[Congressional Record (Bound Edition), Volume 155 (2009), Part 13]
[House]
[Pages 17053-17062]
[From the U.S. Government Publishing Office, www.gpo.gov]




  PROVIDING FOR CONSIDERATION OF H.R. 2965, ENHANCING SMALL BUSINESS 
                  RESEARCH AND INNOVATION ACT OF 2009

  Mr. POLIS. Mr. Speaker, by direction of the Committee on Rules, I 
call up House Resolution 610 and ask for its immediate consideration.
  The Clerk read the resolution, as follows:

                              H. Res. 610

       Resolved, That at any time after the adoption of this 
     resolution the Speaker may, pursuant to clause 2(b) of rule 
     XVIII, declare the House resolved into the Committee of the 
     Whole House on the state of the Union for consideration of 
     the bill (H.R. 2965) to amend the Small Business Act with 
     respect to the Small Business Innovation Research Program and 
     the Small Business Technology Transfer Program, and for other 
     purposes. The first reading of the bill shall be dispensed 
     with. All points of order against consideration of the bill 
     are waived except those arising under clause 9 or 10 of rule 
     XXI. General debate shall be confined to the bill and shall 
     not exceed one hour, with 40 minutes equally divided and 
     controlled by the chair and ranking minority member of the 
     Committee on Small Business and 20 minutes equally divided 
     and controlled by the chair and ranking minority member of 
     the Committee on Science and Technology. After general debate 
     the bill shall be considered for amendment under the five-
     minute rule. In lieu of the amendment recommended by the 
     Committee on Science and Technology now printed in the bill, 
     it shall be in order to consider as an original bill for the 
     purpose of amendment under the five-minute rule the amendment 
     in the nature of a substitute recommended by the Committee on 
     Small Business now printed in the bill. The committee 
     amendment in the nature of a substitute shall be considered 
     as read. All points of order against the committee amendment 
     in the nature of a substitute are waived except those arising 
     under clause 10 of rule XXI. Notwithstanding clause 11 of 
     rule XVIII, no amendment to the committee amendment in the 
     nature of a substitute shall be in order except those printed 
     in the report of the Committee on Rules accompanying this 
     resolution. Each such amendment may be offered only in the 
     order printed in the report, may be offered only by a Member 
     designated in the report, shall be considered as read, shall 
     be debatable for the time specified in the report equally 
     divided and controlled by the proponent and an opponent, 
     shall not be subject to amendment, and shall not be subject 
     to a demand for division of the question in the House or in 
     the Committee of the Whole. The proponent of any such 
     amendment may modify its amendatory instructions before the 
     question is put thereon. All points of order against such 
     amendments are waived except those arising under clause 9 or 
     10 of rule XXI. At the conclusion of consideration of the 
     bill for amendment the Committee shall rise and report the 
     bill to the House with such amendments as may have been 
     adopted. The previous question shall be considered as ordered 
     on the bill and amendments thereto to final passage without 
     intervening motion except one motion to recommit with or 
     without instructions.
       Sec. 2.  The Chair may entertain a motion that the 
     Committee rise only if offered by the chair of the Committee 
     on Small Business or her designee. The Chair may not 
     entertain a motion to strike out the enacting words of the 
     bill (as described in clause 9 of rule XVIII).
       Sec. 3.  During consideration of H.R. 2965, the Chair may 
     reduce to two minutes the minimum time for electronic voting 
     under clause 6 of rule XVIII and clauses 8 and 9 of rule XX.

  The SPEAKER pro tempore. The gentleman from Colorado is recognized 
for 1 hour.
  Mr. POLIS. Mr. Speaker, for the purposes of debate only, I yield the 
customary 30 minutes to the gentlewoman from North Carolina, Dr. Foxx. 
All time yielded during consideration of the rule is for debate only.


                             General Leave

  Mr. POLIS. Mr. Speaker, I ask unanimous consent that all Members be 
given 5 legislative days in which to revise and extend their remarks on 
House Resolution 610.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Colorado?
  There was no objection.
  Mr. POLIS. Mr. Speaker, I yield myself such time as I may consume.
  House Resolution 610 provides for consideration of H.R. 2965, the 
Enhancing Small Business Research and Innovation Act of 2009, under a 
structured rule. The rule provides for 1 hour of general debate with 40 
minutes controlled by the Committee on Small Business and 20 minutes 
controlled by the Committee on Science and Technology. The rule makes 
in order five amendments printed in the Rules Committee report. The 
amendments are debatable for 10 minutes each, except for the manager's 
amendment, which is debatable for 30 minutes. The rule provides one 
motion to recommit, with or without instructions.
  Mr. Speaker, I rise in support of House Resolution 610 and the 
underlying bill, H.R. 2965, the Enhancing Small Business Research and 
Innovation Act, which reauthorizes the Small Businesses Innovation 
Research Program and the Small Business Technology Transfer Program.
  Programs such as these, programs that successfully create high-wage 
jobs and ensure our Nation's technological competitive advantage in 
wide areas from software to defense to medicine, are vital, 
particularly in light of our economic climate.
  On behalf of my constituents in Colorado whose businesses have 
prospered as a result of this program, I thank my friend from 
Pennsylvania (Mr. Altmire) for crafting this legislation. I also thank 
Chairwoman Velazquez and Chairman Gordon and their staffs for their 
hard work and efforts to bring this bill in a timely fashion before us 
on the floor of the House of Representatives. With the Small Business 
Innovation and Research Program extension set to expire at the end of 
this month, these committees have carefully debated this legislation 
and with deliberate speed have brought us a bill that is an improvement 
over existing programs and is deserving of swift passage by this body.
  Since its inception in 1982, the SBIR has made awards to more than 
94,000 projects totaling over $20.7 billion of funding for small 
businesses. The SBIR program was conceived to help small innovative 
businesses access Federal research and development funding that creates 
jobs and allows Federal agencies to benefit from the ingenuity of 
private industry. SBIR's companion, the Small Business Technology 
Transfer Program, which began in 1992, goes further by incorporating 
nonprofit research institutes. This public-private partnership program 
is a success story that's not only created jobs but has also yielded 
dividends for the Federal agencies that sponsor the program. Americans 
can be proud that Federal resources have been leveraged to create 
innovations that have benefited 11 Federal agencies that have SBIR 
programs, including the National Institutes of Health, the Department 
of Energy, and the Department of Defense. The research and development 
of new technologies and processes that is completed by private 
companies have created efficiency in the Departments that sponsor SBIR 
while freeing the resources and staffs for projects that are essential 
to the agency's mission, making our Nation safer and our citizens 
healthier.
  Mr. Speaker, the success of this program is clear. One need only look 
to the patents that have resulted from SBIR awards or the 1.5 million 
Americans employed by SBIR program participant companies to get a sense 
of the real value of this program.

                              {time}  1045

  Less tangible but equally important are the other benefits of this 
program. Across the country, communities have enjoyed the economic 
impact of investment in small business. The projects of SBIR 
participants have resulted in not only high-wage, direct research 
employment but also have generated manufacturing jobs right here in 
this country and a host of support industry jobs.
  In my State of Colorado, the synergy of Federal labs, small business, 
and academia has driven economic growth in good times and in bad, and 
acted as a stabilizing effect in the hard times. In my district, as a 
result of SBIR participation, Boulder-based Tech-X Corporation has 
created 58 high-paying jobs that earn $453,000 from sales and licensing 
of advanced software that's

