision unless it is
amended to ensure that ownership and control rests positively
with the entrepreneur.
____
National Small
Business Association,
Washington, DC, September 25, 2007.
Hon. Donald A. Manzullo,
House of Representatives,
Washington, DC.
Dear Representative Manzullo: The U.S. House of
Representatives soon will consider H.R. 3567, the Small
Business Investment Expansion Act of 2007. While supportive
of most sections of H.R. 3567--believing that they provide
necessary and overdue improvements to three of the Small
Business Administration's investment programs--and its aim of
helping small businesses acquire needed capital, the National
Small Business Association (NSBA) cannot support the bill in
its current form.
Reaching 150,000 small-businesses across the nation, NSBA--
the country's oldest small-business advocacy organization--is
a member-driven association that advocates for the best
interests of the overall small-business community. Convinced
that Title V of the bill will gut over half a century of laws
that define a small business, NSBA urges Congress to remove
Title V from the measure or defeat the entire bill.
[[Page H11000]]
Since the Small Business Act was passed in 1953, a small
business has been defined as one that is: (1) independently
owned and operated, (2) not dominant in its field, and (3)
for-profit. This definition not only has controlled which
companies can access federal small-business programs, it also
has defined which firms are small for purposes of federal
regulatory compliance across a vast areas of banking,
securities, environmental, pension, and worker-safety laws.
Title V of H.R. 3567 would effectively repeal these
provisions, creating a new class of business conglomerates
that would be defined as small businesses despite meeting
none of the existing statutory requirements.
1. The ``independently owned and operated'' statutory test?
Gone.
Title V of H.R 3567 would prohibit the SBA from classifying
any venture capital (VC) company as a large business as long
as the VC firm had fewer than 500 employees--no matter how
many ``small'' businesses the VC firm controlled. It is
important to note that virtually no VC firm in the country
has more than 500 employees.
Under Title V of H.R. 3567, a VC firm could create a
conglomerate controlling 1000 small companies, employing
100,000 people, and generating billions in revenue, and the
SBA and other federal agencies would be forced to treat each
company in the conglomerate as a small business as long as it
had fewer than 500 employees. Banking regulators, securities
regulators, environmental regulators, and all other kinds of
federal regulators that base their definition of ``small'' on
Section 3 of the Small Business Act would be prohibited from
considering the overall number of employees or revenue of the
VC firm.
2. The ``not dominant in its field'' statutory test? Gone.
The VC conglomerates could include, for example, nearly
every company capable of bidding on a government contract
that had been set aside for small business. Yet the SBA and
other federal contracting agencies would be forced to
classify the companies in the conglomerate as ``small.''
Conceivably, the VC conglomerates also could own every single
company producing a specific product, service or technology,
and the federal government still could be forced to classify
each of these companies as ``small'' businesses. This is an
especially galling notion in the wake of years of controversy
over large companies receiving government contracts intended
for small businesses.
3. The ``for profit'' statutory test? Gone.
Title V of H.R. 3567 would allow universities to control
unlimited numbers of small companies and still classify all
such businesses as ``small.'' Yet the true owners would be
non-profit universities, many of them with endowments worth
hundreds of millions of dollars or more. Such a scenario
would hardly help level the playing field for the majority of
small businesses.
Supporters of Title V of H.R. 3567 contend that the bill
prevents big businesses from controlling these venture
capital firms. This mayor may not be true. It does not
matter. The bill encourages the venture capital firms
themselves to become big businesses--and then to claim to be
small. Acting together, these conglomerates could put truly
independent companies at competitive disadvantages in nearly
every situation that mattered.
If Title V of H.R. 3567 passes, everything in federal law
that is premised upon section 3 of the Small Business Act--
including dozens of laws and hundreds of court cases--will be
called into question. Thousands of pages of federal
regulations will be rendered moot. Utilizing this legal
vacuum, the new VC conglomerates would be empowered to abuse
all manner of government regulations and programs by claiming
to be small businesses.
In sum, this legislation violates a fundamental trust. It
would eviscerate the very concept of a small business as
Congress and the American people understand it. There would
be no limits on the capital, the labor, and the financial
resources that the VC conglomerates could control and still
be treated as ``small businesses.'' Every law that Congress
has enacted over the past half century to aid small
businesses would become little more than a ``speed bump'' as
a new category of big businesses raced in to seize the
protections and advantages intended for small businesses.
NSBA urges Congress to strike Title V from H.R. 3567 or to
defeat the bill entirely. If Title V is struck, NSBA will be
pleased to support the measure.
Sincerely,
Todd O. McCracken,
President.
____
National Small
Business Association,
Washington, DC, September 27, 2007.
Hon. Donald A. Manzullo,
House of Representatives,
Washington, DC.
Dear Representative Manzullo: Today, the U.S. House of
Representatives is scheduled to consider H.R 3567, the Small
Business Investment Expansion Act of 2007. Convinced that it
will divert money Congress intended for actual small
businesses to large companies masquerading as small
businesses, the National Small Business Association (NSBA)
strongly urges Congress to strike Title V from the bill or
defeat it. The well-intentioned amendment to be offered by
Rep. Steve Chabot also does not resolve the underlying
problems in Title V.
Reaching 150,000 small-businesses across the nation, NSBA
is a member-driven association that advocates for the best
interests of the overall small-business community. NSBA is
not alone in its opposition. In fact, no small-business
organization has publicly supported Title V. It is strongly
supported by the venture-capital and biotechnology community,
however--but isn't this supposed to be a small-business bill?
The Small Business Technology Council, a nonpartisan group
that represents small technology firms, also strongly opposes
Title V. In fact, in today's LA Times, its executive
director, Jere Glover, the former chief counsel for the SBA
Office of Advocacy in the Clinton administration, called it
``the worst piece of small business legislation I've seen in
25 years.''
The Statement of Administration Policy issued from OMB
states, ``By eliminating the concept of affiliation for
venture capital operating companies, the provision would
allow large businesses, not-for-profit organizations, and
colleges and universities to own and control small businesses
and benefit from programs designed for independent small
businesses.''
Title V of H.R. 3567 would prohibit the SBA from
classifying any venture capital (VC) company as a large
business as long as the VC firm had fewer than 500
employees--no matter how many ``small'' businesses the VC
firm controlled. It is important to note that virtually no VC
firm in the country has more than 500 employees.
Under Title V of H.R. 3567, a VC firm could create a
conglomerate controlling 1000 small companies, employing
100,000 people, and generating billions in revenue, and the
SBA and other federal agencies would be forced to treat each
company in the conglomerate as a small business as long as it
had fewer than 500 employees.
Are these the sorts of ``small businesses'' Congress had in
mind when it passed the Small Business Act in 1953? Are they
the kind of ``small businesses'' that need government
investment?
NSBA urges Congress to strike--not amend--Title V of H.R.
3567 or to defeat the bill. If Title V is struck, NSBA will
be pleased to support the measure.
Sincerely,
Todd O. McCracken,
President.
____
September 25, 2007.
Hon. Donald A. Manzullo,
House of Representatives,
Washington, DC.
Dear Representative Manzullo: On behalf of the Small
Business Technology Council, the nation's largest nonprofit
organization of small, technology-based companies in diverse
fields, I urge you oppose Title 5 of H.R. 3567, and to vote
against H.R. 3567 if that Title is included in the bill when
it comes to a vote on the House floor soon.
Title 5 of H.R. 3567 would encourage abuse of federal
government programs and protections intended for small
business.
H.R. 3567 would establish a new class of business holding
companies operated by groups of investors. These holding
companies (or conglomerates) would be incentivized to acquire
huge portfolios of small firms.
The key incentive: the federal government would have to
treat these holding companies as small businesses, no matter
how many businesses, employees, capital and resources they
controlled. All the holding companies would have to do is
have fewer than 500 employees themselves and keep each of the
acquired companies below 500 employees. There would be no
limit on the total number of companies and employees that the
holding companies could control.
Proponents of this sweeping--and largely unexamined--change
frequently state that certain SBA programs are unavailable to
small firms that have venture capital backing. That is
untrue.
SBA's only requirement for calling a business ``small'' is
that it meet certain size standards--generally, a cap of 500
employees. But SBA counts firms that are controlled by other
firms as one firm. That's what this bill would end. And once
that ends, large companies could demand access to small
business programs and small business regulatory treatment.
Today, large VC's and other investment companies (with more
than 500 employees, including affiliates and subsidiaries)
can control up to 49% of a firm that SBA classifies as
``small.'' Small investment companies and VC's (with fewer
than 500 employees, including affiliates and subsidiaries),
can control up to 100%.
So, despite what you may have heard, the problem is not
that firms with VC backing are ``kept out'' of SBA programs.
They aren't.
