[Congressional Record Volume 157, Number 15 (Wednesday, February 2, 2011)]
[Senate]
[Pages S483-S486]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
By Mr. PRYOR:
S. 256. A bill to amend the Internal Revenue Code of 1986 to allow a
credit against income tax for equity investments in small business
concerns; to the Committee on Finance.
Mr. PRYOR. Mr. President, we know we need to focus on cutting our
spending. We know we need to focus on the tax reform effort. I think
everybody generally agrees on that. Although they may disagree on what
the particulars would be, they agree we need to do those two things.
The third thing we also must do is to focus on the economy and jobs.
This is something that we have seen in this country over the last 2\1/
2\ years, where we have gone through a very harsh, very difficult
recession and we have seen an unemployment number that stays stubbornly
high. We have seen a lot of topsy-turvy economic numbers over the last
2\1/2\ years, and I believe the Congress--the House and Senate--and the
White House need to set the table for job creation and economic growth
in this country, and we need to do it in a very smart way.
Today, I am here to talk about the angel investment tax credit bill I
am introducing. I want to encourage my colleagues to consider reading
the bill and becoming cosponsors. I would love to be working on this
over the next few weeks to get a broad base of support and to get as
much emphasis on this effort as possible right now. It is one of many
job-creating pieces of legislation I am interested in in this Congress,
but I would love to get as many colleagues as possible interested now
to look at this and see if it is something we could pass sooner, rather
than later, around here.
The angel investment tax credit is modeled after the new market tax
credit, and it would provide a 25-percent Federal income tax credit for
investing in qualified early-stage small businesses. The focus will be
on advanced manufacturing, aerospace, biotechnology, clean energy, and
transportation. The bill would provide that up to $2 million per year
in tax credit-eligible cash equity investments could be made, with a
total of $10 million per small company. The goal would be that for
every $1 we put in, there would be $4 of private-sector stimulus.
This is the private sector getting back on its feet with a little bit
of grease provided by the government to get things going in the right
direction through the Tax Code. The bill I have written would authorize
$500 million per year for 5 years for these tax credits. As I said,
this proposal is expected to stimulate $2 billion per year in new
capital formation.
Let me give one quick example of how this can work. All these
companies on this chart here started with an angel investment to get
over the hump. What happens is someone will have a good idea. They
think they can innovate, they think they can produce, they think they
can have value in the marketplace, but they can't get the capital in
order to get established. They can't quite get over the hump. J. B.
Hunt company is now a $5 billion company. It employs 14,500 people and
has 400 facilities in 48 States. In 1961, J. B. Hunt had an idea and he
went to five poultry company executives with his hat in his hand asking
for money. They gave him $25,000 in seed money, and that is what he has
done with that company throughout the course of his lifetime.
There are lots of examples of folks like that--HP; there is a company
in Arkansas called NanoMech, BlueInGreen, and other companies we have
seen do this. But many of these companies are very much household
names--Google, Facebook, Amazon, eBay, and Apple. All of these
companies started with angel investment to get them through what they
call the valley of death. The valley of death is usually that period
where something has gone from the idea stage to the marketplace. They
usually need somewhere between $1 million and $4 million to get their
ideas to market.
Our bill is designed to bridge that gap and cross that valley of
death so we can see a lot of startup companies come into the
marketplace. We are looking for the next J.B. Hunt, we are looking for
the next Apple, or the next Amazon. We are trying to find the next HP,
whoever is out there who has great ideas who wants to come in and
invest. Angel investment led to the creation of 250,000 jobs in 2009
and 2009 wasn't a great year, but angel investment led to the creation
of 250,000 jobs. This represented about 5 percent of all the new jobs
in the United States, so this can have a measurable impact. This can
move the needle in the right direction.
The time is now for us to work on this. I encourage my colleagues on
both sides of the aisle to read the legislation. If they are
interested, I would like to visit with them about it. I would love to
get this bill moving through the system as quickly as possible.
______
By Ms. LANDRIEU (for herself and Mr. Kerry):
S. 257. A bill to improve certain programs of the Small Business
Administration to better assist small business customers in accessing
broadband technology, and for other purposes; to the Committee on Small
Business and Entrepreneurship.
Ms. LANDRIEU. Mr. President, I come to the Senate floor today to
discuss an issue of great importance to small businesses, the drivers
of this Nation's economy.
