[House Report 110-603]
[From the U.S. Government Publishing Office]
110th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 110-603
======================================================================
PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 5819) TO AMEND THE SMALL
BUSINESS ACT TO IMPROVE THE SMALL BUSINESS INNOVATION RESEARCH (SBIR)
PROGRAM AND THE SMALL BUSINESS TECHNOLOGY TRANSFER (STTR) PROGRAM, AND
FOR OTHER PURPOSES
_______
April 22, 2008.--Referred to the House Calendar and ordered to be
printed
_______
Mr. Welch, from the Committee on Rules, submitted the following
R E P O R T
[To accompany H. Res. 1125]
The Committee on Rules, having had under consideration
House Resolution 1125, by a non-record vote, report the same to
the House with the recommendation that the resolution be
adopted.
SUMMARY OF PROVISIONS OF THE RESOLUTION
The resolution provides for consideration of H.R. 5819, the
SBIR/STTR Reauthorization Act, under a structured rule. The
rule provides one hour of general debate, with 40 minutes
equally divided and controlled by the chairman and ranking
minority member of the Committee on Small Business and 20
minutes equally divided and controlled by the chairman and
ranking minority member of the Committee on Science and
Technology. The rule waives all points of order against
consideration of the bill except clauses 9 and 10 of rule XXI.
The rule provides that the amendment in the nature of a
substitute recommended by the Committee on Small Business now
printed in the bill shall be considered as an original bill for
the purpose of amendment and shall be considered as read. The
rule waives all points of order against the amendment in the
nature of a substitute except for clause 10 of rule XXI. This
waiver does not affect the point of order available under
clause 9 of rule XXI (regarding earmark disclosure).
The rule makes in order only those amendments printed in
this report. The amendments made in order may be offered only
in the order printed in this report, may be offered only by a
Member designated in this report, shall be considered as read,
shall be debatable for the time specified in this 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 a division of the question in the House
or in the Committee of the Whole. All points of order against
the amendments except for clauses 9 and 10 of rule XXI are
waived. The rule provides one motion to recommit with or
without instructions. The rule provides that, notwithstanding
the operation of the previous question, the Chair may postpone
further consideration of the bill to a time designated by the
Speaker.
EXPLANATION OF WAIVERS
The waiver of all points of order against consideration of
the bill (except for clauses 9 and 10 of rule XXI) includes a
waiver of clause 3(e) of rule XIII requiring the inclusion of a
comparative print of any part of the bill or joint resolution
proposing to amend the statute and of the statute or part
thereof proposed to be amended, and a waiver of clause 3(d)(2)
of rule XIII requiring the inclusion of an estimate by the
committee of the costs that would be incurred in carrying out
the bill or joint resolution in the fiscal year in which it is
reported and in each of the five fiscal years following that
fiscal year. Although the rule waives of all points of order
against the committee amendment in the nature of a substitute
(except for clause 10 of rule XXI), the committee is not aware
of any points of order against the substitute. The waiver is
prophylactic.
SUMMARY OF AMENDMENTS MADE IN ORDER
(Summaries derived from information provided by sponsors.)
1. Boswell (IA)/Sutton (OH): The amendment would give
priority to applications from companies located in areas that
have lost a major source of employment. (10 minutes)
2. Ehlers (MI): The amendment strikes section 102--doing so
leaves the current set-asides for SBIR and STTR unchanged. (10
minutes)
3. Sestak (PA): The amendment notifies an applicant to the
SBIR and STTR programs, who is not successful in receiving an
award, that the applicant can request an explanation of why the
applicant did not receive the award. (10 minutes)
4. Matheson (UT): The amendment gives priority to small
businesses and organizations, in the awarding of SBIR, STTR,
and FAST grants, that are making significant contributions
towards energy efficiency, including those that are making
efforts to reduce their carbon footprint or are carbon neutral.