The real problem, from the point of view of some investment
companies, is that large companies cannot masquerade as small
companies for purposes of obtaining federal small business
benefits.
Big business trying to access small business programs is
not a new issue. It goes back decades. (Just recently,
Congress has criticized SBA for letting large companies
obtain federal procurement contracts intended for small
companies.)
This Congress should handle the small business/big business
issue with integrity, just as other Congresses have.
The only difference between H.R. 3567 and countless past
efforts by big businesses to slip into small business
programs is that this bill would encourage investment
companies themselves to become big businesses, while
prohibiting them from being ``controlled'' by other big
businesses. That's certainly a twist
[[Page H11001]]
on the usual approach, but it ends up in the same place--with
big companies pretending to be small in order to take
advantage of federal benefits intended for small business.
Moreover, the term ``control by a large business'' (as it
applies to these holding companies) is not defined in the
bill, so even that modest difference from past attacks by
large business may not amount to anything.
The worst feature of Title 5 is that it totally undermines
federal efforts to lower unnecessary the regulatory burdens
on small businesses. The holding companies incentivized by
H.R. 3567 would begin demanding to be treated as small
businesses for purposes of federal regulations, even though
they are--in commonsense reality--large companies. Since many
of these regulations are based on SBA's definition of what a
small business is--the very definition that the holding
companies propose to exempt themselves from--they would
presumably have to be treated as ``small'' for purposes of
these regulations--in such areas as environmental
regulations, pension regulations, securities regulations, and
the like. This would wreck decades of careful work by
Congress and federal agencies to protect small companies. It
would also cast doubt on many laws and court cases that are
based on the SBA definition of small business.
SBTC therefore strongiy urges Congress to strike Title 5
from H.R. 3567. With Title 5 removed, we will support the
bill. With Title 5 largely or totally intact, we will
strongly oppose the bill in total.
Regards,
Jere W. Glover,
Executive Director,
Small Business Technology Council.
____
Chamber of Commerce of the United States of America,
Washington, DC, September 27, 2007.
To the Members of the U.S. House of Representatives: The
U.S. Chamber of Commerce, the world's largest business
federation representing more than three million businesses
and organizations of every size, sector, and region, has
serious concerns with Title V of H.R. 3567, the ``Small
Business Investment Expansion Act of 2007,'' which is
expected to be considered by the House today.
Title V of H.R. 3567, if passed into law, would allow
changes to the longstanding definition of small business that
would permit larger business concerns to effectively control
and dominate small business enterprises while at the same
time allowing them to participate in small business programs.
This fundamental change could undermine the public policy
objectives of all of the small business resources and
programs authorized by Congress to foster innovation, growth,
and help to level the playing field for small businesses
within the marketplace.
Title V of H.R. 3567 would allow venture capital
conglomerates, colleges, and universities to have effective
control and ownership of an unlimited number of small
businesses while still falling under the definition of small
business for the purposes of using government resources and
programs meant for traditionally defined small businesses.
These new enterprises would not be subject to the affiliation
rules as they now apply to all existing business concerns. As
a longstanding advocate for small business, the Chamber
opposes creating a loophole in the law that allows the
unfettered growth of a conglomerate business enterprise that
will not be restricted by existing size-standards as
determined by affiliation rules and still be able to avail
themselves of services, resources, and programs that have
been dedicated to traditional small businesses.
For these reasons, the Chamber opposes Title V of H.R.
3567. The Chamber looks forward to working with Congress to
address these important concerns.
Sincerely,
R. Bruce Josten,
Executive Vice President,
Government Affairs.
Ms. VELAQUEZ. Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. All time for general debate has expired.
Pursuant to the rule, the bill shall be considered read for amendment
under the 5-minute rule.
The text of the bill is as follows:
H.R. 3567
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Small
Business Investment Expansion Act of 2007''.
(b) Table of Contents.--The table of contents for this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I--SMALL BUSINESS INVESTMENT COMPANY PROGRAM
Sec. 101. Simplified maximum leverage limits.
Sec. 102. Increased investments in women-owned and socially
disadvantaged small businesses.
Sec. 103. Increased investments in smaller enterprises.
Sec. 104. Simplified aggregate investment limitations.
TITLE II--NEW MARKETS VENTURE CAPITAL PROGRAM
Sec. 201. Expansion of New Markets Venture Capital Program.
Sec. 202. Improved nationwide distribution.
Sec. 203. Increased investment in small manufacturers.
Sec. 204. Updating definition of low-income geographic area.
Sec. 205. Study on availability of equity capital.
Sec. 206. Expanding operational assistance to conditionally approved
companies.
Sec. 207. Streamlined application for New Markets Venture Capital
Program.
Sec. 208. Elimination of matching requirement.
Sec. 209. Simplified formula for operational assistance grants.
Sec. 210. Authorization of appropriations and dedication to small
manufacturing.
TITLE III--ANGEL INVESTMENT PROGRAM
Sec. 301. Establishment of Angel Investment Program.
TITLE IV--SURETY BOND PROGRAM
Sec. 401. Study and report.
Sec. 402. Preferred Surety Bond Program.
Sec. 403. Denial of liability.
Sec. 404. Increasing the bond threshold.
Sec. 405. Fees.
TITLE V--VENTURE CAPITAL INVESTMENT STANDARDS
Sec. 501. Determining whether business concern is independently owned
and operated.
TITLE VI--REGULATIONS
Sec. 601. Regulations.
TITLE I--SMALL BUSINESS INVESTMENT COMPANY PROGRAM
SEC. 101. SIMPLIFIED MAXIMUM LEVERAGE LIMITS.
Section 303(b) of the Small Business Investment Act of 1958
(15 U.S.C. 683(b)) is amended--
(1) by amending paragraph (2) to read as follows:
``(2) Maximum leverage.--
``(A) In general.--The maximum amount of outstanding
leverage made available to any one company licensed under
section 301(c) of this Act may not exceed the lesser of--
``(i) 300 percent of such company's private capital; or
``(ii) $150,000,000.
``(B) Multiple licenses under common control.--The maximum
amount of outstanding leverage made available to two or more
companies licensed under section 301(c) of this Act that are
commonly controlled (as determined by the Administrator) and
not under capital impairment may not exceed $225,000,000.'';
and
(2) by striking paragraph (4).
SEC. 102. INCREASED INVESTMENTS IN WOMEN-OWNED AND SOCIALLY
DISADVANTAGED SMALL BUSINESSES.
Section 303(b)(2) of the Small Business Investment Act of
1958 (15 U.S.C. 683(b)(2)), as amended by section 101, is
further amended by adding at the end the following:
``(C) Increased investments in women-owned and socially
disadvantaged small businesses.--The limits provided in
subparagraphs (A)(ii) and (B) shall be $175,000,000 and
$250,000,000, respectively, for any company that certifies in
writing that not less than 50 percent of the company's
aggregate dollar amount of investments will be made in small
businesses that prior to the investment are--
``(i) majority owned by one or more--
``(I) socially or economically disadvantaged individuals
(as defined by Administrator);
``(II) veterans of the Armed Forces; or
``(III) current or former members of the National Guard or
Reserve; or
``(ii) located in a low-income geographic area (as defined
in section 351).''.
SEC. 103. INCREASED INVESTMENTS IN SMALLER ENTERPRISES.
Section 303 of the Small Business Investment Act of 1958
(15 U.S.C. 683) is amended by striking subsection (d) and
inserting the following:
``(d) Increased Investments in Smaller Enterprises.--The
Administrator shall require each licensee, as a condition of
an application for leverage, to certify in writing that not
less than 25 percent of the licensee's aggregate dollar
amount of financings will be provide to smaller enterprises
(as defined in section 103(12)).''.
SEC. 104. SIMPLIFIED AGGREGATE INVESTMENT LIMITATIONS.
Section 306(a) of the Small Business Investment Act of 1958
(15 U.S.C. 686(a)) is amended to read as follows:
``(a) If any small business investment company has obtained
financing from the Administration and such financing remains
outstanding, the aggregate amount of securities acquired and
for which commitments may be issued by such company under the
provisions of this title for any single enterprise shall not,
without the approval of the Administration, exceed 10 percent
of the sum of--
``(1) the private capital of such company; and
``(2) the total amount of leverage projected by the company
in the company's business plan that was approved by the
Administration at the time of the grant of the company's
license.''.
TITLE II--NEW MARKETS VENTURE CAPITAL PROGRAM
SEC. 201. EXPANSION OF NEW MARKETS VENTURE CAPITAL PROGRAM.
(a) Administration Participation Required.--Section 353 of
the Small Business
[[Page H11002]]
Investment Act of 1958 (15 U.S.C. 689b) is amended by
striking ``under which the Administrator may'' and inserting
``under which the Administrator shall''.