[[Page 17054]]

used in private industry as well as NASA, the Department of Energy, and 
the Department of Defense.
  The legislation before us reauthorizes the program that allows small 
businesses to make big plans and helps them succeed. I remind my 
colleagues that in the midst of a recession, we have an obligation to 
our small businesses to provide as much security as possible, and that 
reauthorizing this program through 2011 provides security for long-
range planning while giving Congress the opportunity to adjust any 
deficiencies in the program. This flexibility is important when 
considering the fast pace of change in the high-tech industry.
  With H.R. 2965, we don't just reauthorize the SBIR program, we also 
modernize and improve the program. We increase funding levels for phase 
I and phase II awards to a level that's consistent with modern 
financial realities. We clarify the language regarding which companies 
can participate so that no worthwhile innovation is left behind. And we 
streamline the SBIR and STTR so that the two programs operate more 
efficiently, meet clear performance standards, and put taxpayer dollars 
to the best possible use.
  We also put a greater emphasis on bringing products to market and 
broaden the pool of businesses that participate with outreach to rural 
and underserved communities. Finally, and importantly, we increase the 
outreach to our Nation's veterans, ensuring that those who have served 
our country have every opportunity to reenter the business world and 
succeed financially when they get home.
  Mr. Speaker, today we have a great opportunity to reauthorize a 
program that the Government Accountability Office has said clearly is 
doing what Congress asked it to do in achieving commercial sales and 
developmental funding for the private sector.
  I ask my colleagues to join me in supporting this bill and the 
underlying legislation.
  I reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, I yield myself such time as I may consume.
  I want to thank my colleague from Colorado for yielding time. 
However, I must rise in opposition to this closed rule for H.R. 2965, 
Enhancing Small Business Research and Innovation Act. While there may 
be many merits to the underlying bill, this would have been a perfect 
opportunity for the majority to have opened up this process and allow 
the House to work its will.
  This is a relatively noncontroversial bill which might not even have 
needed to be considered under a rule except for the opportunity for 
some of our Democratic colleagues to get some amendments passed. We are 
in a very busy time with the appropriations process and the schedule 
very, very full this week, and had we done this, again, under an open 
rule, I think the process could have gone very, very quickly.
  However, the majority has continued its process of shutting out not 
only the minority, but many of their colleagues by not allowing their 
amendments to be made in order. So we will oppose this rule on that 
basis.
  With that, Mr. Speaker, I reserve the balance of my time.
  Mr. POLIS. One minor correction, to the gentlelady from North 
Carolina. The rule is a structured rule as opposed to a closed rule. I 
know that my colleague on the Rules Committee is aware of the 
difference as well.
  Specifically, this rule calls for five amendments to be in order, 
including three Republican amendments and two Democratic amendments. I 
think it's a very fair rule. There were 34 amendments that were 
submitted to the Rules Committee. Thirteen of those were withdrawn by 
the sponsors, and two were nongermane.
  With that, I would like to yield 2 minutes to the gentleman from 
Georgia (Mr. Barrow).
  Mr. BARROW. I thank the gentleman for yielding. Mr. Speaker, I rise 
in support of H.R. 2965, the Enhancing Small Business Research and 
Innovation Act, because I believe this bill is vital to modernizing 
Small Business Innovation Research and Technology Transfer programs.
  I'm also pleased that this bill includes a proposal I sponsored last 
year that will establish a grant program for minority colleges and 
universities to partner with nonprofits. Working together, nonprofits 
and minority colleges and universities will develop relationships with 
industries and small businesses that will expand minority-owned small 
business opportunities.
  Small businesses are the engine that drives the American economy, and 
this act will help grow small businesses where both the need--and the 
opportunity--are the greatest. I believe this bill is critical to 
sustain job growth, and exactly the kind of legislation that our Nation 
needs right now, and I urge my colleagues to support the rule and vote 
for it.
  Ms. FOXX. I now yield 4 minutes to my colleague, the gentleman from 
Arizona (Mr. Flake).
  Mr. FLAKE. I thank the gentlelady for yielding. I rise in opposition 
to this rule. I submitted a very noncontroversial amendment to the 
Rules Committee that would have prevented congressional earmarking to 
any of the funds appropriated to the Federal agencies while carrying 
out these programs.
  My amendment was germane. It would have been in order, had they 
simply ruled it in order. This same amendment has been added several 
times both by voice vote and by roll call vote to several other pieces 
of legislation. So there's no controversy here. But I have to wonder 
why they wouldn't allow this amendment. And let me just speculate for a 
minute.
  Under this program, which continues to grow, according to CRS, the 
SBIR awarded $45 million for nearly 700 projects in 1983--the year it 
was established. By the time we reached fiscal year 2006, more than 
$1.8 billion was awarded to almost 6,000 projects.
  Now these are projects that are awarded by the SBA based on merit, 
for the most part, I guess. That's the way the program is set up, as it 
should be if you're going to have a program like this. I can't pretend 
to be a fan of this program, but if you are, you allow the projects to 
be distributed--the money for projects, based on merit.
  The problem is, as we have discovered here in Congress, one way to 
ingratiate yourselves to your constituents and to win reelection is to 
earmark those kind of funds for projects in your home district and to 
circumvent the process of merit that should go on with the Federal 
agencies. That's what we have done in program after program after 
program after program.
  We were told, for example, when we had the Homeland Security 
Department established, and we started appropriating money to it, We 
will never earmark these funds. Don't worry, we're not going to earmark 
it. Well, guess what? We're already earmarking. The last bill that came 
to the floor, the Homeland Security Bill, had hundreds of earmarks in 
it.
  For example, there's a program called the pre-disaster mitigation 
program. It's supposed to be for Homeland Security to award grants to 
help communities prepare for disasters.
  Well, guess what? Already a quarter of those funds are lopped off the 
top, earmarked, mostly by appropriators and powerful committee chairs, 
to their districts. In fact, I think the last figures were 70 percent 
of the money that was earmarked was earmarked by fewer than 25 percent 
of this body. So it's a spoils system.
  Now this, when you're awarding money to 6,000 projects, this is 
simply irresistible to Members of Congress who seek to earmark. Mark my 
words, if we don't put protections in here, these funds are going to be 
earmarked.
  And so the failure to allow the amendment to stipulate that none of 
these funds should be earmarked should be taken as notice that we're 
going to start earmarking these funds. And that is unfortunate.
  It's part of a pattern, though, that we've seen this year. We are 
actually bringing appropriation bills to the floor under rules, under a 
structured or closed rule, where very few amendments are allowed to 
even be offered.
  We will be considering the agriculture bill. There are hundreds and 
hundreds and hundreds of earmarks in that bill. We will have amendments 
to

[[Page 17055]]

strike maybe a half dozen. That's not transparency and accountability. 
What good is transparency if you can't actually challenge a number of 
these earmarks?
  The real purpose of all this narrowing down the number of amendments 
that can be offered, believe me, is that we will be appropriating for 
the Department of Defense later this month. There will be more than a 
thousand----
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. FOXX. I yield an additional 1 minute.
  Mr. FLAKE. There will be well over a thousand, if history proves 
correct here, over a thousand earmarks in the Defense bill, most of 
which will be earmarks to private companies, most of which will be in 
proximity to campaign contributions that will be returned--the circular 
fundraising that has become a fixture over the past couple of years 
under Republicans and Democrats in this House.
  The purpose of narrowing the amendments that can be offered is so we 
won't have to face those kind of questions on the House floor. Is this 
money being appropriated for this company? Is this company or their 
executives contributing back to the Member who secured the earmark?
  People don't want those questions being asked on this floor. That's 
why you're seeing amendments that won't be allowed in order here. 
That's what this is about. And it's a shame. We should do better than 
that. We owe this institution better than that.
  With that, I urge opposition to the rule.
  Mr. POLIS. The bill before us today has no earmarks. To elaborate 
upon the processes for awarding funds, I'd like to yield 3 minutes to 
the chairman of the Subcommittee on Technology and Innovation, the 
gentleman from Oregon (Mr. Wu).
  Mr. WU. I thank the gentleman. I want to correct the impression that 
my friend and colleague from Arizona left. I respect him for his 
consistency in pursuing certain topics, but I believe that on this 
particular topic he has completely missed the mark.
  Federal research dollars in this program are allocated on a merit, 
peer-reviewed process. That applies to the 97.5 percent of the moneys 
that are allocated for research. The products, the fruits of that 
research are sometimes commercializable, and that's why there's a 2.5 
percent set-aside for the SBIR program.
  Now, that 2.5 percent, which is what we're talking about here today, 
that 2.5 percent is given out by each of the agencies that sponsor that 
research on a merit-based process that is not subject to congressional 
influence of any kind whatsoever. It is done by the agencies by peers 
who are professionals in the field.
  And any impression that my friend and colleague from Arizona has left 
that there is congressional influence in earmarking is completely 
wrong. He should take his battles about earmarks to an appropriate 
field, and not this one, where both the 97.5 percent of the research 
dollars that are granted as a peer-review process is awarded on merit, 
and the 2.5 percent of those research dollars that are awarded under 
this SBIR program is also awarded by peers in the field based on merit.
  This has nothing to do with any congressional earmarking process, and 
any allegation to the contrary just completely misses the mark.
  Mr. FLAKE. Will the gentleman yield?
  Ms. FOXX. Mr. Speaker, I yield 1 minute to the gentleman from Arizona 
(Mr. Flake).
  Mr. FLAKE. I thank the gentlelady for yielding. I thank the gentleman 
from Oregon for clarifying that. All my amendment would do is say that 
this program should continue to be based on merit rather than be 
subject to congressional earmarking.
  I appreciate what the gentleman has said. Unfortunately, we have seen 
program after program after program that started off as a merit-based 
program all of a sudden be earmarked later. All this amendment would 
have done is what we have done in many other bills by voice vote and 
roll call, to simply stipulate that in future, or for the life of this 
authorization, those moneys that are meant for merit-based programs are 
not earmarked by Congress.
  And so I thank the gentleman for clearing that up. I just wish we 
would have made this in order. The fact that we didn't worries me 
because this becomes irresistible to Republicans and Democrats alike to 
start earmarking these funds.
  Mr. POLIS. With the Nation facing a historically tight credit market, 
H.R. 2965 makes it easier for small businesses that participate in SBIR 
to find capital and lets the business owners--not Washington 
bureaucrats--decide how to raise that capital.
  The commonsense improvements to the SBIR program, clarifying its 
mission and which businesses qualify, will make an already successful 
program run more efficiently and yield better results for taxpayers and 
for American businesses.
  The new focus on bringing products to market will help create even 
more job growth in manufacturing as well as support industries. America 
can be competitive and will continue to be competitive in manufacturing 
jobs in the high-tech sector. As technology improves at a lightning 
pace, the investments we make today in high-tech companies will ensure 
our Nation's technological advantage for many years to come.

