[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.

                          ____________________