(b) Report to Congress.--Not later than 1 year after the
date of the enactment of this Act, the Administrator of the
Small Business Administration shall submit to Congress a
report evaluating the success of the expansion of the New
Markets Venture Capital Program under this section.
SEC. 202. IMPROVED NATIONWIDE DISTRIBUTION.
Section 354 of the Small Business Investment Act of 1958
(15 U.S.C. 689c) is amended by adding at the end the
following:
``(f) Geographic Expansion.--From among companies
submitting applications under subsection (b), the
Administrator shall consider the selection criteria and
nationwide distribution under subsection (c) and shall, to
the maximum extent practicable, approve at least one company
from each geographic region of the Small Business
Administration.''.
SEC. 203. INCREASED INVESTMENT IN SMALL MANUFACTURERS.
Section 354(d)(1) of the Small Business Investment Act of
1958 (15 U.S.C. 689c(d)(1)) is amended--
(1) by striking ``Each'' and inserting the following:
``(A) In general.--Except as provided in subparagraph (B),
each''; and
(2) by adding at the end the following:
``(B) Small manufacturer investment capital requirements.--
Each conditionally approved company engaged primarily in
development of and investment in small manufacturers shall
raise not less than $3,000,000 of private capital or binding
capital commitments from one or more investors (other than
agencies or departments of the Federal Government) who meet
criteria established by the Administrator.''.
SEC. 204. UPDATING DEFINITION OF LOW-INCOME GEOGRAPHIC AREA.
Section 351 of the Small Business Investment Act of 1958
(15 U.S.C. 689) is amended--
(1) by striking paragraphs (2) and (3);
(2) by inserting after paragraph (1) the following:
``(2) Low-income geographic area.--The term `low-income
geographic area' has the same meaning given the term `low-
income community' in section 45D(e) of the Internal Revenue
Code of 1986 (26 U.S.C. 45D(e)).''; and
(3) by redesignating paragraphs (4) through (8) as (3)
through (7), respectively.
SEC. 205. STUDY ON AVAILABILITY OF EQUITY CAPITAL.
(a) Study Required.--Before the expiration of the 180-day
period that begins on the date of the enactment of this Act,
the Chief Counsel for Advocacy of the Small Business
Administration shall conduct a study on the availability of
equity capital in low-income urban and rural areas.
(b) Report.--Not later than 90 days after the completion of
the study under subsection (a) the Administrator of the Small
Business Administration shall submit to Congress a report
containing the findings of the study required under
subsection (a) and any recommendations of the Administrator
based on such study.
SEC. 206. EXPANDING OPERATIONAL ASSISTANCE TO CONDITIONALLY
APPROVED COMPANIES.
(a) Operational Assistance Grants to Conditionally Approved
Companies.--Section 358(a) of the Small Business Investment
Act of 1958 (15 U.S.C. 689(a)) is amended by adding at the
end the following new paragraph:
``(6) Grants to conditionally approved companies.--
``(A) In general.--Subject to subparagraphs (A) and (B),
upon the request of a company conditionally-approved under
section 354(c), the Administrator shall make a grant to the
company under this subsection.
``(B) Repayment by companies not approved.--If a company
receives a grant under paragraph (6) and does not enter into
a participation agreement for final approval, the company
shall repay the amount of the grant to the Administrator.
``(C) Deduction from grant to approved company.--If a
company receives a grant under paragraph (6) and receives
final approval under section 354(e), the Administrator shall
deduct the amount of the grant under that paragraph from the
total grant amount that the company receives for operational
assistance.
``(D) Amount of grant.--No company may receive a grant of
more than $50,000 under this paragraph.''.
(b) Limitation on Time for Final Approval.--Section 354(d)
of the Small Business Investment Act of 1958 (15 U.S.C.
689c(d)) is amended in the matter preceding paragraph (1) by
striking ``a period of time, not to exceed 2 years,'' and
inserting ``2 years''.
SEC. 207. STREAMLINED APPLICATION FOR NEW MARKETS VENTURE
CAPITAL PROGRAM.
Not later than 60 days after the date of the enactment of
this section, the Administrator of the Small Business
Administration shall prescribe standard documents for final
New Markets Venture Capital Company approval application
under section 354(e) of the Small Business Investment Act of
1958 (15 U.S.C. 689c(e)). The Administrator shall assure that
the standard documents shall be designed to substantially
reduce the cost burden of the application process on the
companies involved.
SEC. 208. ELIMINATION OF MATCHING REQUIREMENT.
Section 354(d)(2)(A)(i) of the Small Business Investment
Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amended--
(1) in subclause (I) by adding ``and'' at the end;
(2) in subclause (II) by striking ``and'' at the end; and
(3) by striking subclause (III).
SEC. 209. SIMPLIFIED FORMULA FOR OPERATIONAL ASSISTANCE
GRANTS.
Section 358(a)(4)(A) of the Small Business Investment Act
of 1958 (15 U.S.C. 689g(a)(4)(A)) is amended--
(1) by striking ``shall be equal to'' and all that follows
through the period at the end and by inserting ``shall be
equal to the lesser of--''; and
(2) by adding at the end the following:
``(i) 10 percent of the resources (in cash or in kind)
raised by the company under section 354(d)(2); or
``(ii) $1,000,000.''.
SEC. 210. AUTHORIZATION OF APPROPRIATIONS AND DEDICATION TO
SMALL MANUFACTURING.
Section 368(a) of the Small Business Investment Act of 1958
(15 U.S.C. 689q(a)) is amended--
(1) by striking ``fiscal years 2001 through 2006'' and
inserting ``fiscal years 2008 through 2010'';
(2) in paragraph (1)--
(A) by striking ``$150,000,000'' and inserting
``$30,000,000''; and
(B) by inserting before the period at the end the
following: ``, of which not less than one-quarter shall be
used to guarantee debentures of companies engaged primarily
in development of and investment in small manufacturers'';
and
(3) in paragraph (2)--
(A) by striking ``$30,000,000'' and inserting
``$5,000,000''; and
(B) by inserting before the period at the end the
following: ``, of which not less than one-quarter shall be
used to make grants to companies engaged primarily in
development of and investment in small manufacturers''.
TITLE III--ANGEL INVESTMENT PROGRAM
SEC. 301. ESTABLISHMENT OF ANGEL INVESTMENT PROGRAM.
(a) Establishment.--Title III of the Small Business
Investment Act of 1958 (15 U.S.C. 681 et seq.) is amended by
adding at the end the following new part:
``PART C--ANGEL INVESTMENT PROGRAM
``SEC. 380. OFFICE OF ANGEL INVESTMENT.
``(a) Establishment.--There is established, in the
Investment Division of the Small Business Administration, the
Office of Angel Investment.
``(b) Director.--The head of the Office of Angel Investment
is the Director of Angel Investment.
``(c) Duties.--Subject to the direction of the Secretary,
the Director shall perform the following functions:
``(1) Provide support for the development of angel
investment opportunities for small business concerns.
``(2) Administer the Angel Investment Program under section
382 of this Act.
``(3) Administer the Federal Angel Network under section
383 of this Act.
``(4) Administer the grant program for the development of
angel groups under section 384 of this Act.
``(5) Perform such other duties consistent with this
section as the Administrator shall prescribe.
``SEC. 381. DEFINITIONS.
``In this part:
``(1) The term `angel group' means 10 or more angel
investors organized for the purpose of making investments in
local or regional small business concerns that--
``(A) consists primarily of angel investors;
``(B) requires angel investors to be accredited investors;
and
``(C) actively involves the angel investors in evaluating
and making decisions about making investments.
``(2) The term `angel investor' means an individual who--
``(A) qualifies as an accredited investor (as that term is
defined under Rule 501 of Regulation D of the Securities and
Exchange Commission (17 C.F.R. 230.501));
``(B) provides capital to or makes investments in a small
business concern.
``(3) The term `small business concern owned and controlled
by veterans' has the meaning given that term under section
3(q)(3) of the Small Business Act (15 U.S.C. 632(q)(3)).
``(4) The term `small business concern owned and controlled
by women' has the meaning given that term under section
8(d)(3)(D) of such Act (15 U.S.C. 637(d)(3)(D)).
``(5) The term `socially and economically disadvantaged
small business concern' has the meaning given that term under
section 8(a)(4)(A) of such Act (15 U.S.C. 637(a)(4)(A)).
``SEC. 382. ANGEL INVESTMENT PROGRAM.
``(a) In General.--The Director of Angel Investment shall
establish and carry out a program, to be known as the Angel
Investment Program, to provide financing to approved angel
groups for the purpose of providing venture capital
investment in small businesses in their communities.