                              {time}  1100

  The success of these companies brings new technology, efficiency and 
economic activity to Federal agencies and private industry alike. But 
more importantly, these successes will spark interest in science and 
technology in our youth. The advances we make now need a steady 
pipeline of new lines to keep us on track. We can leave no better 
legacy to the next generation of Americans than our example of 
intellectual prowess. Our colleagues on the Small Business Committee 
and the Science and Technology Committee understand the importance of 
taking action now for a stronger economic future. It is for this reason 
that both committees voted unanimously to bring this legislation to the 
floor of the House of Representatives.
  Mr. Speaker, let us follow the example of our colleagues by putting 
partisanship aside and reauthorizing this program which has been so 
beneficial for our constituents. Let us show the American people that 
this is what we can accomplish when Democrats and Republicans work 
together for the common good.
  I reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Manzullo).
  Mr. MANZULLO. Mr. Speaker, I rise in opposition to the rule. There 
were several germane amendments submitted--including amendments by 
Congressmen Markey and Gingrey--that would have corrected a fatal flaw 
in this legislation. The bill sets the precedent to redefine what it 
means to be a small business by allowing large business interests to 
take advantage of a small business program.
  I am not disparaging the venture capital industry. It's extremely 
important. It plays a great part and a vital role in our economy 
because venture capitalists fill a vacuum that banks simply cannot 
touch. Banks generally do not lend money for long-range research 
projects that are based on little collateral. However, because venture 
capitalists generally do not get involved in first-stage seed 
investment--the equivalent of Phase I funding in the SBIR program--
efforts to dramatically expand the SBIR program to VC-owned firms will 
come at the expense of the truly small independent inventor looking for 
the first phase of feasibility funding.
  According to the latest data from the Small Business Administration, 
venture capitalists funded only 237 startup or seed investment deals 
for $894 million in the entire United States in 2005. In contrast, the 
SBIR program funded 6,010 startup or seed investment deals for $1.86 
billion in 2005. In addition, the venture capitalist seed deals were 
primarily concentrated in just five States--California, Maryland, 
Massachusetts, Pennsylvania and New

[[Page 17056]]

 York--but SBIR awards were more dispersed geographically throughout 
every State in America.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. FOXX. I yield the gentleman from Illinois 1 additional minute.
  Mr. MANZULLO. That's the problem, Mr. Speaker, because the bill comes 
up as a small business bill, but the language has been changed to allow 
these large venture capitalist firms to displace funding which was 
designated for small businesses for years. I chaired the Small Business 
Committee for 6 years; and year after year this issue came up as to 
what size company should be involved in getting this type of grant. It 
just does not make sense to now expand the definition of small business 
to include many of these venture capital firms; and that's why without 
the protections of the Markey amendment or the Gingrey amendment, 
funding designed for small businesses simply will go away. So I would 
urge the House to oppose the rule and to vote against the bill.
  Mr. POLIS. I yield myself such time as I may consume.
  To address the points made by my colleague Mr. Manzullo of Illinois, 
previous to this change, we effectively require that recipient 
companies take government money in Phase I in order to be eligible for 
Phase II. By making this change, we're saying, You know what, you don't 
need to rely on the government. You can raise private capital to make 
yourself eligible for Phase II. And we can actually have more funding 
available for Phase II by reducing the need for Phase I money by using 
private capital sources rather than government capital, rather than the 
taxpayer money that would otherwise go into it.
  We also have protections to ensure that a majority of the company is 
owned by those inventors and entrepreneurs who start the company. 
Venture capital investment is typically 20, 30, 40 percent of the 
company. Under this bill, we also stipulate that it can't be a majority 
of the company.
  Mr. MANZULLO. Will the gentleman yield?
  Mr. POLIS. I yield to the gentleman from Illinois.
  Mr. MANZULLO. The bill clearly shows that a VC couldn't own a 
majority of a company that gets an SBIR grant, but the majority of the 
stakeholders in the majority-owned company have to be individuals. It 
still allows the big VC companies to come in and displace the money 
that otherwise would go to small businesses. Venture capitalists do 
tremendous work; but certainly not in this situation, where the money 
gets diverted from the big companies to the little guys.
  Mr. POLIS. Reclaiming my time, why should companies be forced to 
accept government grants when there's private capital out there that 
would be willing to save taxpayer money, invest in those companies, 
bring that technology to the next stage and preserve that taxpayer 
money to be able to invest in the commercialization of those products 
and technologies?
  With that, I would like to yield 2 minutes to the gentleman from 
Oregon (Mr. Wu), the chairman of the Subcommittee on Technology and 
Innovation.
  Mr. WU. I thank the gentleman.
  I want to address the points raised by Mr. Manzullo, which I also 
believe to be erroneous. First, the history of this program has been 
that from 1982 until 2003, venture capital investment in SBIR companies 
was not restricted in any way whatsoever. The National Academy of 
Sciences studied this issue and said that during that period, there is 
absolutely no evidence that VC funding helped crowd out any small 
businesses. The legislation then and the legislation today limits the 
businesses that receive SBIR grants to those with 500 employees or 
less, the quintessential definition of what a small business is.
  Now what happened in 2003 is that a single administrative law judge 
in Boston, Massachusetts, interpreted a domestic ownership provision in 
the law to say that it has to be owned by real American people as 
opposed to American VCs. That was permitted before. The 2003 ruling has 
been expanded, in effect, to bar majority VC ownership. That is wrong. 
It prevents the public sector from giving money under this program to 
very good technologies. It prevents companies from raising money from 
both the public sector and the private sector, and this argument is 
completely erroneous about big VCs. We are talking about small 
companies. We are talking about small companies getting SBIR grant 
funds, and those small companies may have board members from VCs, but 
they are independent of VCs.
  The SPEAKER pro tempore. The time of the gentleman from Oregon has 
expired.
  Mr. POLIS. I yield the gentleman 1 additional minute.
  Mr. WU. Quite frankly, I do not know of a single VC that wants to 
spend the time or energy controlling an investment company. What they 
want to do is to get their money out with a big return. What the 
gentleman is concerned about is a scenario that just doesn't occur in 
the real world.
  Paradoxically, what the gentleman is pressing is a position that 
actually penalizes the smaller companies because it is precisely the 
smaller company that has to give away more of its equity to VCs to 
raise the same amount of money. So if you are a three-employee company, 
you might have to give away 60 percent of your company to raise $1 
million; whereas, if you have 30 employees or 300 employees, you might 
only give away 10 percent of your money to raise the same amount of 
money. Paradoxically, what the gentleman is asking for actually 
penalizes small startup companies.
  Ms. FOXX. Mr. Speaker, I yield the gentleman from Illinois 1 
additional minute.
  Mr. MANZULLO. When I chaired the Small Business Committee, I had a 
steady trail of VCs coming to my office wanting to change the law, 
pleading poverty. And I asked one gentleman, What's your net worth? He 
said $40 million, and the meeting ended.
  The problem with this bill is that it will crowd out the little guys, 
for whom it was originally intended. And the decision that was 
correctly made by the judge, that these are very special set-asides--
2.5 percent are designed for the little guys, and the big guys can go 
after the 97.5 percent--and what little crumbs are left for the little 
guys will be eaten away by allowing the VCs to come in under the 
proposed changes. That's my concern with this, and that's based upon 6 
years of people lobbying me to change the bill, and I refused to do 
that when I chaired the Small Business Committee.
  Mr. POLIS. Mr. Speaker, I would share with my colleague from Illinois 
that in my previous career before I came to Congress, I had been on 
various sides of this equation. I have been a venture capital investor. 
I have been in venture-backed companies. I have been a limited partner 
in venture capital companies, and I have raised money from individual 
investors as well.
  I can't see any good reason why the government should discriminate on 
the form of capital based on the form of capital the company has 
raised. It might be debt financing from a bank. It might be private 
capital from individual investors. It might be professional venture 
capital. It might be a grant under DARPA. It might be a Phase I grant 
under SBIR. These are all valid ways to raise money. These are all 
perfectly fine ways. Personally, I think it's better when they raise 
money from people rather than taxpayers. If they raise money from 
venture capital investors, that's a plus. If they raise money from a 
bank through credit, that's a plus too.
  The truth is, a lot of types of businesses aren't bankable. They 
can't borrow. They can't leverage because they are not buying a 
tangible asset with that. If you are in software, if you are in e-
commerce, you can't borrow to develop that company. You need to rely on 
equity capital. By discriminating based on equity capital, which is 
what we are talking about with venture capital, you are basically 
favoring companies that have a bankable asset that they're purchasing.
  Now I'm sure both kinds of companies are critical for the future of 
our