(10 minutes)
5. Giffords (AZ): The amendment would mandate that SBIR
awardees must be entities with their primary business
operations in the United States. (10 minutes)
6. Graves (MO): The amendment strikes and replaces Title
II, regarding venture capital investment standards. (10
minutes)
7. Matsui (CA): The amendment adds business incubators as
eligible for the partnerships with SBIR awardees that are
required by section 404. The amendment also defines the term
``business incubators'' for this purpose. (10 minutes)
8. Sutton (OH): The amendment provides that veterans will
be given priority when applying for SBIR and STTR awards. (10
minutes)
9. Sutton (OH): The amendment requires agencies that
administer SBIR programs to give special consideration to
pressing transportation and infrastructure research activities,
as identified by reports issued by the Department of
Transportation and National Academy of Sciences. (10 minutes)
10. Barrow (GA): The amendment establishes a pilot program
to make grants to minority institutions that partner with
nonprofit organizations that have experience developing
relationships between industry, minority institutions, and
other entities. (10 minutes)
11. Capito (WV): The amendment changes section 104,
regarding the SBIR Advisory Board. It would add to small
business concerns owned and controlled by service-disabled
veterans to the groups to be targeted by the board to make
applications for SBIR grants. (10 minutes)
12. Carney (PA): The amendment would allow the
Administrator of the SBA to view favorably FAST grant
applicants that use accredited SBDC's in determining the award
of a FAST grant. (10 minutes)
13. Gillibrand (NY): The amendment requires a veteran
small-business owner must be at least one of the people
appointed to the advisory board overseeing the Small Business
Innovation Research Program Grants. (10 minutes)
14. Walz (MN): The amendment would require the Small
Business Administration to consult with the Secretary of
Veterans Affairs to develop an outreach program to publicize
the Small Business Innovation Research program to veterans
returning from service and encourage veterans with appropriate
technical skills to apply for SBIR grants. (10 minutes)
15. Foster (IL)/Ellsworth (IN)/Altmire (PA): The amendment
requires SBIR awardees to be owned and controlled by at least
one individual, or a business concern owned and controlled by
individuals, who are a citizens of, or permanent resident
aliens in, the United States. Any applicant found knowingly
hiring, recruiting, or referring for a fee, an unauthorized
alien shall not be eligible for the receipt of future awards.
(10 minutes)
16. Welch (VT): The amendment strikes language that allows
firms not receiving SBIR/STTR Phase I grants to be eligible to
receive Phase II. (10 minutes)
17. Welch (VT): The amendment limits to half the amount of
an agency's SBIR budget that could go to grant awards that
exceed $200,000 for Phase I, and $1,500,000 for Phase II. (10
minutes)
TEXT OF AMENDMENTS MADE IN ORDER UNDER THE RULE
1. An Amendment To Be Offered by Representative Boswell of Iowa, or His
Designee, Debatable for 10 Minutes
In title V of the bill, add at the end the following (and
conform the table of contents accordingly):
SEC. 506. PRIORITY FOR AREAS THAT HAVE LOST A MAJOR SOURCE OF
EMPLOYMENT.
Section 9 of the Small Business Act (15 U.S.C. 638) is
amended by adding at the end the following:
``(ee) Priority for Areas That Have Lost a Major Source of
Employment.--In making awards under this section, Federal
agencies shall give priority to applications from companies
located in geographic areas that, as determined by the
Administrator, have lost a major source of employment. Not
later than 90 days after the date of the enactment of this
subsection, the Administrator shall promulgate rules for making
the determination required by this subsection.''.
----------
2. An Amendment To Be Offered by Representative Ehlers of Michigan, or
His Designee, Debatable for 10 Minutes
Page 3, line 10, through page 4, line 17, strike section 102,
and redesignate the subsequent sections accordingly.
----------
3. An Amendment To Be Offered By Representative Sestak of Pennsylvania,
of His Designee, Debatable for 10 Minutes
At the end of title I of the bill, insert the following:
SEC. 1___. PROVIDING EXPLANATIONS TO UNSUCCESSFUL APPLICANTS.