``(b) Eligibility.--To be eligible to receive financing
under this section, an angel group shall--
``(1) have demonstrated experience making investments in
local or regional small business concerns;
[[Page H11003]]
``(2) have established protocols and a due diligence
process for determining its investment strategy;
``(3) have an established code of ethics; and
``(4) submit an application to the Director of Angel
Investment at such time and containing such information and
assurances as the Director may require.
``(c) Use of Funds.--An angel group that receives financing
under this section shall use the amounts received to make
investments in small business concerns--
``(1) that have been in existence for less than 5 years as
of the date on which the investment is made;
``(2) that have fewer than 75 employees as of the date on
which the investment is made;
``(3) more than 50 percent of the employees of which
perform substantially all of their services in the United
States as of the date on which the investment is made; and
``(4) within the geographic area determined by the Director
under subsection (e).
``(d) Limitation on Amount.--No angel group receiving
financing under this section shall receive more than
$2,000,000.
``(e) Limitation on Geographic Area.--For each angel group
receiving financing under this section, the Director shall
determine the geographic area in which a small business
concern must be located to receive an investment from that
angel group.
``(f) Priority in Providing Financing.--In providing
financing under this section, the Director shall give
priority to angel groups that invest in small business
concerns owned and controlled by veterans, small business
concerns owned and controlled by women, and socially and
economically disadvantaged small business concerns.
``(g) Nationwide Distribution of Financing.--In providing
financing under this section, the Director shall, to the
extent practicable, provide financing to angel groups that
are located in a variety of geographic areas.
``(h) Matching Requirement.--As a condition of receiving
financing under this section, the Director shall require that
for each small business concern in which the angel group
receiving such financing invests, the angel group shall
invest an amount that is equal to or greater than the amount
of financing received under this section from a source other
than the Federal Government that is equal to the amount of
the financing provided under this section that the angel
group invests in that small business concern.
``(i) Repayment of Financing.--As a condition of receiving
financing under this section, the Director shall require an
angel group to repay the Director for any investment on which
the angel group makes a profit an amount equal to the
percentage of the returns that is equal to the percentage of
the total amount invested by the angel group that consisted
of financing received under this section.
``(j) Angel Investment Fund.--
``(1) Establishment.--There is in the Treasury a fund to be
known as the Angel Investment Fund.
``(2) Deposit of certain amounts.--Amounts collected under
subsection (i) shall be deposited in the fund.
``(3) Use of deposits.--Deposits in the fund shall be
available for the purpose of providing financing under this
section in the amounts specified in annual appropriation laws
without regard to fiscal year limitations.
``(k) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section--
``(1) $10,000,000 for fiscal year 2008;
``(2) $20,000,000 for fiscal year 2009; and
``(3) $20,000,000 for fiscal year 2010.
``SEC. 383. FEDERAL ANGEL NETWORK.
``(a) In General.--Subject to the succeeding provisions of
this subsection, the Director of the Office of Angel
Investment shall establish and maintain a searchable
database, to be known as the Federal Angel Network, to assist
small business concerns in identifying angel investors.
``(b) Network Contents.--The Federal Angel Network shall
include--
``(1) a list of the names and addresses of angel groups and
angel investors;
``(2) information about the types of investments each angel
group or angel investor has made; and
``(3) information about other public and private resources
and registries that provide information about angel groups or
angel investors.
``(c) Collection of Information.--
``(1) In general.--The Director shall collect the
information to be contained in the Federal Angel Network and
shall ensure that such information is updated regularly.
``(2) Request for exclusion of information.--The Director
shall not include such information concerning an angel
investor if that investor contacts the Director to request
that such information be excluded from the Network.
``(d) Availability.--The Director shall make the Federal
Angel Network available on the Internet website of the
Administration and shall do so in a manner that permits
others to download, distribute, and use the information
contained in the Federal Angel Network.
``(e) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,000,000, to
remain available until expended.
``SEC. 384. GRANT PROGRAM FOR DEVELOPMENT OF ANGEL GROUPS.
``(a) In General.--The Director of the Office of Angel
Investment shall establish and carry out a grant program to
make grants to eligible entities for the development of new
or existing angel groups and to increase awareness and
education about angel investing.
``(b) Eligible Entities.--In this section, the term
`eligible entity' means--
``(1) a State or unit of local government;
``(2) a nonprofit organization;
``(3) a state mutual benefit corporation;
``(4) a Small Business Development Center established
pursuant to section 21 of the Small Business Act (15 U.S.C.
648); or
``(5) a women's business center established pursuant to
section 29 of the Small Business Act (15 U.S.C. 656).
``(c) Matching Requirement.--The Administrator shall
require, as a condition of any grant made under this section,
that the eligible entity receiving the grant provide from
resources (in cash or in kind), other than those provided by
the Administrator or any other Federal source, a matching
contribution equal to 50 percent of the amount of the grant.
``(d) Application.--To receive a grant under this section,
an eligible entity shall submit an application that
contains--
``(1) a proposal describing how the grant would be used;
and
``(2) any other information or assurances as the Director
may require.
``(e) Report.--Not later than 3 years after the date on
which an eligible entity receives a grant under this section,
such eligible entity shall submit a report to the
Administrator describing the use of grant funds and
evaluating the success of the angel group developed using the
grant funds.
``(f) Authorization of Appropriations.--There is authorized
to be appropriated to carry out this section $1,500,000, for
each of fiscal years 2008 through 2010.''.
TITLE IV--SURETY BOND PROGRAM
SEC. 401. STUDY AND REPORT.
(a) Study.--The Administrator of the Small Business
Administration shall conduct a study of the current funding
structure of the surety bond program carried out under part B
(15 U.S.C. 694a et seq.) of title IV of the Small Business
Investment Act of 1958. The study shall include--
(1) an assessment of whether the program's current funding
framework and program fees are inhibiting the program's
growth;
(2) an assessment of whether surety companies and small
business concerns could benefit from an alternative funding
structure; and
(3) an assessment of whether permissible premium rates for
surety companies participating in the program should be
placed on parity with the rates authorized by appropriate
State insurance regulators and how such a change would affect
the program under the current funding framework.
(b) Report.--Not later than 180 days after the date of the
enactment of this Act, the Administrator shall submit to
Congress a report on the results of the study.
SEC. 402. PREFERRED SURETY BOND PROGRAM.
(a) Program Required.--Part B (15 U.S.C. 694a et seq.) of
title IV of the Small Business Investment Act of 1958 is
amended by adding at the end the following:
``SEC. 413. PREFERRED SURETY BOND PROGRAM.
``(a) Program Required.--The Administrator shall carry out
a program, to be known as the Preferred Surety Bond Program,
under which the Administration, by a written agreement
between the surety and the Administration, delegates to the
surety complete authority to issue, monitor, and service
bonds subject to guaranty from the Administration without
obtaining the specific approval of the Administration. Bonds
made under the program shall carry a 70 percent guaranty.
``(b) Term.--The term of a delegation of authority under
such an agreement shall not exceed 2 years.
``(c) Renewal.--Such an agreement may be renewed one or
more times, each such renewal providing one additional term.
Before each renewal, the Administrator shall review the
surety's bonds, policies, and procedures for compliance with
relevant rules and regulations.
``(d) Application.--The Administrator shall promptly act
upon an application from a surety to participate in the
program, in accordance with criteria and procedures
established in regulations pursuant to section 411(d).
``(e) Reduction or Termination of Participation.--The
Administrator is authorized to reduce the allotment of bond
guarantee authority or terminate the participation of a
surety in the program based on the rate of participation of
such surety during the 4 most recent fiscal year quarters
compared to the median rate of participation by the other
sureties in the program.''.
(b) Conforming Amendments.--Section 411 of the Small
Business Investment Act of 1958 (15 U.S.C. 694b) is amended--
(1) in subsection (a), by striking paragraphs (3), (4), and
(5);
(2) in subsection (b)(2), by striking ``the authority of
subsection (a)(3)'' and inserting ``the authority of section
413'';
(3) in subsection (c)--
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) through (4) as (1)
through (3), respectively; and
(4) in subsection (g)(3), by striking ``the authority of
paragraph (3) of subsection (a)'' and inserting ``the
authority of section 413''.
[[Page H11004]]
SEC. 403. DENIAL OF LIABILITY.
Section 411 of the Small Business Investment Act of 1958
(15 U.S.C. 694b) is amended by adding at the end the
following:
``(k) For bonds made or executed with the prior approval of
the Administration, the Administration shall not deny
liability to a surety based upon information that was
provided as part of the guaranty application.''.
SEC. 404. INCREASING THE BOND THRESHOLD.
Section 411(a) of the Small Business Investment Act of 1958
(15 U.S.C. 694b(a)) is amended by striking ``$2,000,000'' and
inserting ``$3,000,000''.
SEC. 405. FEES.