In the same way the interstate highway system and the railroads
revolutionized transport, connecting main streets across the Nation to
facilitate the stream of commerce; broadband technology has forever
changed the relationship between small businesses and the customers
that they serve. This is especially true for rural small businesses,
which now have direct access to new customers in major cities across
the globe through broadband connectivity. Over 95 percent of the
world's customers are located outside of our borders, and in the United
States alone, an estimated 60 million Americans use the Internet on a
daily basis. With the click of a mouse, they now have access to goods
and services from main streets around the world. With every click, our
Nation's small businesses are growing, and helping to create jobs as
well as further innovate within the U.S. economy.
Unfortunately, too many of our small businesses are missing out on
these opportunities for growth. Due to a combination of factors that
range from a lack of computer literacy to the inability to access high
speed or broadband Internet services, many entrepreneurs have yet to
capitalize on the resources available to them via the Internet. In
fact, it is estimated that fewer than 24 percent of our Nation's small
businesses routinely use e-commerce applications to sell their products
online. As a result, they are missing out on opportunities to expand to
new markets or find new customers. We must do more to help our Nation's
small businesses
[[Page S484]]
utilize advanced technologies like broadband so that they can best
compete in the global marketplace.
As Chair of the Committee on Small Business and Entrepreneurship, I
have made increasing the ability of small businesses to access high-
speed broadband Internet a top priority. That is why today, I along
with my distinguished colleague on the Small Business Committee, former
Chairman John Kerry, am introducing the Small Business Broadband and
Emerging Information Technology Enhancement Act of 2011. This critical
piece of legislation will help to level the playing field for our
entrepreneurs and small businesses by implementing key findings from
the Federal Communications Commission's 2010 National Broadband Plan.
More specifically, this legislation calls on the Small Business
Administration to take a lead role in helping our small businesses to
access broadband and other advanced technologies. To accomplish this,
the legislation requires the SBA to make three key improvements to its
core programs. First, it calls on the agency to create a Broadband and
Emerging Information Technology Coordinator to facilitate the
development of small business broadband initiatives within the agency,
and also to act as a liaison with other Federal agencies. Second, the
legislation requires SBA resource partners, such as Small Business
Development Centers, SBDCs, to provide technical assistance related to
both accessing and utilizing broadband and emerging information
technology. Finally, the bill will improve the SBA's popular 7(a) and
microloan programs by allowing borrowers to use the proceeds of their
loans to finance the purchase of broadband services, equipment or other
emerging technologies. Making these three simple changes will allow
more of our small businesses to not only access previously untapped
customers and markets; it will also allow them to become more
competitive with their foreign counterparts, fostering innovation and
job creation.
I have heard from a number of my Committee members and I know how
important this issue is to them, and I am proud to introduce this
legislation for the second consecutive Congress. I look forward to
working with them in the coming months to get this legislation to the
President's desk.
Mr. President, I ask unanimous consent that the text of the bill be
printed in the Record.
There being no objection, the text of the bill was ordered to be
printed in the Record, as follows:
S. 257
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Broadband and
Emerging Information Technology Enhancement Act of 2011''.
SEC. 2. FINDINGS.
Congress finds that, according to a report by the Federal
Communications Commission entitled ``Connecting America: The
National Broadband Plan'', dated March 2010, the Commission
recommends that--
(1) ``To fully implement next-generation technology within
its operations, the SBA should also appoint a broadband and
emerging IT coordinator. This individual would ensure that
SBA programs maintain the requisite broadband expertise,
tools and training courses to serve small businesses.'';
(2) ``Congress should consider ways to leverage existing
assistance provided through'' entrepreneurial development
programs, ``to focus training on advanced IT and broadband
applications'';
(3) ``Congress could also consider ways to support
technology training among women entrepreneurs through''
women's business centers;
(4) ``The training programs should include an entry-level
`Broadband 101' course to give small businesses an
introduction to how to capitalize on broadband connectivity,
as well as more advanced applications for IT staff.'';
(5) small and medium enterprise ``IT training should
include resources for non-IT staff, such as how to use e-
commerce tools for sales, streamline finance with online
records or leverage knowledge management across an
organization.''; and
(6) ``To facilitate the development of broadband networks,
Congress should consider allowing all agencies to set the
fees for access to rights-of-way for broadband services on
the basis of a direct cost recovery approach, especially in
markets currently underserved or unserved by any broadband
service provider. The Executive Branch should also develop
one or more master contracts for all federal property and
buildings covering the placement of wireless towers.''.