[[Page 17057]]

economy, but many of the very technology companies we need to support 
and are going to be a powerful growth sector in biotech, in computer 
technology, are going to be companies that can only raise money through 
equity capital. And by allowing them to do that, through allowing 
venture capital- backed companies to be eligible for these programs, 
we're furthering our engine of economic growth.
  I would like to yield 2 additional minutes to the gentleman from 
Oregon (Mr. Wu).
  Mr. WU. I thank the gentleman.
  Mr. Speaker, to address the points raised by the gentleman from 
Illinois, this is a program that permitted unlimited venture capital 
participation from 1982 until 2003. The National Academy of Sciences 
studied the program then and now. There is absolutely no evidence that 
VC investment crowds out any small business whatsoever. That was the 
finding of the National Academy of Sciences. They also found that by 
permitting venture capital majority participation companies to apply 
for SBIR, it improved the quality pool of the applicants for SBIR 
funds.
  Now I think one needs to understand that there are two very different 
segments of this industry. One is the industries that Mr. Polis and I 
are more familiar with, in biotech and high tech where companies 
typically pick up one of these grants or maybe just a couple, and they 
rocket up or grow and become a public company to get some VC 
investment. But it's a hockey puck growth curve. It's the classic high-
tech startup. There is another group of companies that basically is 
concentrated around the Defense Department; and they are, in effect, 
the research arm of the Defense Department. They are steady-state small 
businesses that are going to have a stream of SBIR and STTR grants, and 
this is how they fund themselves. Both are valid business models. This 
has been a very acrimonious battle between these two very different 
groups of folks who haven't taken enough time to understand each other.
  Quite frankly, I came from the high-tech, high-growth model; but I've 
tried to come to understand this other defense-oriented, steady-state, 
many SBIR grants model.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. POLIS. I yield 1 additional minute to the gentleman from Oregon.

                              {time}  1115

  Mr. WU. What we have in the bill is a careful set of protections so 
that this is approved by many of the parties around the table, but 
evidently not all. We are going to permit majority venture capital 
ownership again to improve the quality of applicants so that we choose 
the proper technologies and the best technologies for both the public 
and the private sectors. There would be certain restrictions on VCs 
that are owned by large corporations, and no VC could control the board 
of any of these applicants.
  The provisions in the bill are carefully crafted. They are 
emphatically in the interests of the smallest investees, that is, those 
small companies that have to give away more of their equity to get a 
certain amount of money from a venture capitalist. Those are the 
companies that have been disqualified under the ALJ ruling, under the 
judge's ruling, and the historic norm from 1983 to 2002 will be 
partially restored by this bill.
  Ms. FOXX. Mr. Speaker, it is my understanding that this program has 
resulted in many good things happening in our country. We are now going 
to be spending this year $260.5 million on this program; however, I 
think that we need to call attention to the many ways that the 
Democrats are harming small businesses in our country.
  This is a small program, but what they are going to be doing, in 
terms of what we have understood from the Democrat health plan that is 
going to be introduced later this week, from press reports, is they are 
going to partially pay for it by imposing a surtax on individuals with 
incomes in excess of $250,000 a year. But because most small businesses 
do not pay corporate income taxes and, instead, pay taxes on small 
business income on their individual returns, small businesses are going 
to be particularly hard hit by this tax increase. While precise data is 
not currently available on the Democrat proposal, data is available on 
many small businesses that pay taxes at the top rate.
  I want to talk a little bit about that. We have the results of a 
survey that the National Federation of Independent Business has done. 
It shows that out of all small businesses, 6.4 percent of those with 
one to nine employees, 21 percent of those with 10 to 19 employees, and 
40 percent of those with 20 to 249 employees would be impacted by a tax 
increase on incomes above $250,000.
  So while the Democrats are giving to a small group of small 
businesses in this country through this program, they are going to be 
hurting many, many more small businesses. And this, I think, in some 
ways is a sop to our small business community when what Republicans 
want to do is help all of our small businesses, and we can do that by 
keeping our taxes lower instead of raising them on them.
  I would now like to yield 2 minutes to my colleague from Iowa (Mr. 
King).
  Mr. KING of Iowa. I thank the gentlelady from North Carolina for 
yielding and for managing this time.
  Initially I remarked that it is refreshing to at least hear from a 
Democrat or two who sound like they do believe and understand in 
business. That is refreshing. I would think that you would not be 
Democrats for that reason. I appreciate the dialogue, and I look 
forward to a lot more. Maybe we can get to the point on how this free 
market system really works.
  I'm curious about this metaphor, ``hockey puck growth curve.'' I'm 
looking forward to when the gentleman from Oregon can explain that. I 
think that is the ``Obama hockey puck growth curve,'' which is when you 
drop the hockey puck in the middle of the arena. That is what has 
happened with our growth curve since this stimulus package was passed, 
but I will let him explain that a little further on his own time.
  I wanted to raise the issue, Mr. Speaker, of two amendments that were 
refused by the Rules Committee that I offered in committee and in the 
full Small Business Committee. We should be about equal opportunity 
under the law and opportunities for everyone to succeed in this country 
in a free market economy; yet we have a situation where we are going to 
approve organizations to be helping out to advance the information and 
the grants would go to the organizations, and yet one of the 
organizations that could qualify is ACORN, which has produced over 
400,000 fraudulent voter registrations and admitted to that. They and/
or their employees are under investigation in 14 States. There is a 
clear consensus that they are an organization that has at least the 
image of a criminal organization, and there were investigations. We are 
in a situation where they are coming into the census as well, and this 
Congress can't have a voice on whether we are going to approve Federal 
taxpayer dollars that might go to ACORN? I just ask, eliminate ACORN 
from this. No. We can't have a vote on that on the floor of the House, 
according to the Rules Committee.
  By the way, we also have special preferences that are set up in this 
bill that I believe are unconstitutional, equal protection under the 
law. And these preferences go to either underserved organizations or 
disabled veterans or women or minorities. Now, if you're not a disabled 
veteran, the only way you qualify is as a woman or a minority----
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Ms. FOXX. I yield the gentleman 30 additional seconds.
  Mr. KING of Iowa. I thank the gentlelady.
  Now, I would ask the indulgence of this body to think about what that 
means. When we have equal protection under the law, a Constitution that 
should protect us all equally, that is our guarantee, and yet we have 
legislation before this Congress that defines that it will go 
especially to women and minorities, and if you look at the