Section 411 of the Small Business Investment Act of 1958
(15 U.S.C. 694b) is amended by adding at the end the
following:
``(l) To the extent that amounts are made available to the
Administrator for the purpose of fee contributions, the
Administrator shall use such funds to offset fees established
and assessed under this section. Each fee contribution shall
be effective for one fiscal quarter and shall be adjusted as
necessary to ensure that amounts made available are fully
used.''.
TITLE V--VENTURE CAPITAL INVESTMENT STANDARDS
SEC. 501. DETERMINING WHETHER BUSINESS CONCERN IS
INDEPENDENTLY OWNED AND OPERATED.
Section 3(a) of the Small Business Act (15 U.S.C. 632(a))
is amended by adding at the end the following:
``(5) Non-affiliation of venture capital from consideration
of small business concern.--For purposes of determining
whether a small business concern is independently owned and
operated under paragraph (1) or meets the small business size
standards instituted under paragraph (2), the Administrator
shall not consider a concern that has received financing from
a venture capital operating company to be affiliated with
either the venture capital operating company or any other
business which the venture capital operating company has
financed.
``(6) Definition of `independently owned and operated'.--
For purposes of this section, a business concern shall be
deemed to be `independently owned and operated' if it is
owned in majority part by one or more natural persons or
venture capital operating companies meeting the definition in
paragraph (7).
``(7) Definition of `venture capital operating company'.--
For purposes of this section, the term `venture capital
operating company' means a business concern--
``(A) that--
``(i) is a Venture Capital Operating Company, as that term
is defined in regulations promulgated by the Secretary of
Labor; or
``(ii) is an entity that--
``(I) is registered under the Investment Company Act of
1940 (15 U.S.C. 80a-51 et seq.);
``(II) is an investment company, as defined in section
3(c)(14) of such Act (15 U.S.C. 80a-3(c)(14)), which is not
registered under such Act because it is beneficially owned by
less than 100 persons; or
``(III) is a nonprofit organization affiliated with, or
serving as a patent and licensing organization for, a
university or other institution of higher education and that
invests primarily in small business concerns; and
``(B) that is not controlled by any business concern that
is not a small business concern within the meaning of section
3; and
``(C) that has fewer than 500 employees; and
``(D) that is itself a business concern incorporated and
domiciled in the United States, or is controlled by a
business concern that is incorporated and domiciled in the
United States.''.
TITLE VI--REGULATIONS
SEC. 601. REGULATIONS.
Not later than 90 days after the date of the enactment of
this Act, the Administrator shall issue revisions to all
existing regulations as necessary to ensure their conformity
with the amendments made by this Act.
The CHAIRMAN. No amendment to the bill is in order except those
printed in House Report 110-350. Each amendment may be offered only in
the order printed in the report, by a Member designated in the report,
shall be considered read, shall be debatable for the time specified in
the report, equally divided and controlled by the proponent and an
opponent of the amendment, shall not be subject to amendment, and shall
not be subject to a demand for division of the question.
Amendment No. 1 Offered by Mr. Chabot
The CHAIRMAN. It is now in order to consider amendment No. 1 printed
in part A of House Report 110-350.
Mr. CHABOT. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 1 offered by Mr. Chabot.
Strike title V and insert the following:
TITLE V--VENTURE CAPITAL INVESTMENT STANDARDS
SEC. 501. DETERMINING WHETHER BUSINESS CONCERN IS
INDEPENDENTLY OWNED AND OPERATED.
Section 3(a) of the Small Business Act (15 U.S.C. 632(a))
is amended by adding at the end the following:
``(5) Non-affiliation of venture capital from consideration
of small business concern.--For purposes of determining
whether a small business concern is independently owned and
operated under paragraph (1) or meets the small business size
standards instituted under paragraph (2), the Administrator
shall not consider a business concern to be affiliated with a
venture capital operating company (or with any other business
that the venture capital operating company has financed) if--
``(A) the venture capital operating company does not own 50
percent or more of the business concern; and
``(B) employees of the venture capital operating company do
not constitute a majority of the board of directors of the
business concern.
``(6) Definition of `independently owned and operated'.--
For purposes of this section, a business concern shall be
deemed to be `independently owned and operated' if--
``(A) it is owned in majority part by one or more natural
persons or venture capital operating companies;
``(B) there is no single venture capital operating company
that owns 50 percent or more of the business concern; and
``(C) there is no single venture capital operating company
the employees of which constitute a majority of the board of
directors of the business concern.
``(7) Definition of `venture capital operating company'.--
For purposes of this section, the term `venture capital
operating company' means a business concern--
``(A) that--
``(i) is a Venture Capital Operating Company, as that term
is defined in regulations promulgated by the Secretary of
Labor; or
``(ii) is an entity that--
``(I) is registered under the Investment Company Act of
1940 (15 U.S.C. 80a-51 et seq.);
``(II) is an investment company, as defined in section
3(c)(14) of such Act (15 U.S.C. 80a-3(c)(14)), which is not
registered under such Act because it is beneficially owned by
less than 100 persons; or
``(III) is a nonprofit organization affiliated with, or
serving as a patent and licensing organization for, a
university or other institution of higher education and that
invests primarily in small business concerns; and
``(B) that is not controlled by any business concern that
is not a small business concern within the meaning of section
3; and
``(C) that has fewer than 500 employees; and
``(D) that is itself a concern incorporated and domiciled
in the United States, or is controlled by a concern that is
incorporated and domiciled in the United States.''.
The CHAIRMAN. Pursuant to House Resolution 682, the gentleman from
Ohio (Mr. Chabot) and a Member opposed each will control 5 minutes.
The Chair recognizes the gentleman from Ohio.
Mr. CHABOT. Thank you, Mr. Chairman. And I won't use the full 5
minutes.
I yield myself such time as I may consume.
As I have already explained when discussing the underlying bill, this
amendment adopts a bright-line test for determining whether a business
that receives funding from a venture capital company is considered
affiliated with that firm and any other firms that the venture capital
company may own.
The test is simple and sensible and I think easily applied. In my
view, it strikes the correct balance between allowing needed venture
capital funding for small businesses, while protecting against the
possibility that venture capital firms will be able to create
conglomerates that would have an unfair competitive advantage against
independently owned and operated small businesses. As the chairwoman
already mentioned, so I won't go into great detail, the venture capital
company can't have more than 50 percent.
As a result, I believe that this amendment alleviates many of the
concerns that the Small Business Administration has, although maybe not
all, with title V. I ask that Members support the amendment.
Mr. Chairman, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Chairman, while not opposed to the amendment, I
ask unanimous consent to claim the time in opposition.
The CHAIRMAN. Is there objection to the request of the gentlewoman
from New York?
There was no objection.
Ms. VELAZQUEZ. Mr. Chairman, in developing this legislation, we
worked very closely with the ranking member to try and address his
concerns with this bill. I understand that he has some remaining
concerns with title V of the bill. I am confident, however, that the
legislation we have reported includes adequate safeguards.
[[Page H11005]]
The ranking member's amendment will provide further protections. I
thank him for working with us to perfect this bill. I am willing to
accept his amendment, which provides an additional level of
clarification and direction for the agency. I appreciate his time and
patience in working through this complicated issue with us.
Mr. Chairman, I would yield such time as he may consume to the
gentleman from Pennsylvania (Mr. Altmire), the main sponsor of the
bill.
Mr. ALTMIRE. I thank the chairwoman and the ranking member. I think
the way that we worked together as a committee to resolve this issue is
a model for the way this Congress should operate. The ranking member
voiced some concerns about the bill and deferred in the process to get
it to the floor so he could offer his amendment on the floor.
There are some outside groups, I know, that are concerned about title
V. We want to alleviate their concerns on this issue and get the
support of the entire small business community on this. Hopefully, with
this amendment, that is going to happen.
Mr. Chairman, none of this would have happened without the support of
the ranking member and the way that he handled this issue. I really
want to thank him for offering this amendment. I think this is going to
secure the bill for some of the groups that have concerns. I also
accept it and I encourage my colleagues to support the ranking member's
amendment.
Mr. CHABOT. Mr. Chairman, I would like to thank the gentleman for his
kind remarks and also note that the gentleman also worked in a
bipartisan manner with Mr. Graves from Missouri in drafting the bill
and moving forward in the first place.
As he mentioned, the Small Business Committee, I think, has been a
model in many ways for the entire Congress in the way a committee can
work together. We have philosophical disagreements at times. We work
together, and we are not going to agree on everything, but, in general,
we try to work things out for the benefit of the small business
community.
There are Republicans, there are Democrats, there are independents
that benefit from the small business community thriving in this
country. I think we are trying to work altogether to make it a
healthier situation. I wish all committees around here were able to do
the same thing.
Mr. Chairman, I yield back the balance of my time.