SEC. 3. DEFINITIONS.
In this Act--
(1) the terms ``Administration'' and ``Administrator'' mean
the Small Business Administration and the Administrator
thereof, respectively; and
(2) the term ``small business concern'' has the meaning
given that term under section 3 of the Small Business Act (15
U.S.C. 632).
SEC. 4. BROADBAND AND EMERGING INFORMATION TECHNOLOGY
COORDINATOR.
(a) In General.--The Small Business Act (15 U.S.C. 631 et
seq.) is amended--
(1) by redesignating section 45 as section 46; and
(2) by inserting after section 44 the following:
``SEC. 45. BROADBAND AND EMERGING INFORMATION TECHNOLOGY.
``(a) Definition.--In this section, the term `broadband and
emerging information technology coordinator' means the
individual assigned the broadband and emerging information
technology coordination responsibilities of the
Administration under subsection (b)(1).
``(b) Assignment of Coordinator.--
``(1) Assignment of coordinator.--The Administrator shall
assign responsibility for coordinating the programs and
activities of the Administration relating to broadband and
emerging information technology to an individual who--
``(A) shall report directly to the Administrator;
``(B) shall work in coordination with--
``(i) the chief information officer, the chief technology
officer, and the head of the Office of Technology of the
Administration; and
``(ii) any Associate Administrator of the Administration
determined appropriate by the Administrator;
``(C) has experience developing and implementing
telecommunications policy in the private sector or
government; and
``(D) has demonstrated significant experience in the area
of broadband or emerging information technology.
``(2) Responsibilities of coordinator.--The broadband and
emerging information technology coordinator shall--
``(A) coordinate programs of the Administration that assist
small business concerns in adopting, making innovations in,
and using broadband and other emerging information
technologies;
``(B) serve as the primary liaison of the Administration to
other Federal agencies involved in broadband and emerging
information technology policy, including the Department of
Commerce, the Department of Agriculture, and the Federal
Communications Commission; and
``(C) identify best practices relating to broadband and
emerging information technology that may benefit small
business concerns.
``(3) Travel.--Not more than 20 percent of the hours of
service by the broadband and emerging information technology
coordinator during any fiscal year shall consist of travel
outside the United States to perform official duties.
``(c) Broadband and Emerging Technology Training.--
``(1) Training.--The Administrator shall provide to
employees of the Administration training that--
``(A) familiarizes employees of the Administration with
broadband and other emerging information technologies; and
``(B) includes--
``(i) instruction counseling small business concerns
regarding adopting, making innovations in, and using
broadband and other emerging information technologies; and
``(ii) information on programs of the Federal Government
that provide assistance to small business concerns relating
to broadband and emerging information technologies.
``(2) Authorization of appropriations.--There are
authorized to be appropriated such sums as are necessary to
carry out this subsection.
``(d) Reports.--
``(1) Biennial report on activities.--Not later than 2
years after the date on which the Administrator makes the
first assignment of responsibilities under subsection (b),
and every 2 years thereafter, the broadband and emerging
information technology coordinator shall submit to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report regarding the programs and
activities of the Administration relating to broadband and
other emerging information technologies.
``(2) Report on federal programs.--Not later than 1 year
after the date of enactment of this section, the broadband
and emerging information technology coordinator, in
consultation with the Secretary of Agriculture, the Assistant
Secretary of Commerce for Communications and Information, and
the Chairman of the Federal Communications Commission, shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business of the House of Representatives a report on the
programs of the Federal Government that provide assistance to
small business concerns relating to broadband and emerging
information technologies, which shall include
recommendations, if any, for improving coordination among the
programs.''.
(b) Elimination of Vacant Position Required.--
(1) Elimination.--Before assigning the first broadband and
emerging technologies coordinator under section 45 of the
Small Business
[[Page S485]]
Act, as added by subsection (a) of this section, the
Administrator shall--
(A) identify a position within the Administration that is--
(i) vacant on the date of enactment of this Act; and
(ii) required to be filled by an employee in the Senior
Executive Service or at GS-15 of the General Schedule; and
(B) eliminate the position identified under subparagraph
(A).