[[Page 17058]]

cross-section of American society, and it specifically, by definition, 
excludes white men, I think it is discriminatory. I think that we need 
to preserve these resources to go to disabled veterans and underserved 
areas. That was my amendment. It was turned down by the Rules 
Committee. And, by the way, the Chair declared my amendment to ACORN to 
be partisan.
  Mr. POLIS. To address the points of the gentlelady from North 
Carolina, when we are talking about this bill, we are talking about a 
pro business bill. There are no taxes in this bill. This is all 
budgeted for already in the budget that was passed.
  The Democrats have already delivered a number of tax cuts for small 
businesses. Tax cuts are certainly part of the solution. We have done 
that through the American Recovery and Reinvestment Act for small 
businesses. Soon we will be taking up health care, which will be a 
tremendous benefit to the small businesses of this country.
  This bill, H.R. 2965, which invests in small businesses, is supported 
by the Advanced Medical Technology Association, the Biotechnology 
Industry Association, the Medical Device Manufacturers Association, the 
National Venture Capital Association, and the U.S. Women's Chamber of 
Commerce. It is also supported by many of the patient advocacy groups 
who recognize that this type of investment will help cure the health 
concerns and address the health concerns of many American families. It 
is supported by the Cystic Fibrosis Foundation, the Parkinson's Action 
Network and the ALS Association.
  These are all critical reasons that, for American small business to 
create jobs and for the health of our population and the continued 
growth of our economy, we need to pass this rule and pass this bill.
  I would like to reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, I find it interesting that my colleague from 
Colorado would be praising a budget that was passed earlier this year 
that has the seeds of the largest tax increase in the history of this 
country and will impact all small businesses adversely.
  I now would like to yield 3 minutes to my colleague from Georgia (Mr. 
Gingrey).
  Mr. GINGREY of Georgia. Mr. Speaker, I thank the gentlelady for 
yielding.
  With all due respect to my colleague from Oregon, my former chairman 
of the Subcommittee on Technology and Innovation, I do rise in 
opposition to this rule.
  I had an amendment that would have addressed my concerns. While I am 
generally supportive of the bill, I have some concerns relating to 
venture capital involvement, and unfortunately, the rule does not 
provide for any commonsense amendment offered by Members on both sides 
of the aisle that would address these concerns. The gentleman from 
Illinois (Mr. Manzullo) spoke just a few minutes ago, a former chairman 
of the Small Business Committee, about these same concerns.
  Venture capital helps small business entrepreneurs gain credibility 
on solid ideas that have the potential for commercialization. However, 
while venture capital serves as an important component in facilitating 
small business success, it must also be closely monitored and 
scrutinized. Because these grants are intended, Mr. Speaker, for small 
business research and development, we must ensure that venture capital 
does not represent a majority of the financial interest within the 
company of SBIR applicants.
  Existing law and regulation limits a single venture capital firm from 
owning 49 percent of the interests of the company applying for the 
grant. This bill leaves open the possibility that multiple venture 
capital firms could own the majority of the financial interests within 
the company. Anyone could own up to 30 percent, or they could own 90 
percent of the company. So I believe this goes against the spirit of 
the program, Mr. Speaker.
  The SBIR program is designed to provide assistance to a small 
business that may have an idea that can be considered a diamond in the 
rough without necessarily having financial backing to bankroll a 
promising idea. We had hearings on this issue, and venture capitalists 
came before us, and they were in the business of, it seemed to me, Mr. 
Speaker, with all due respect, of churning this program, and I just had 
great concerns about that. I think overall it is a good program.
  Mr. Polis, you can put me down as supporting the program with all 
those other organizations that you mentioned, but we should have 
improved this. We should have had better oversight on venture capital.
  Mr. POLIS. Mr. Speaker, again, there is no good economic reason to 
discriminate on the form of capital, the form of private investment 
that goes into companies. When you have a company that borrows, a 
company that has access to credit, one could argue if they are worth 
less than they borrowed, the bank owns 100 percent of the company, and 
yet that company could, in fact, be eligible for the SBIR grant. The 
control provisions are clear. The control of the company cannot reside 
with the venture capitalist. I think this is a very positive step 
towards the direction in making sure that, regardless of the source of 
capital of the company, we invest in the very best technologies, 
products and services for the American people.
  With that, I would like to yield 2\1/2\ minutes to the gentleman from 
Oklahoma (Mr. Boren).
  Mr. BOREN. I want to thank the chairwoman and ranking member of the 
Small Business Committee for bringing this legislation to the floor, 
and of course, I support the rule. The Small Business Innovation 
Research, SBIR, program, is an effort by Congress to increase the 
portion of Federal research and development dollars provided to small 
businesses.
  Noticing that small businesses were being crowded out of government 
R&D grants by large corporations, Congress established the SBIR 
program. This program guarantees small businesses a portion of the 
Federal Government's large R&D budget.
  Mr. Speaker, by any reasonable measure, the SBIR program has been a 
tremendous success, but some Members of Congress have raised concerns 
about how the funds are allocated. Critics have argued that certain 
business sectors receive too large a share of the available Federal R&D 
dollars and that certain demographics have little success obtaining any 
SBIR award money. This bill, brought to the floor by the Small Business 
Committee, makes a strong effort to address these issues. Found in the 
legislation are attempts to reach out to minority-owned businesses, 
businesses owned by women, and most importantly, veteran-owned 
businesses.
  It is with the same spirit that I ask the Small Business Committee to 
consider my language, which directs agencies with an SBIR program to 
make a concerted effort to reach out to Native American and tribally 
owned businesses. My State of Oklahoma is home to 38 federally 
recognized tribes, 17 of which reside in my district. It is my hope 
that my language, found in the manager's amendment, will make it easier 
for Native American-owned businesses to obtain these valuable SBIR 
awards.
  Again, I want to thank the chairwoman and ranking member of the Small 
Business Committee for accepting my proposal. I strongly urge my 
colleagues to support this legislation and the rule.
  Ms. FOXX. Mr. Speaker, we are not talking about taxes being in this 
bill. Many, as I have said, support this legislation. However, we do 
know that this is a drop in the bucket compared to the jobs that the 
Democrats are killing in this country right now, and I'm going to talk 
a little more about that later. But just the bill that passed just 
before we went home for the Independence Day break, the cap-and-tax 
bill, we know is going to eliminate between 1 and 7 million jobs in 
this country if it is enacted. So many, many more jobs are being killed 
by this Congress than are being created by this small bill.
  I would now like to yield 2 minutes to our colleague from New York 
(Mr. Lee)
  Mr. LEE of New York. I want to thank my friend for the time and to 
rise to strongly oppose the rule for H.R. 2965.

[[Page 17059]]

  Because I strongly support the SBIR and STTR programs, I tried to 
strengthen this legislation by offering a simple amendment that would 
help ensure their focus remains on their original mission, to support 
the true small businesses, the family-owned startups that rely on these 
programs as their main source of seed capital.
  Embedded in this legislation is an erroneous provision that makes 
venture capital-funded companies eligible to participate in these two 
critical grant programs.