Section 9 of the Small Business Act (15 U.S.C. 638) is
amended by adding at the end the following:
``(dd) Providing Explanations to Unsuccessful Applicants.--
Whenever an entity applies for, but does not receive, an award
under an SBIR or STTR program under this section, the Federal
agency conducting the program shall--
``(1) in a plain and conspicuous manner, notify that
entity that it can request an explanation (which must
be of a constructive nature) of the reasons why the
entity did not receive the award; and
``(2) provide such an explanation to that entity, if
the entity so requests.''.
----------
4. An Amendment To Be Offered by Representative Matheson of Utah, or
His Designee, Debatable for 10 Minutes
At the end of title V of the bill, add the following (and
conform the table of contents accordingly):
SEC. __. PREFERENCE FOR ORGANIZATIONS THAT ARE MAKING SIGNIFICANT
CONTRIBUTIONS TOWARDS ENERGY EFFICIENCY.
Section 9 of the Small Business Act (15 U.S.C. 638) is
further amended by adding at the end the following:
``(ff) Preference for Organizations That Are Making
Significant Contributions Towards Energy Efficiency.--In making
awards under this section, Federal agencies shall give priority
to applications so as to increase the number of SBIR, STTR, and
FAST award recipients from organizations that are making
significant contributions towards energy efficiency, including
organizations that are making efforts to reduce their carbon
footprint or are carbon neutral.''.
----------
5. An Amendment To Be Offered by Representative Giffords of Arizona, or
Her Designee, Debatable for 10 Minutes
At the end of the bill, insert the following (and amend the
table of contents accordingly):
SEC. ___. SBIR AWARDEE BUSINESS OPERATIONS.
Section 9 of the Small Business Act is further amended by
adding at the end the following:
``(ee) SBIR Awardee Business Operations.--
``(1) In general.--To be eligible to receive an SBIR
award, an awardee must have its primary business
operations in the United States.
``(2) Definition.--In this subsection, the term
`United States' includes the District of Columbia, the
Commonwealth of Puerto Rico, and any other territory or
possession of the United States.''.
----------
6. An Amendment To Be Offered by Representative Graves of Missouri, or
His Designee, Debatable for 10 Minutes
Strike title II of the bill and insert the following:
TITLE II--VENTURE CAPITAL INVESTMENT STANDARDS
SEC. 201. ENSURING THAT INNOVATIVE SMALL BUSINESSES WITH SUBSTANTIAL
INVESTMENT FROM VENTURE CAPITAL OPERATING COMPANIES
ARE ABLE TO PARTICIPATE IN THE SBIR PROGRAM.
Section 9(e) of the Small Business Act (15 U.S.C. 638(e)) is
amended by striking ``and'' at the end of paragraph (8),
striking the period at the end of paragraph (9) and inserting
``; and'', and adding at the end the following:
``(10) effective only for the SBIR and STTR programs,
notwithstanding any other amendment made by the SBIR/
STTR Reauthorization Act, the following shall apply:
``(A) A business concern that has more than
500 employees shall not qualify as a small
business concern.
``(B) In determining whether a small business
concern is independently owned and operated
under section 3(a)(1) or meets the small
business size standards instituted under
section 3(a)(2), the Administrator shall not
consider a business concern to be affiliated
with a venture capital operating company (or
with any other business that the venture
capital operating company has financed) if--
``(i) the venture capital operating
company does not own 50 percent or more
of the business concern; and
``(ii) employees of the venture
capital operating company do not
constitute a majority of the board of
directors of the business concern.
``(C) A business concern shall be deemed to
be `independently owned and operated' if--
``(i) it is owned in majority part by
one or more natural persons or venture
capital operating companies;
``(ii) there is no single venture
capital operating company that owns 50
percent or more of the business
concern; and
``(iii) there is no single venture
capital operating company the employees
of which constitute a majority of the
board of directors of the business
concern.