(2) Restriction.--For purposes of paragraph (1), the
Administrator may not eliminate a position established by the
Small Business Act (15 U.S.C. 631 et seq.), the Small
Business Investment Act 1958 (15 U.S.C. 661 et seq.), or any
Federal statute.
SEC. 5. ENTREPRENEURIAL DEVELOPMENT.
Section 21(c)(3)(B) of the Small Business Act (15 U.S.C.
648(c)(3)(B)) is amended--
(1) in the matter preceding clause (i), by inserting
``accessing broadband and other emerging information
technology,'' after ``technology transfer,'';
(2) in clause (ii), by striking ``and'' at the end;
(3) in clause (iii), by adding ``and'' at the end; and
(4) by adding at the end the following:
``(iv) increasing the competitiveness and productivity of
small business concerns by assisting entrepreneurs in
accessing broadband and other emerging information
technology;''.
SEC. 6. CAPITAL ACCESS.
(a) In General.--Section 7(a) of the Small Business Act (15
U.S.C. 636(a)) is amended in the matter preceding paragraph
(1) by inserting ``(including to purchase equipment for
broadband or other emerging information technologies)'' after
``equipment''.
(b) Microloans.--Section 7(m)(1)(A)(iii)(I) of the Small
Business Act (15 U.S.C. 636(m)(1)(A)(iii)(I)) is amended by
inserting ``(including to purchase equipment for broadband or
other emerging information technologies)'' after ``or
equipment''.
SEC. 7. REPORT TO CONGRESS.
(a) In General.--Not later than 45 days after the date of
enactment of this Act, the Administrator, in consultation
with the Administrator of General Services, shall submit to
the Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business of the House of
Representatives a report on ways to assist with the
development of broadband and wireless technology that would
benefit small business concerns.
(b) Content of the Report.--The report submitted under
subsection (a) shall--
(1) outline the participation by the Administration in the
National Antenna Program, including the number of wireless
towers deployed on facilities which contain an office of the
Administration;
(2) information on agreements between the Administration
and the General Services Administration related to broadband
and wireless deployment in offices of the Administration; and
(3) recommendations, if any, on opportunities for the
Administration to improve broadband or wireless technology in
offices of the Administration that are in areas currently
underserved or unserved by broadband service providers.
______
By Ms. COLLINS:
S. 261. A bill to amend chapter 81 or title 5, United States Code, to
provide for reform relating to Federal employees workers compensation;
to the Committee on Homeland Security and Governmental Affairs.
Ms. COLLINS. Mr. President, I rise this evening to introduce the
Federal Employees Compensation Reform Act of 2011. This bill would
preserve the essential purpose of the Federal Workers' Compensation
Program, which is to ensure income for injured Federal and postal
workers, while at the same time it would protect the program from fraud
and abuse.
The Federal Employees Compensation Act, which is known as FECA,
provides benefits that serve as a safety net for Federal employees and
postal employees who are injured on the job, providing income until the
healing process and rehabilitation allowed them to return to work.
Obviously, we want to support those employees until they can return to
work. That is both humane and just.
Over the years, however, this program has unintentionally morphed
into an alternative retirement program that is far more financially
lucrative for recipients than the standard Federal retirement system.
Because of the way the program is structured, for some individuals,
FECA has become a gold-plated retirement system, tainted by unfairness,
perverse incentives, and the potential for abuse and fraud.
This program pays monthly benefits to about 49,000 recipients. Those
are recipients who have suffered a work-related injury and have been
approved for workers' comp benefits.
In the past fiscal year, this program cost $2.78 billion. Of that
amount, nearly $1.1 billion went to Postal Service employees receiving
these benefits.
This program has become increasingly expensive and requires some
commonsense reforms--reforms that many States have already implemented
in their own workers' comp programs.
As it currently operates, FECA includes a perverse financial
incentive that encourages older employees who otherwise would have
retired to continue to receive workers' comp benefits.
Remember, these payments are designed as a bridge to help injured
workers until they are able to return to work. That is the important
phrase--``return to work.'' This program was never intended to serve as
a higher paying alternative to the Federal retirement system.
Federal employees on FECA receive an average of 73 percent of their
gross pay. Moreover, these workers' comp benefits are tax free--another
substantial benefit.