Ms. VELAZQUEZ. Mr. Chairman, I thank the gentleman from Ohio, and I
urge adoption of his amendment.
Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Ohio (Mr. Chabot).
The amendment was agreed to.
Amendment No. 2 Offered by Mr. Inslee
The CHAIRMAN. It is now in order to consider amendment No. 2 printed
in part A of House Report 110-350.
Mr. INSLEE. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 2 offered by Mr. Inslee:
Section 206, add at the end the following:
(c) Expanded Definition of Operational Assistance.--Section
351(5) of the Small Business Investment Act of 1958 (15
U.S.C. 689(5)) is amended by inserting before the period at
the end the following: ``, including assistance on how to
implement energy efficiency and sustainable practices that
reduce the use of non-renewable resources or minimize
environmental impact and reduce overall costs and increase
health of employees''.
The CHAIRMAN. Pursuant to House Resolution 682, the gentleman from
Washington (Mr. Inslee) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Washington.
{time} 1730
Mr. INSLEE. Mr. Chairman, I rise today to support the Inslee-Welch
amendment to the Small Business Investment Act which will support the
legislation's overall goal to modernize small business investment
programs. Small businesses are the backbone of the growth in our
economy and will be the brains behind the forthcoming clean-energy
revolution.
Our amendment will ensure that the small business investment
companies give consideration to innovators that create clean energy
technologies and services.
There are 26.8 million small businesses in the United States. The
vast majority of renewable fuels producers, such as biodiesel and
ethanol, are small businesses. The chairwoman understands this, and I
thank her for her support and commend her efforts to support small
green businesses.
Under the chairwoman's leadership, the House passed a clean energy
package that will help small businesses become more energy efficient
and will establish a debenture financing program exclusively focused on
investments in renewable fuels.
These efforts truly have been outstanding. However, I believe we must
ensure that every piece of legislation that passes this Chamber that
deals with taxpayer dollars and Federal investment include a provision
to encourage investments in truly clean energy technologies. This
amendment will help American innovators and entrepreneurs turn their
ideas into products that will help prevent our worst-case climate
change scenarios and will create green-collar jobs, and I urge its
passage.
Mr. Chairman, I yield back the balance of my time.
Mr. CHABOT. Mr. Chairman, I rise to claim the time in opposition, but
I am not opposed and we are prepared to accept the gentleman's
amendment.
The CHAIRMAN. Without objection, the gentleman from Ohio is
recognized for 5 minutes.
There was no objection.
Mr. CHABOT. Thank you. And we are prepared to accept the gentleman's
amendment.
Mr. Chairman, I yield back the balance of my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Washington (Mr. Inslee).
The amendment was agreed to.
Amendment No. 3 Offered by Mr. Inslee
The CHAIRMAN. It is now in order to consider amendment No. 3 printed
in House Report 110-350.
Mr. INSLEE. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment No. 3 offered by Mr. Inslee:
Redesignate section 104 as 105 and insert after section 103
the following:34
SEC. 104. INCREASED INVESTMENTS IN SMALL BUSINESSES CREATING
NEW TECHNOLOGIES, MANUFACTURED GOODS, OR
MATERIALS OR PROVIDING SERVICES TO REDUCE
CARBON EMISSIONS IN THE UNITED STATES, REDUCE
THE USE OF NON-RENEWABLE RESOURCES, MINIMIZE
ENVIRONMENTAL IMPACT, AND RELATE PEOPLE WITH
THE NATURAL ENVIRONMENT.
Section 303 of the Small Business Investment Act of 1958
(15 U.S.C. 683), as amended by this Act, is further amended
by adding at the end the following:
``(k) Increased Investments in Small Businesses.--The
Administrator shall give consideration to investments in
small businesses that are creating new technologies,
manufactured goods, or materials, or providing services to
reduce carbon emissions in the United States, reduce the use
of non-renewable resources, minimize environmental impact,
and relate people with the natural environment.''.
The CHAIRMAN. Pursuant to House Resolution 682, the gentleman from
Washington (Mr. Inslee) and a Member opposed each will control 5
minutes.
The Chair recognizes the gentleman from Washington.
Mr. INSLEE. Mr. Chairman, I rise to offer a second Inslee-Welch
amendment that will help small business achieve energy efficiency. We
need all hands on deck in the effort to reduce greenhouse gas
emissions, including our Nation's 26 million small businesses.
This amendment will help small businesses in low-income areas upgrade
to energy-efficient buildings, technologies and practices. It will give
them operational assistance in these areas through the New Market
Venture Capital program.
The majority of small business owners say that they have been
affected by rising energy prices and that reducing energy costs will
serve to increase their profitability. At the same time, however, half
of these entrepreneurs have not yet invested in energy-efficient
programs for their businesses.
For instance, if a small business owner can replace 20 100-watt
incandescent bulbs with 27-watt compact fluorescent bulbs, it does cost
the owner $400 up front but saves them $980 a year in energy costs.
[[Page H11006]]
The owner of the Snoqualmie Gourmet Ice Cream factory in Maltby, WA
retrofitted their small business lighting system and reduced their
lighting costs by 50 percent. So we know that these simple, new,
relatively inexpensive technologies pay for themselves in months, or at
most in a couple of years.
We know small businesses benefit from energy efficiency and
sustainable workplace practices. This amendment will help American
innovators with the know-how to reduce greenhouse gas emissions in
America while increasing their profits. This is a green/green solution
in both ways. I want to thank the chairwoman for her support, and urge
passage of the amendment.
Mr. Chairman, I yield back the balance of my time.
Mr. CHABOT. I will claim the time in opposition, Mr. Chairman.
The CHAIRMAN. The gentleman from Ohio is recognized for 5 minutes.
Mr. CHABOT. Mr. Chairman, we have heard the gentleman's amendment and
we are prepared to accept the amendment.
Mr. WELCH of Vermont. Mr. Chairman, I want to thank the gentleman
from Washington, Mr. Inslee, for his two very thoughtful amendments to
H.R. 3567, the Small Business Investment Expansion Act and for allowing
me to cosponsor them.
The first amendment will help small businesses increase their energy
efficiency and implement sustainable practices. The second amendment
would direct the Small Business Administration, SBA, to reward small
businesses that are reducing their carbon footprint.
Earlier this year, I offered an amendment, which the House passed, to
set a 5 percent procurement goal for the Federal Government to contract
with green small businesses.
It is critical that small businesses be encouraged to operate and to
develop and supply products and services in an environmentally sound
way.
Many small businesses are already incorporating sustainable practices
into their own business, such as conserving energy and water, using
sustainable products, or minimizing generation of waste and the release
of pollutants. They strive to make products from recycled materials.
They use energy from renewable resources such as bio-fuels, solar and
wind power. Or they transport goods and services in alternate fuel
vehicles.
We all have a responsibility to protect our environment. As
populations expand and lifestyles change, we must keep the planet in
good condition so that future generations will have the same natural
resources that we have and enjoy now. The Earth faces many threats
ranging from pollution to acid rain to global warming to the
destruction of rainforests and other wild habitats to the decline and
extinction of thousands of species of animals and plants. Combating
these threats is essential to ensuring that future generations can live
healthy lives.
Our small businesses embrace our Nation's entrepreneurial spirit. The
Federal Government can and should serve as a model to the private
sector and the rest of the world. As a Congress, we should reward
businesses that are striving to be environmentally responsible.
Both of these amendments would greatly improve the bill before us and
I ask that they be adopted by the House.
I yield back the balance of my time.
The CHAIRMAN. The question is on the amendment offered by the
gentleman from Washington (Mr. Inslee).
The amendment was agreed to.
The CHAIRMAN. There being no other amendments, the Committee rises.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr.
Capuano) having assumed the chair, Mr. Kind, Chairman of the Committee
of the Whole House on the state of the Union, reported that that
Committee, having had under consideration the bill (H.R. 3567) to amend
the Small Business Investment Act of 1958 to expand opportunities for
investments in small businesses, and for other purposes, pursuant to
House Resolution 682, he reported the bill back to the House with
sundry amendments adopted by the Committee of the Whole.
The SPEAKER pro tempore. Under the rule, the previous question is
ordered.
Is a separate vote demanded on any amendment reported from the
Committee of the Whole? If not, the Chair will put them en gros.
The amendments were agreed to.
The SPEAKER pro tempore. The question is on the engrossment and third
reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
Motion to Recommit Offered by Mr. Walberg
Mr. WALBERG. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. WALBERG. Yes, in its current form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:
Mr. Walberg moves to recommit the bill H.R. 3567 to the
Committee on Small Business with instructions to report the
same back to the House forthwith with the following
amendments:
In title III of the bill, in the quoted matter proposing to
insert a new part C in title III of the Small Business
Investment Act of 1958:
(1) Strike sections 382 and 384, and redesignate section
383 as 382.