``(D) If a venture capital operating company
controlled by a business with more than 500
employees (in this subparagraph referred to as
a `VCOC under large business control') has an
ownership interest in a small business concern
that is owned in majority part by venture
capital operating companies, the small business
concern is eligible to receive an award under
the SBIR or STTR program only if--
``(i) not more than two VCOCs under
large business control have an
ownership interest in the small
business concern;
``(ii) the VCOCs under large business
control do not collectively own more
than 20 percent of the small business
concern; and
``(iii) the VCOCs under large
business control do not collaborate
with each other to exercise more
control over the small business concern
than they could otherwise exercise
individually.
``(E) The term `venture capital operating
company' means a business concern--
``(i) that--
``(I) is a Venture Capital
Operating Company, as that term
is defined in regulations
promulgated by the Secretary of
Labor; or
``(II) is an entity that--
``(aa) is registered
under the Investment
Company Act of 1940 (15
U.S.C. 80a-51 et seq.);
or
``(bb) is an
investment company, as
defined in section
3(c)(14) of such Act
(15 U.S.C. 80a-
3(c)(14)), which is not
registered under such
Act because it is
beneficially owned by
less than 100 persons;
and
``(ii) that is itself organized or
incorporated and domiciled in the
United States, or is controlled by a
business concern that is incorporated
and domiciled in the United States.''.
----------
7. An Amendment To Be Offered by Representative Matsui of California,
or Her Designee, Debatable for 10 Minutes
Page 33, line 13, insert ``(A)'' before ``Each''.
Page 33, line 17, after ``venture capital investment
companies,'' insert ``business incubators,''.
Page 33, after line 24, insert the following:
``(B) Definition.--In this paragraph, the term
`business incubator' means an entity that provides
coordinated and specialized services to entrepreneurial
businesses which meet selected criteria during the
businesses' startup phases, including providing
services such as shared office space and office
services, access to equipment, access to
telecommunications and technology services, flexible
leases, specialized management assistance, access to
financing, mentoring and training services, or other
coordinated business or technical support services
designed to provide business development assistance to
entrepreneurial businesses during these businesses'
startup phases.''.
----------
8. An Amendment To Be Offered by Representative Sutton of Ohio, or Her
Designee, Debatable for 10 Minutes
At the end of title V of the bill, insert the following (and
conform the table of contents accordingly):
SEC. ___. VETERANS PREFERENCE.
Section 9 of the Small Business Act (15 U.S.C. 638) is
further amended by adding at the end the following:
``(ff) Veterans Preference.--In making awards under this
section, Federal agencies shall give priority to applications
from veterans, as defined in section 101(2) of title 38, United
States Code, so as to increase the number of SBIR and STTR
award recipients who are veterans.''.
----------
9. An Amendment To Be Offered by Representative Sutton of Ohio, or Her
Designee, Debatable for 10 Minutes
In section 107(3) of the bill, in the quoted matter, strike
``or'' at the end of subparagraph (D), and insert after
subparagraph (D) the following:
(E) the National Academy of Sciences, in the
final report issued by the `Transit Research
and Development: Federal Role in the National
Program' project and the `Transportation
Research, Development and Technology Strategic
Plan (2006-2010)' issued by the United States
Department of Transportation Research and
Innovative Technology Administration, and in
subsequent reports issued by the National
Academy of Sciences and United States
Department of Transportation on transportation
and infrastructure; or
In section 504(a) of the bill, in the quoted matter,
redesignate (E) as (F).
----------
10. An Amendment To Be Offered by Representative Barrow of Georgia, or
His Designee, Debatable for 10 Minutes
Page 36, after line 2, insert the following:
(D) Minority institution pilot program.--
(i) Establishment.--From amounts made
available to carry out this
subparagraph, the Administrator shall
establish and carry out a pilot program
to make grants to minority institutions
that partner with nonprofit
organizations that have experience
developing relationships between
industry, minority institutions, and
other entities, for the purpose of
increasing the number of SBIR and STTR
program applications by minority-owned
small businesses.
(ii) Application.--To be eligible to
receive a grant under the pilot program
established in clause (i), a minority
institution shall submit an application
to the Administrator at such time, in
such manner, and containing such
information and assurances as the
Administrator may require.