                              {time}  1130

  This is a serious flaw. I have major concerns about the potential for 
highly organized and well-funded venture capital organizations to swamp 
the system and crowd out those small businesses, those small businesses 
that are creating the jobs in this country, from getting access to 
capital. Many of these small businesses reside in my district here in 
western New York, and there is such a hard time right now trying to 
stay afloat. This bill, now allowing venture capital to come in, is the 
wrong message.
  This sentiment has been echoed by members of my 26th District 
advisory board. One of the members wrote: ``It appears likely that the 
changes proposed in the bill will result in a distribution of dollars 
to areas that have a greater number of venture capital-backed 
companies, such as Massachusetts and California.''
  My amendment was not accepted, which is unfortunate, because just 
last year the Senate forged a sensible bipartisan compromise on this 
issue. Hopefully, they will play a similar role now given the House's 
failure to lead on this issue.
  Washington is simply not doing enough to support small businesses in 
these tough economic times. That's why I urge my colleagues to vote 
down this rule so we can craft a stronger bill.
  Mr. POLIS. Again, I think there is, from the other side of the aisle, 
somewhat of a misunderstanding with regard to what venture capital is. 
It's as valid a way to finance a company as anything else. It has 
nothing to do with whether the company is large or small.
  There are provisions in here, in the bill, that will require that the 
company is, in fact, a small company. Whether they receive their 
financing from a bank, from individual investors, from labor financing, 
which means people not taking a salary and kind of working for free or 
on spec, there is a variety of ways to finance companies. And it 
shouldn't be the business of the government to discriminate based on 
how a particular company chooses to finance itself.
  With that, I would like to yield 1\1/2\ minutes to the gentleman from 
Virginia (Mr. Perriello).
  Mr. PERRIELLO. Mr. Speaker, I rise in support of the Enhancing Small 
Business Research and Innovation Act. Small businesses drive economic 
growth and create over two-thirds of new jobs. They play a vital role 
in research and development of new technologies. Small businesses are 
at the cutting edge of the new clean energy economy.
  Before leaving for the 4th of July, we bravely passed an energy bill 
declaring our independence from oil executives and petro-dictators. As 
we return to do the people's business, we must pass legislation that 
will help our small businesses drive and promote the research in energy 
and alternative fuels.
  There are many businesses in my district leading the Nation on new 
technology, from the production of biodiesel at Red Birch in Henry or 
Windy Acres in Pennsylvania, to nanotechnology at Luna nanoWorks or 
NextGen Technology around Danville. We must ensure that our small 
businesses, the dynamic engine of our economy, are not left behind in 
the conduct of new breakthrough research.
  While I share concerns about opening the program up to venture 
capitalist firms, I urge my colleagues to support the small business 
owners over the petro-dictators. Vote for science. Vote for this bill.
  Ms. FOXX. Mr. Speaker, I would now like to yield 3 minutes to our 
distinguished colleague from Michigan (Mr. Ehlers).
  Mr. EHLERS. I thank the gentlelady for yielding.
  I am pleased that the bill before us today leaves the amount set 
aside for extramural research budgets of 2.5 percent for the SBIR and 
0.3 for the STTR programs and that it remains unchanged from the 
current law. Last year the House considered legislation which would 
have increased the set-asides for these programs. However, an amendment 
I offered at that time on the floor of the House to leave the set-
asides unchanged was voice-voted on the floor and approved.
  There is a good reason for this. If we do want to increase the amount 
of money going into the SBIR and STTR programs, the money should come 
from increasing the allocations to the basic research programs from 
which these particular programs receive a percentage. I believe that 
the amendment I offered last year proved to be noncontroversial because 
of the overwhelming support for increasing the funding for these 
important programs by increasing the overall research funding at the 
agencies. I understand, however, that the Senate version of this bill 
does not do that, but increases the set-aside.
  By increasing the set-aside, we will only eat away at the base 
funding for research available to our scientific agencies. I would much 
rather see us fight for overall extramural research funding increases, 
which will equivalently benefit the innovation and tech transfer 
activities of these programs. And I certainly hope that the House 
conferees will stand strong on this issue in conference with the 
Senate. The House has done the right thing, and we must support our 
conferees on that point.
  A coalition of more than 100 scientific and professional societies, 
universities and research institutions have written a letter of support 
for maintaining their current allocation levels, stating that an 
increase in set-asides ``would restrict competition for $1 billion in 
Federal research dollars when future funding levels are uncertain.''
  Another letter from the Association of American Universities asserts: 
``We believe there is no justification for such increases, especially 
as such increases would come at the expense of peer-reviewed basic and 
applied research programs.''
  I submit a copy of this letter and another similar one for the 
Record.

                                                     July 7, 2009.
     Re H.R. 2965, the Enhancing Small Business Research and 
         Innovation Act of 2009.

     Hon. Nydia Velazquez,
     Chairwoman, Small Business Committee, House of 
         Representatives, Washington, DC.
     Hon. Sam Graves,
     Ranking Member, Small Business Committee, House of 
         Representatives, Washington, DC.
     Hon. Bart Gordon,
     Chair, Committee on Science and Technology, House of 
         Representatives, Washington, DC.
     Hon. Ralph M. Hall,
     Ranking Member, Committee on Science and Technology, House of 
         Representatives, Washington, DC.
       Dear Chairwoman Velazquez, Chairman Gordon, Ranking Member 
     Graves and Ranking Member Hall: The undersigned, patient 
     advocacy organizations, scientific and professional 
     societies, higher education associations, and research 
     institutions, write to express our support for your efforts 
     to reauthorize the Small Business Innovation Research (SBIR) 
     at its current allocation level. We stand together in 
     opposition to a provision in the Senate SBIR/STTR 
     Reauthorization Act of 2009 (S. 1233) that would increase the 
     allocation for the Small Business Innovation Research (SBIR) 
     program from 2.5% to 3.5% of any federal agency budget that 
     provides more than $100 million for research. As the 
     legislative process moves forward, we urge the adoption of 
     the House version of this legislation for the reasons 
     described below.
       We recognize the benefits of the participation of small 
     businesses in scientific research. Unfortunately, the Senate 
     has proposed a mandatory increase in the SBIR allocation 
     across agencies that will necessarily result in funding cuts 
     for the peer-reviewed research conducted by other 
     organizations. This fundamental research creates the 
     discoveries that fuel innovation, improve quality of life and 
     contribute to our country's economic growth. Indeed, the 
     increase in the SBIR allocation proposed in S. 1233 would 
     restrict competition for $1 billion in federal research 
     dollars, during a time when future funding levels are 
     uncertain. Rather than increasing support for one type of 
     research at

[[Page 17060]]

     the expense of all others, we urge Congress to work with the 
     Obama Administration to increase funding for all research, 
     thereby increasing the total investment in SBIR.
       We applaud your hard work on this complex issue, and stand 
     ready to work with you to pass the Enhancing Small Business 
     Research and Innovation Act of 2009 (H.R. 2965).
           Sincerely,
       Ad Hoc Group for Medical Research.
       American Association for Dental Research (IADR).
       American Association for the Advancement of Science (AAAS).
       American Association of Anatomists (AAA).
       American Association of Colleges of Nursing (AACN).
       American Association of Colleges of Osteopathic Medicine 
     (AACOM).
       American Association of Colleges of Pharmacy (AACP).
       American College of Radiology (ACR).
       American Educational Research Association (AERA).
       American Gastroenterological Association (AGA).
       American Liver Foundation (ALF).
       American Mathematical Society (AMS).
       American Psychological Association (APA).
       American Society for Biochemistry & Molecular Biology 
     (ASBMB).
       American Society for Investigative Pathology (ASIP).
       American Society for Nutrition (ASN).
       American Society for Pharmacology & Experimental 
     Therapeutics (ASPET).
       American Society of Nephrology (ASN).
       American Statistical Association (ASA).
       Arizona State University.
       Association for Psychological Science (APS).
       Association for Research in Vision and Ophthalmology 
     (ARVO).
       Association of American Medical Colleges (AAMC).
       Association of American Universities (AAU).
       Association of Independent Research Institutes (AIRI).
       Association of Population Centers (APC).
       Association of Public and Land-grant Universities 
     (A.P.L.U.).
       Association of Schools of Public Health (ASPH).
       Biophysical Society (BPS).
       Boston University School of Medicine.
       California Institute of Technology.
       Case Western Reserve University.
       Cedars-Sinai Medical Center.
       Coalition for the Advancement of Health Through Behavioral 
     and Social Sciences.
       Research (CAHT-BSSR).
       Coalition for the Life Sciences (CLS).
       Coalition to Protect Research (CPR).
       Columbia University.
       Computing Research Association (CRA).
       Consortium of Social Science Associations (COSSA).
       Consortium of Universities for the Advancement of 
     Hydrologic Science, Inc. (CUAHSI).
       Council of Energy Research and Education Leaders (CEREL).
       Council of Environmental Deans and Directors.
       Duke University.
       Energy Sciences Coalition (ESC).
       Environmental Mutagen Society (EMS).
       Federation of American Societies for Experimental Biology 
     (FASEB).
       Federation of Behavioral, Psychological, and Cognitive 
     Sciences (FBPCS).
       Harvard University.
       Indiana University.
       Institute for the Advancement of Social Work Research 
     (IASWR).
       Ktech Corporation.
       Michigan State University.
       National Alliance for Eye and Vision Research (NAEVR).
       National Alliance on Mental Illness (NAMI).
       National Caucus of Basic Biomedical Science Chairs 
     (NCBBSC).
       National Council for Science and the Environment (NCSE).
       National Health Council.
       National Multiple Sclerosis Society.
       New York-Presbyterian Hospital.
       North Carolina State University.
       NYU Langone Medical Center.
       Ornithological Council.
       Population Association of America (PAA).
       Rutgers, The State University of New Jersey.
       Small Business California.
       Society for Industrial and Applied Mathematics (SIAM).
       Society for Neuroscience (SfN).
       Society for Research in Child Development (SRCD).
       Society for the Study of Reproduction (SSR).
       Stanford University.
       SUNY Upstate Medical University.
       Syracuse University.
       The American Association of Immunologists (AAI).
       The American Brain Coalition (ABC).
       The American Physiological Society (APS).
       The American Society for Cell Biology (ASCB).
       The American Society of Human Genetics (ASHG).
       The Council on Undergraduate Research (CUR).
       The Endocrine Society.
       The Ohio State University.
       The Teratology Society.
       Tulane University.
       University of Cincinnati.
       University of Maryland.
       University of Maryland School of Medicine.
       University of Miami.
       University of Minnesota Medical School.
       University of Rochester.
       University of Southern California.
       University of Texas Health Science Center.
       University of Vermont.
       University of Virginia.
       University of Washington.
       University of Wisconsin-Madison.
       Vanderbilt University.
       Washington University in St. Louis.
       Weill Cornell Medical College.
       Yale University School of Medicine.
                                  ____