(2) In section 380(c), strike paragraphs (2) and (4);
strike ``383'' in paragraph (3) and insert ``382''; and
redesignate paragraphs (3) and (5) as (2) and (3),
respectively.
The SPEAKER pro tempore. The gentleman from Michigan is recognized
for 5 minutes.
Mr. WALBERG. Mr. Speaker, in considering tonight's legislation, I am
reminded of a quote from the great communicator himself, Ronald Reagan:
``The government's view of the economy could be summed up in a few
short phrases: If it moves, tax it. If it keeps moving, regulate it.
And it if stops moving, subsidize it.''
I find it ironic that we sit here this evening debating a clause to
provide millionaires with Federal funding in the name of spurring
investment when the majority party constantly supports to tax private
investments out of business.
The best way to encourage innovation and investment in the
marketplace is to reduce financial and regulatory impediments. The key
is reducing regulation. Congress must support tax measures that have
proven to stimulate the economy, such as extending the capital gains
and dividends tax reduction beyond 2010. These commonsense tax
reductions have a proven track record of producing greater wealth and
encouraging further investment in the economy.
Instead, the majority in Congress has stood in the way of providing
tax relief by supporting and passing a budget containing the largest
tax increase in American history, which would result in a $3,000 tax
increase for the average taxpayer in Michigan and in every other State.
Now the majority wants to subsidize millionaires with funds that would
be better used to assist the middle class.
Title III of the bill before us creates a brand new program in the
Small Business Administration to promote so-called ``angel investors.''
Angel investors are those financial backers who provide venture capital
funds for small startups or entrepreneurs.
Among other things, this new SBA program will provide funds of up to
$2 million to qualified angel investors. These millionaire investors
will take taxpayer dollars to finance their own small business. This
begs the question: Who exactly are these angel investors? Do they have
halos? Do they really need government money if they are already
millionaires?
According to the regulations referenced in this bill, a qualified
angel investor would be ``any natural person whose individual net
worth, or joint net worth with that person's spouse exceeds $1
million.''
In other words, to even qualify to receive government money, these
angels already have to be millionaires.
According to the University of New Hampshire, angel investments
totaled $25.6 billion nationally, up 10 percent over the previous year.
I don't know about you, but it appears angel investors already are
having financial success, and I question whether they need help from
the American taxpayer.
Title III of the bill also includes a new grant program to help
develop new angel investor groups; in other words, a taxpayer-
subsidized grant program to help millionaires get together and make
investments. One can only wonder if these programs come with a
complimentary tin of caviar.
My motion to recommit would simply strike the two sections of bill
that authorize taxpayer funding for these angel millionaire investors.
Congress does not need to enact another Federal
[[Page H11007]]
entitlement program to help millionaires decide what to invest in. The
focus in this debate should be on lowering taxes for every American to
encourage investment and personal wealth to create entrepreneurship and
allow job creators to thrive.
Mr. Speaker, I yield back the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I rise to claim the time in opposition to
the motion to recommit.
The SPEAKER pro tempore. The gentlewoman from New York is recognized
for 5 minutes.
Ms. VELAZQUEZ. Mr. Speaker, I would like to ask the gentleman from
Michigan: What bill did you read? Did you read H.R. 3567? Did you?
Because if you read the bill, I want to ask you, show me in this bill
where one single penny will go to millionaires? Show me in the bill
where that happens?
It goes to small businesses in low-income communities. It goes to
veterans. It goes to small businesses. If the goal is to cut access to
capital, that is what this motion will do.
One of the primary goals of this program is to put capital in the
hands of veterans and entrepreneurs. This amendment will bar
entrepreneurs from such funds. It will invest in startups that could
become the next Microsoft. They are not there yet. They are small,
small businesses.
We always hear how we need to be doing more to encourage investment.
This program does exactly that. This is not a new program, it merely
fixes an old program that has been badly mismanaged by this
administration. The total cost of this program is half of what the
other party said when it was in charge. This is a 3-year pilot program,
and all funding remains subject to the application. The Federal
Government will actually have less risk under the angel investment
program than any other current government programs. And when we talk
about being stewards of the taxpayers' money, profits from this
investment go right back to the taxpayers.
Mr. Speaker, I ask Members to oppose the motion to recommit.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. Without objection, the previous question is
ordered on the motion to recommit.
There was no objection.
The SPEAKER pro tempore. The question is on the motion to recommit.
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. WALBERG. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 9 of rule XX, the Chair
will reduce to 5 minutes the minimum time for any electronic vote on
the question of passage.
The vote was taken by electronic device, and there were--yeas 183,
nays 213, not voting 36, as follows:
[Roll No. 922]
YEAS--183
Aderholt
Akin
Alexander
Bachmann
Baker
Barrett (SC)
Bartlett (MD)
Barton (TX)
Biggert
Bilbray
Bilirakis
Bishop (UT)
Blackburn
Blunt
Boehner
Bono
Boozman
Boustany
Brady (TX)
Broun (GA)
Brown (SC)
Brown-Waite, Ginny
Buchanan
Burgess
Burton (IN)
Buyer
Calvert
Camp (MI)
Campbell (CA)
Cannon
Cantor
Capito
Carter
Castle
Chabot
Coble
Cole (OK)
Conaway
Crenshaw
Culberson
Davis (KY)
Davis, David
Davis, Tom
Deal (GA)
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Doolittle
Drake
Dreier
Duncan
Ehlers
Emerson
Fallin
Feeney
Ferguson
Flake
Forbes
Fortenberry
Fossella
Foxx
Franks (AZ)
Frelinghuysen
Gallegly
Garrett (NJ)
Gerlach
Gilchrest
Gingrey
Gohmert
Goode
Goodlatte
Granger
Graves
Hall (TX)
Hastings (WA)
Hayes
Heller
Hensarling
Hobson
Hulshof
Hunter
Inglis (SC)
Johnson (IL)
Johnson, Sam
Jones (NC)
Jordan
Keller
King (IA)
King (NY)
Kingston
Kirk
Kline (MN)
Knollenberg
Kuhl (NY)
Lamborn
Latham
LaTourette
Lewis (CA)
Lewis (KY)
LoBiondo
Lucas
Lungren, Daniel E.
Mack
Manzullo
McCarthy (CA)
McCotter
McCrery
McHenry
McHugh
McKeon
McMorris Rodgers
Mica
Miller (FL)
Miller (MI)
Miller, Gary
Murphy, Tim
Musgrave
Myrick
Neugebauer
Nunes
Pearce
Pence
Peterson (PA)
Petri
Pickering
Pitts
Platts
Poe
Porter
Price (GA)
Pryce (OH)
Putnam
Radanovich
Ramstad
Regula
Rehberg
Reichert
Renzi
Reynolds
Rogers (AL)
Rogers (KY)
Rogers (MI)
Rohrabacher
Ros-Lehtinen
Roskam
Royce
Ryan (WI)
Sali
Saxton
Schmidt
Sensenbrenner
Sessions
Shadegg
Shays
Shimkus
Shuster
Simpson
Smith (NE)
Smith (NJ)
Smith (TX)
Souder
Stearns
Sullivan
Tancredo
Terry
Thornberry
Tiahrt
Tiberi
Turner
Upton
Walberg
Walden (OR)
Walsh (NY)
Wamp
Weldon (FL)
Weller
Westmoreland
Whitfield
Wicker
Wilson (SC)
Wolf
Young (AK)
Young (FL)
NAYS--213
Abercrombie
Ackerman
Allen
Altmire
Andrews
Arcuri
Baca
Baird
Baldwin
Barrow
Bean
Becerra
Berkley
Berman
Berry
Bishop (NY)
Blumenauer
Boren
Boswell
Boucher
Boyd (FL)
Boyda (KS)
Brady (PA)
Braley (IA)
Butterfield
Capps
Capuano
Cardoza
Carnahan
Carney
Castor
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Cooper
Costa
Costello
Courtney
Cramer
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, Lincoln
DeFazio
DeGette
Delahunt
DeLauro
Dicks
Doggett
Donnelly
Edwards
Ellison
Ellsworth
Emanuel
Engel
English (PA)
Eshoo
Etheridge
Farr
Fattah
Filner
Frank (MA)
Giffords
Gillibrand
Gonzalez
Gordon
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hare
Harman
Hastings (FL)
Herseth Sandlin
Higgins
Hill
Hinchey
Hirono
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Inslee
Israel
Jackson (IL)
Jefferson
Johnson (GA)
Kagen
Kanjorski
Kaptur
Kildee
Kilpatrick
Kind
Klein (FL)
Kucinich
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Lee
Levin
Lewis (GA)
Lipinski
Loebsack
Lowey
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (NY)
McCollum (MN)
McDermott
McGovern
McIntyre
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (NC)
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Murphy (CT)
Murphy, Patrick
Murtha
Nadler
Napolitano
Neal (MA)
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Peterson (MN)
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Richardson
Rodriguez
Ross
Rothman
Roybal-Allard
Ruppersberger
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Schakowsky
Schiff
Schwartz
Scott (GA)
Serrano
Sestak
Shea-Porter
Sherman
Shuler
Sires
Skelton
Slaughter
Smith (WA)
Snyder
Solis
Space
Spratt
Stupak
Sutton
Tanner
Tauscher
Taylor
Thompson (CA)
Tierney
Towns
Udall (CO)
Udall (NM)
Van Hollen
Velazquez
Walz (MN)
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Wexler
Wilson (OH)
Woolsey
Wu
Wynn
Yarmuth
NOT VOTING--36
Bachus
Bishop (GA)
Bonner
Brown, Corrine
Carson
Conyers
Cubin
Davis, Jo Ann
Dingell
Doyle
Everett
Hastert
Herger
Hinojosa
Hoekstra
Issa
Jackson-Lee (TX)
Jindal
Johnson, E. B.