(iii) Matching requirement.--As a
condition of a grant under the pilot
program, the Administrator shall
require that a matching amount be
provided from a source other than the
Federal Government that is equal to the
amount of the grant.
(iv) Minority institution.--In this
subparagraph, the term ``minority
institution'' has the meaning given
that term in section 365(3) of the
Higher Education Act of 1965 (20 U.S.C.
1067k(3)).
(v) Funding.--For each of fiscal
years 2009 through 2012, of the amounts
appropriated pursuant to the
authorization of appropriations in
subparagraph (C), up to $4,000,000
shall be available to carry out this
subparagraph.
----------
11. An Amendment To Be Offered by Representative Capito of West
Virginia, or Her Designee, Debatable for 10 Minutes
Page 8, line 10, after ``minorities,'' insert the following:
``small business concerns owned and controlled by service-
disabled veterans,''.
----------
12. An Amendment To Be Offered by Representative Carney of
Pennsylvania, or His Designee, Debatable for 10 Minutes
Page 26, line 2, strike ``and'' at the end.
Page 26, line 5, strike the period at the end and insert ``;
and''.
Page 26, after line 5, insert the following:
``(D) criteria designed to give preference to
applicants who include an SBDC program that is
accredited for its technology services.''.
----------
13. An Amendment To Be Offered by Representative Gillibrand of New
York, or Her Designee, Debatable for 10 Minutes
Page 7, line 9, strike ``and''.
Page 7, after line 9, insert the following:
(C) at least one individual who is a veteran
who owns a small business concern owned and
controlled by veterans; and
Page 7, line 10, redesignate (C) as (D).
----------
14. An Amendment To Be Offered by Representative Walz of Minnesota, or
His Designee, Debatable for 10 Minutes
At the end of title V of the bill, add the following (and
conform the table of contents accordingly):
SEC. 506. INITIATIVE TO PUBLICIZE THE SBIR PROGRAM TO VETERANS.
The Administrator of the Small Business Administration, in
consultation with the Secretary of Veterans Affairs, shall
develop an initiative to publicize the SBIR program to veterans
returning from service and encourage those veterans with
applicable technical skills to apply for SBIR grants.
----------
15. An Amendment To Be Offered by Representative Foster of Illinois, or
His Designee, Debatable for 10 Minutes
At the end of the bill, add the following (and amend the
table of contents accordingly):
SEC. __. PROHIBITION OF AWARDS TO ALIENS UNLAWFULLY PRESENT IN THE
UNITED STATES.
Section 9 of the Small Business Act is amended by adding at
the end the following:
``(ee) Prohibition of Awards to Aliens Unlawfully Present in
the United States.--A concern is not eligible to receive an
award under this section if an individual who is an alien
unlawfully present in the United States--
``(1) has an ownership interest in that concern; or
``(2) has an ownership interest in another concern
that itself has an ownership interest in that
concern.''.
SEC. __. PROHIBITION ON AWARDS TO FIRMS IN VIOLATION OF IMMIGRATION
LAWS.
Any applicant found, based on a determination by the
Secretary of Homeland Security or the Attorney General to have
engaged in a pattern or practice of hiring, recruiting or
referring for a fee, for employment in the United States an
alien knowing the person is an unauthorized alien shall not be
eligible for the receipt of future awards under section 9 of
the Small Business Act.
----------
16. An Amendment To Be Offered by Representative Welch of Vermont, or
His Designee, Debatable for 10 Minutes
Page 16, strike line 16 and all that follows through page 17,
line 5.
----------
17. An Amendment To Be Offered by Representative Welch of Vermont, or
His Designee, Debatable for 10 Minutes
Page 6, after line 16, insert the following:
``(3) Additional limitation.--A Federal agency shall
not use more than one-half of its SBIR budget
established pursuant to subsection (f)(1) for the
purpose of funding the following awards:
``(A) Any award in the first phase of the
SBIR program that exceeds $200,000.
``(B) Any award in the second phase of the
SBIR program that exceeds $1,500,000.''.