By contrast, a Federal employee, with 30 years of service under the
Civil Service Retirement System, would average slightly more than 56
percent of his or her gross pay as a retirement benefit, and these
retirement benefits are taxed. It pays then to stay on workers' comp
for as long as possible, since many recipients receive more money under
that program than they would if they were to retire.
Let me again emphasize that these workers' comp payments are tax
free--another big difference.
In fact, according to the numbers produced by the Department of
Labor, nearly 30 percent of the current workers' comp recipients are
age 66 and older, while the average retirement age for both Federal
employees and postal workers is age 60.
With no mandatory Federal retirement age, FECA recipients are allowed
to stay on workers' comp rolls for their entire lifetimes, even when
there is no expectation that they will return to work because of their
advanced age.
Some employees have continued to receive Federal workers' comp
benefits into their hundreds. For the U.S. Postal Service alone, let's
look at the statistics.
As we can see, there are more than 15,000 recipients in total. Of
those, more than 2,000 recipients are age 70 or older; 927 recipients
are age 80 or older; 132 recipients are age 90 or older; and
astonishingly enough, 3 postal employees receiving workers' comp are
age 98 or older.
Mr. President, it is obvious these workers are not going back to
work. They clearly should be transitioned to the retirement system. I
must ask the obvious question: Is there any likelihood at all these
recipients are ever going to return to the workforce? No. Then why
aren't they transitioning to the retirement system when they reach
retirement age? Think how unfair that is to the worker who does retire,
say, at age 65 and gets a lesser amount.
Right now, the way the system is structured it does not encourage
people to go back to work or to transfer to retirement at an age when
most of their fellow workers would have retired. To prevent this
continued abuse, my bill would convert retirement-eligible postal and
Federal employees on workers' compensation to the retirement system
when they reach age 65.
Now, that is generous, Mr. President, because we know the average
retirement age is actually 60. I would choose age 65. This is a
commonsense change that would save millions of dollars that the Postal
Service, the Federal Government, and the American taxpayer cannot
afford to spend. It is also a matter of fairness, Mr. President. But we
must also examine other elements of the FECA program to determine
whether there are some additional improvements that are necessary.
Unlike many State programs, the Federal workers' compensation program
has no cap nor time limits on benefits. Moreover, the Federal
Department of Labor acknowledges a 2- to 3-percent fraud rate in the
program. I suspect it may be even higher. We need to reduce this rate
of fraud by examining whether the medical certification requirements
and other internal controls should be strengthened. Are we doing
medical reviews to see if these individuals could go back to work?
For example, a former postal worker was sentenced just a week or so
ago to 5 months in jail after pleading guilty to workers' compensation
fraud. The employee claimed he was unable to walk from his parked car
to the post
[[Page S486]]
office. But at the same time he was receiving tax-free workers'
compensation benefits, he was also operating a snow removal and lawn
care business.
In addition, about 100 other claimants per year are prosecuted by the
Department of Labor's Office of Inspector General because they received
workers' compensation and their retirement pay. These are the so-called
``double-dippers.''
Mr. President, as part of my effort to strengthen oversight of this
program, I have asked the Government Accountability Office, along with
Senator Coburn and Senator McCaskill, to audit the FECA program and
report on the length of time individuals remain on the program, the
number of recipients who exceed the standard Federal retirement age,
and how the Federal program compares to State workers' compensation
best practices. I expect these findings will lead to additional reform
proposals as the bill proceeds through the Senate.
I also intend to work with stakeholders to determine if changes in
the Federal Employees Retirement System, the FERS system, as opposed to
the old Civil Service Retirement System are necessary to make sure that
workers' compensation recipients would be treated fairly when they are
converted to FERS retirement benefits under this bill.
For example, this may require the Department of Labor to administer
the Thrift Savings Plan contributions for recipients or to require
Social Security contributions from workers' compensation recipients.
What is clear, however, is that this program is in need of urgent
reform. The program is costing too much, injured workers are not being
monitored sufficiently and helped to return to productive work,
recipients who should be in the retirement system are instead receiving
tax-free benefits, and some agencies have high claim rates, suggesting
that safety improvements are needed.
For the sake of fairness and fiscal responsibility, we must reform
this program now. Not doing so is an affront to the thousands of
Federal employees who enter the retirement system. It is a disservice
to those Federal and postal employees who truly need workers'
compensation benefits, and it is an unnecessary burden on taxpayers.
____________________