Jones (OH)
Kennedy
LaHood
Linder
Lofgren, Zoe
Marchant
McCaul (TX)
Moran (KS)
Moran (VA)
Paul
Perlmutter
Rush
Scott (VA)
Stark
Thompson (MS)
Visclosky
Wilson (NM)
{time} 1809
Messrs. CUMMINGS, LOEBSACK, SNYDER, LINCOLN DAVIS of Tennessee, Ms.
DELAURO and Ms. WASSERMAN SCHULTZ changed their vote from ``yea'' to
``nay.''
Mr. HASTINGS of Washington and Mr. SOUDER changed their vote from
``nay'' to ``yea.''
So the motion to recommit was rejected.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Ms. VELAZQUEZ. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. This is a 5-minute vote.
The vote was taken by electronic device, and there were--yeas 325,
nays 72, not voting 35, as follows:
[Roll No. 923]
YEAS--325
Abercrombie
Ackerman
Akin
Alexander
Allen
Altmire
Andrews
Baca
Baird
Baldwin
Barrow
Bartlett (MD)
Bean
Becerra
Berkley
Berman
Berry
Biggert
[[Page H11008]]
Bilbray
Bilirakis
Bishop (NY)
Blumenauer
Bono
Boozman
Boren
Boswell
Boucher
Boustany
Boyda (KS)
Brady (PA)
Braley (IA)
Brown (SC)
Buchanan
Burgess
Butterfield
Buyer
Camp (MI)
Capito
Capps
Capuano
Cardoza
Carnahan
Carney
Castle
Castor
Chabot
Chandler
Clarke
Clay
Cleaver
Clyburn
Cohen
Cole (OK)
Conaway
Cooper
Costa
Costello
Courtney
Cramer
Crenshaw
Crowley
Cuellar
Cummings
Davis (AL)
Davis (CA)
Davis (IL)
Davis, David
Davis, Lincoln
Davis, Tom
DeFazio
DeGette
Delahunt
DeLauro
Dent
Diaz-Balart, L.
Diaz-Balart, M.
Dicks
Doggett
Donnelly
Drake
Edwards
Ehlers
Ellison
Ellsworth
Emanuel
Emerson
Engel
English (PA)
Eshoo
Etheridge
Fallin
Farr
Fattah
Ferguson
Filner
Forbes
Fortenberry
Fossella
Frank (MA)
Frelinghuysen
Gerlach
Giffords
Gilchrest
Gillibrand
Gohmert
Gonzalez
Goodlatte
Gordon
Granger
Graves
Green, Al
Green, Gene
Grijalva
Gutierrez
Hall (NY)
Hall (TX)
Hare
Harman
Hastings (FL)
Hastings (WA)
Hayes
Herseth Sandlin
Higgins
Hill
Hinchey
Hirono
Hobson
Hodes
Holden
Holt
Honda
Hooley
Hoyer
Hulshof
Inslee
Israel
Jackson (IL)
Jefferson
Johnson (GA)
Johnson (IL)
Jordan
Kagen
Kanjorski
Kaptur
Keller
Kildee
Kilpatrick
Kind
King (IA)
King (NY)
Kirk
Klein (FL)
Kline (MN)
Knollenberg
Kucinich
Kuhl (NY)
Lampson
Langevin
Lantos
Larsen (WA)
Larson (CT)
Latham
LaTourette
Lee
Levin
Lewis (GA)
Lewis (KY)
Lipinski
LoBiondo
Loebsack
Lowey
Lucas
Lynch
Mahoney (FL)
Maloney (NY)
Markey
Marshall
Matheson
Matsui
McCarthy (CA)
McCarthy (NY)
McCollum (MN)
McCotter
McDermott
McGovern
McHugh
McIntyre
McMorris Rodgers
McNerney
McNulty
Meek (FL)
Meeks (NY)
Melancon
Michaud
Miller (MI)
Miller (NC)
Miller, Gary
Miller, George
Mitchell
Mollohan
Moore (KS)
Moore (WI)
Murphy (CT)
Murphy, Patrick
Murphy, Tim
Murtha
Musgrave
Nadler
Napolitano
Neal (MA)
Neugebauer
Nunes
Oberstar
Obey
Olver
Ortiz
Pallone
Pascrell
Pastor
Payne
Pearce
Peterson (MN)
Peterson (PA)
Pickering
Platts
Pomeroy
Porter
Price (NC)
Pryce (OH)
Putnam
Rahall
Rangel
Regula
Rehberg
Reichert
Renzi
Reyes
Reynolds
Richardson
Rodriguez
Rogers (AL)
Rogers (KY)
Rogers (MI)
Ros-Lehtinen
Roskam
Ross
Rothman
Roybal-Allard
Ruppersberger
Rush
Ryan (OH)
Salazar
Sanchez, Linda T.
Sanchez, Loretta
Sarbanes
Saxton
Schakowsky
Schiff
Schmidt
Schwartz
Scott (GA)
Scott (VA)
Serrano
Sestak
Shays
Shea-Porter
Sherman
Shimkus
Shuler
Shuster
Simpson
Sires
Skelton
Slaughter
Smith (NE)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder
Solis
Souder
Space
Spratt
Stupak
Sullivan
Sutton
Tanner
Tauscher
Taylor
Terry
Thompson (CA)
Thompson (MS)
Tiahrt
Tiberi
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Upton
Van Hollen
Velazquez
Walsh (NY)
Walz (MN)
Wamp
Wasserman Schultz
Waters
Watson
Watt
Waxman
Weiner
Welch (VT)
Weller
Westmoreland
Wexler
Whitfield
Wicker
Wilson (OH)
Wolf
Woolsey
Wu
Wynn
Yarmuth
Young (AK)
Young (FL)
NAYS--72
Aderholt
Bachmann
Baker
Barrett (SC)
Barton (TX)
Bishop (UT)
Blackburn
Blunt
Boehner
Brady (TX)
Broun (GA)
Brown-Waite, Ginny
Burton (IN)
Calvert
Campbell (CA)
Cannon
Cantor
Carter
Coble
Culberson
Davis (KY)
Deal (GA)
Doolittle
Dreier
Duncan
Feeney
Flake
Foxx
Franks (AZ)
Gallegly
Garrett (NJ)
Gingrey
Goode
Heller
Hensarling
Hunter
Inglis (SC)
Johnson, Sam
Jones (NC)
Kingston
Lamborn
Lewis (CA)
Lungren, Daniel E.
Mack
Manzullo
McCrery
McHenry
McKeon
Mica
Miller (FL)
Myrick
Pence
Petri
Pitts
Poe
Price (GA)
Radanovich
Ramstad
Rohrabacher
Royce
Ryan (WI)
Sali
Sensenbrenner
Sessions
Shadegg
Stearns
Tancredo
Thornberry
Walberg
Walden (OR)
Weldon (FL)
Wilson (SC)
NOT VOTING--35
Arcuri
Bachus
Bishop (GA)
Bonner
Boyd (FL)
Brown, Corrine
Carson
Conyers
Cubin
Davis, Jo Ann
Dingell
Doyle
Everett
Hastert
Herger
Hinojosa
Hoekstra
Issa
Jackson-Lee (TX)
Jindal
Johnson, E. B.
Jones (OH)
Kennedy
LaHood
Linder
Lofgren, Zoe
Marchant
McCaul (TX)
Moran (KS)
Moran (VA)
Paul
Perlmutter
Stark
Visclosky
Wilson (NM)
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (during the vote). Members are advised there
are less than 2 minutes remaining on this vote.
{time} 1819
Ms. PRYCE of Ohio and Mr. BURGESS changed their vote from ``nay'' to
``yea.''
So the bill was passed.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.
____________________