                                                    Association of


                                        American Universities,

                                     Washington, DC, July 6, 2009.
     Hon. Adrian Smith,
     Ranking Member, Subcommittee on Technology and Innovation, 
         House Science and Technology Committee, Rayburn House 
         Office Building, Washington, DC.
       Dear Representative Smith: On behalf of the Association of 
     American Universities, I write today to express support for 
     reauthorization of the Small Business Innovative Research 
     (SBIR) programs with the inclusion of two key provisions 
     contained only in the House version of the bill, H.R. 2965, 
     the Enhancing Small Business Research and Innovation Act of 
     2009. These provisions would maintain the current Small 
     Business and Innovative Research set-aside at 2.5 percent and 
     increase the ability of firms with significant amounts of 
     venture capital to participate in the SBIR program. AAU does 
     not support S. 1233, legislation recently marked up by the 
     Senate Committee on Small Business and Entrepreneurship, 
     specifically because of language it includes on these two 
     aspects of this critically important legislation.
       AAU is the association of 60 leading U.S. public and 
     private research universities whose member institutions 
     perform roughly 60 percent of federally funded university-
     based research, and award more than half of all Ph.D. degrees 
     earned in our country. We strongly prefer H.R. 2965, as 
     currently drafted, over its Senate counterpart, S. 1233, for 
     two reasons. First, the House bill does not propose to 
     increase the SBIR percentage set-aside. Like the House, we 
     believe that there is no clear justification for such 
     increases; especially as such increases would come at the 
     expense of peer-reviewed basic and applied research programs 
     at agencies such as NIH and NSF. In our view, increasing the 
     set-aside would reduce even further the number of successful 
     research grants that are awarded by federal research 
     agencies.
       This is not to suggest that we do not favor increasing the 
     amount of funds going to SBIR and STTR. Our view is that the 
     best way to increase the amount of funding available to these 
     programs is to provide steady and sustained funding increases 
     for federally supported research. Indeed, we hope to work 
     with the small business community to increase research 
     budgets across all of the major research agencies, which 
     would result in significant funding increases for the SBIR 
     and STTR, as well as other important research programs.
       AAU also supports a second provision of H.R. 2965 that 
     allows firms with significant venture capital funding to 
     compete for SBIR and STTR awards. As you know, current Small 
     Business Administration (SBA) regulations effectively 
     disqualify small companies that have received significant 
     venture capital investment or are owned by another company 
     with significant venture capital investment from competing 
     for SBIR and STIR funds. As then-NIH Director Elias Zerhouni 
     said in a 2005 letter to the SBA, ``this rule dries up 
     Federal funding for early stage ideas from small companies 
     that, by attracting substantial [venture capital] funding 
     show strong signs of likely success.'' AAU shares the view of 
     the NRC that venture capital investment in companies seeking 
     SBIR funding confirms the quality of those projects and would 
     raise the quality of the applicant pool overall.
       AAU strongly supports reauthorization of the SBIR and STTR 
     programs and hopes that Congress will approve legislation 
     similar to that approved by the House. We agree with the 
     National Academies' assessment of these programs as being 
     ``sound in concept and effective in practice.'' Both programs 
     play an important role in the nation's overall innovation 
     ecosystem by transforming cutting-edge, innovative ideas and 
     research into viable, market-ready products for the American 
     consumer. We strongly oppose legislation such as S. 1233, 
     which increases the percentage of R&D funding set-aside for 
     SBIR at the expense of other equally important research. We 
     also favor increasing the ability of firms with significant 
     amount of venture capital to participate in the SBIR program.
           With best regards,
                                                Robert M. Berdahl,
                                                        President.


[[Page 17061]]


  It is my hope that the House conferees will support SBIR and STTR 
growth through overall funding increases for our innovation agencies, 
instead of considering increasing the set-asides. In other words, the 
House today is taking the right action, precisely as they did last 
year.
  It is extremely important for us to stand together when dealing with 
the Senate conferees and insist on taking this approach. This is a much 
better approach to take, and I congratulate the House committee on 
dealing with it in this way.
  Mr. POLIS. Mr. Speaker, I reserve the balance of my time.
  Ms. FOXX. Mr. Speaker, we have had, I think, a very good debate on 
this rule. We have explained why the rule should not be approved.
  Very, very good amendments which were offered to this rule were not 
accepted. Amendments to the bill were not accepted, and we should be 
dealing with those amendments. We want to make sure that the money that 
is going to help small businesses in this country is being used as 
wisely as it can be. We know right now that the American people are 
hurting and continuing to lose jobs.
  The impact of the policies of this administration and the 
Democratically controlled Congress have been devastating, not only to 
large but also to small businesses. The Obama administration and 
congressional Democrats promised us earlier this year that their 
trillion-dollar stimulus would create jobs immediately and unemployment 
would not rise above 8 percent. In June alone, almost half a million 
jobs were lost, driving unemployment to 9.5 percent, it's highest level 
in almost 3 decades.
  It's clear that the Democrats' trillion-dollar stimulus bill isn't 
working.
  Every American has the right to ask where are the jobs that were 
promised by them. Every American has to ask on every piece of policy 
that we pass here, how is it going to impact jobs? How is it going to 
impact me as an American?
  Small businesses particularly have a concern about this. We have been 
spending hours and hours and hours doing things like honoring sports 
teams and athletes for their achievements. We have honored people 
retiring from their jobs, universities on various anniversaries and 
other items that are not critical to the operations of our government.
  We want to acknowledge the achievements of all of these people and 
all of these groups, but what we should be doing is spending time 
talking about what we need to be doing to bring back this economy.
  But the Democrats constantly say they have the schedule, they have to 
adhere to it, and as a result of it, they have to limit the amendments 
that can be offered on the floor to these important bills.
  Those are not very good excuses while the American people, I think, 
are hurting. They, again, have the right to ask where are the jobs that 
were promised, what is happening to this economy?
  The American people also know we cannot tax and spend and bail our 
way back to a growing economy. The Democrats in this body are on the 
side of more government and more taxes. Small businesses, not 
government, are the engine of our economy.
  House Republicans are on the side of the American people, and what we 
want to do is focus on small businesses to help put America back to 
work. We know that the health care bill that's going to come forward, 
we believe, later this week or next week, will have lots of tax 
increases in it that are going to finance their health, quote, reform 
proposal.
  However, what it's going to do is have a negative impact on small 
businesses. As I mentioned earlier, the cap-and-tax bill, which passed 
here 10 days ago, will eliminate between 1 million and 7 million jobs 
in this country if it is enacted.
  So while there is this small sop to small businesses and to the 
American people in the form of this bill, I am going to urge my 
colleagues to vote ``no'' on the rule for H.R. 2965, Enhancing Small 
Business Research and Innovation Act, because we can be doing better 
for the American people and particularly better for small businesses.
  Mr. Speaker, I yield back the balance of my time.
  Mr. POLIS. Mr. Speaker, if small businesses are the engine that 
drives our economy, then investment is the fuel. By ensuring that a 
portion of Federal research dollars are invested in small businesses, 
SBIR and STTR are fueling job creation and technological innovation. 
Since 1992, SBIR has issued 65,000 grants to small companies that are 
engaged in cutting-edge research to cure diseases, strengthen our 
national defense, and reduce our dependence on foreign energy sources.
  This Congress has been tasked with helping American families keep 
their jobs through the worst economic downturn since the Great 
Depression. We now have an unemployment rate of 9.5 percent. While 
there has been disagreement and spirited debate on the best 
prescription to get our economy moving again, we are fortunate that we 
have in place programs that are time tested. Every year the SBIR 
program invests $2.2 billion in small businesses, helping 1,500 new 
firms get off the ground.
  Mr. Speaker, I speak on behalf of Tech-X in Boulder; Coherent 
Technologies in Louisville; Community Power Corporation in Littleton; 
NavSys in Colorado Springs; and the many other small businesses which 
have benefited from the SBIR in my State of Colorado and across the 
country.
  Again, I commend the Members and staff who have worked diligently to 
bring this bipartisan bill to the floor.
  Mr. Speaker, as I said before and will continue to say, so much of 
our work thus far in Congress has moved us in the direction of creating 
more jobs. Whether it was passing the budget or work on health care, 
clean energy, education, the Recovery Act, the Green Schools bill, and 
even the Water Quality Investment Act created jobs. This bill is just 
another step on the road to recovery.
  I urge a ``yes'' vote on the previous question and on the rule.
  I yield back the balance of my time, and I move the previous question 
on the resolution.
  The previous question was ordered.
  The SPEAKER pro tempore. The question is on the resolution.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Ms. FOXX. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, this 15-
minute vote on adoption of House Resolution 610 will be followed by 5-
minute votes on motion to suspend the rules on H.R. 1275, if ordered, 
and motion to suspend the rules on H.R. 1945, if ordered.
  The vote was taken by electronic device, and there were--yeas 236, 
nays 187, not voting 9, as follows:

                             [Roll No. 480]

                               YEAS--236

     Abercrombie
     Ackerman
     Adler (NJ)
     Altmire
     Arcuri
     Baca
     Baird
     Baldwin
     Barrow
     Bean
     Becerra
     Berkley
     Berman
     Berry
     Bishop (GA)
     Bishop (NY)
     Blumenauer
     Boccieri
     Boren
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Braley (IA)
     Bright
     Brown, Corrine
     Butterfield
     Capps
     Capuano
     Carnahan
     Carney
     Carson (IN)
     Castor (FL)
     Chandler
     Childers
     Clarke
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly (VA)
     Conyers
     Cooper
     Costa
     Costello
     Crowley
     Cuellar
     Cummings
     Dahlkemper
     Davis (AL)
     Davis (CA)
     Davis (IL)
     Davis (TN)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Dicks
     Dingell
     Doggett
     Donnelly (IN)
     Doyle
     Driehaus
     Edwards (MD)
     Edwards (TX)
     Ellison
     Engel
     Eshoo
     Etheridge
     Farr
     Fattah
     Filner
     Frank (MA)
     Fudge
     Giffords
     Gonzalez
     Gordon (TN)
     Grayson
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hall (NY)
     Halvorson
     Hare
     Harman
     Hastings (FL)
     Herseth Sandlin
     Higgins
     Himes
     Hinchey
     Hinojosa
     Hirono
     Holden
     Holt
     Honda
     Hoyer
     Inslee
     Israel
     Jackson (IL)
     Jackson-Lee (TX)
     Johnson (GA)
     Johnson, E. B.
     Kagen
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick (MI)
     Kilroy
     Kind
     Kissell
     Kosmas
     Kratovil
     Kucinich
     Langevin
     Larsen (WA)
     Larson (CT)
     Lee (CA)

[[Page 17062]]


     Levin
     Lewis (GA)
     Lipinski
     Loebsack
     Lofgren, Zoe
     Lowey
     Lujan
     Lynch
     Maffei
     Maloney
     Markey (CO)
     Marshall
     Massa
     Matheson
     Matsui
     McCarthy (NY)
     McCollum
     McDermott
     McGovern
     McIntyre
     McMahon
     McNerney
     Meek (FL)
     Meeks (NY)
     Melancon
     Michaud
     Miller, George
     Minnick
     Mitchell
     Mollohan
     Moore (WI)
     Moran (VA)
     Murphy (CT)
     Murphy (NY)
     Murphy, Patrick
     Murtha
     Nadler (NY)
     Napolitano
     Neal (MA)
     Nye
     Oberstar
     Obey
     Olver
     Ortiz
     Pallone
     Pascrell
     Pastor (AZ)
     Payne
     Perlmutter
     Peters
     Peterson
     Pingree (ME)
     Polis (CO)
     Pomeroy
     Price (NC)
     Quigley
     Rahall
     Rangel
     Reyes
     Richardson
     Rodriguez
     Ross
     Rothman (NJ)
     Roybal-Allard
     Ruppersberger
     Rush
     Ryan (OH)
     Salazar
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schauer
     Schiff
     Schrader
     Schwartz
     Scott (GA)
     Scott (VA)
     Serrano
     Shea-Porter
     Sherman
     Sires
     Skelton
     Slaughter
     Smith (WA)
     Snyder
     Space
     Speier
     Spratt
     Stark
     Stupak
     Sutton
     Tanner
     Taylor
     Teague
     Thompson (CA)
     Thompson (MS)
     Tierney
     Titus
     Tonko
     Towns
     Van Hollen
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters
     Watson
     Watt
     Waxman
     Weiner
     Welch
     Wexler
     Wilson (OH)
     Woolsey
     Wu
     Yarmuth

                               NAYS--187

     Aderholt
     Akin
     Alexander
     Austria
     Bachmann
     Bachus
     Bartlett
     Barton (TX)
     Biggert
     Bilbray
     Bilirakis
     Bishop (UT)
     Blackburn
     Blunt
     Boehner
     Bonner
     Bono Mack
     Boozman
     Boustany
     Brady (TX)
     Brown (SC)
     Brown-Waite, Ginny
     Buchanan
     Burgess
     Burton (IN)
     Buyer
     Calvert
     Camp
     Campbell
     Cantor
     Cao
     Capito
     Carter
     Cassidy
     Castle
     Chaffetz
     Coble
     Coffman (CO)
     Cole
     Conaway
     Courtney
     Crenshaw
     Culberson
     Davis (KY)
     Deal (GA)
     Dent
     Diaz-Balart, L.
     Diaz-Balart, M.
     Dreier
     Duncan
     Ehlers
     Emerson
     Fallin
     Flake
     Fleming
     Forbes
     Fortenberry
     Foster
     Foxx
     Franks (AZ)
     Frelinghuysen
     Gallegly
     Garrett (NJ)
     Gerlach
     Gingrey (GA)
     Gohmert
     Goodlatte
     Granger
     Graves
     Guthrie
     Hall (TX)
     Harper
     Hastings (WA)
     Heinrich
     Heller
     Herger
     Hill
     Hodes
     Hoekstra
     Hunter
     Inglis
     Issa
     Jenkins
     Johnson (IL)
     Johnson, Sam
     Jones
     Jordan (OH)
     King (IA)
     King (NY)
     Kingston
     Kirk
     Kirkpatrick (AZ)
     Klein (FL)
     Kline (MN)
     Lamborn
     Lance
     Latham
     LaTourette
     Latta
     Lee (NY)
     Lewis (CA)
     Linder
     LoBiondo
     Lucas
     Luetkemeyer
     Lummis
     Lungren, Daniel E.
     Mack
     Manzullo
     Marchant
     Markey (MA)
     McCarthy (CA)
     McCaul
     McClintock
     McCotter
     McHenry
     McHugh
     McKeon
     McMorris Rodgers
     Mica
     Miller (FL)
     Miller (MI)
     Miller, Gary
     Moore (KS)
     Moran (KS)
     Murphy, Tim
     Myrick
     Neugebauer
     Nunes
     Olson
     Paul
     Paulsen
     Pence
     Perriello
     Petri
     Pitts
     Platts
     Poe (TX)
     Posey
     Price (GA)
     Putnam
     Radanovich
     Rehberg
     Reichert
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rogers (MI)
     Rohrabacher
     Rooney
     Ros-Lehtinen
     Roskam
     Royce
     Ryan (WI)
     Scalise
     Schmidt
     Schock
     Sensenbrenner
     Sessions
     Shadegg
     Shimkus
     Shuler
     Shuster
     Simpson
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Souder
     Stearns
     Sullivan
     Terry
     Thompson (PA)
     Thornberry
     Tiahrt
     Tiberi
     Tsongas
     Turner
     Upton
     Walden
     Wamp
     Westmoreland
     Whitfield
     Wilson (SC)
     Wittman
     Wolf
     Young (AK)
     Young (FL)

                             NOT VOTING--9

     Andrews
     Barrett (SC)
     Broun (GA)
     Cardoza
     Ellsworth
     Griffith
     Hensarling
     Miller (NC)
     Sestak

                              {time}  1209

  Messrs. SHUSTER, ROONEY, KLEIN of Florida and Mrs. BONO MACK changed 
their vote from ``yea'' to ``nay.''
  So the resolution was agreed to.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________