PETALUMA, CA -- 04/21/08 --
The following is a statement by the American
Small Business League:
Illinois small businesses could lose more than a billion dollars a year in
federal small business contracts and subcontracts if the House Committee on
Small Business has its way.
Last week, Nydia M. Velázquez (D - NY), the Chair of the House Committee on
Small Business, introduced H.R. 5819, the "SBIR/STTR Reauthorization Act."
This bill marks the second time in less than a year that House democrats
have introduced legislation that will amend the 55-year-old federal Small
Business Act to allow firms controlled by some of the nation's wealthiest
venture capital firms to receive government small business contracts.
Although the bill currently applies only to the SBIR program, it creates a
dangerous precedent for venture capital participation in other small
business programs.
In 2007, the House Committee on Small Business passed H.R. 3567, the "Small
Business Investment Expansion Act of 2007." Title V of H.R. 3567 also
included a provision that would have allowed businesses with up to 49.9
percent ownership by some of the nation's wealthiest venture capital firms
to receive government small business contracts. H.R. 3567 fizzled in the
Senate after receiving opposition from the American Small Business League
(ASBL), the Small Business Administration, the White House, the National
Small Business Association and the U.S. Chamber of Commerce.
If H.R. 5819 passes, a venture capital firm with billions of dollars in
managed assets would be allowed to own up to 49.9 percent of a business and
still qualify for government programs designed to assist small businesses.
The current definition of "independently owned" was designed to protect
small businesses. It prevents large businesses from using divisions or
subsidiaries to masquerade as small businesses in order to receive federal
small business contracts. H.R. 5819 removes that protection.
If the SBIR/STTR Reauthorization Act becomes law, Illinois' more than 1
million small businesses
(http://www.sba.gov/advo/research/profiles/07il.pdf) could find themselves
competing head-to-head with firms controlled by billionaire venture
capitalists for even the smallest government orders for goods and services.
The ASBL estimates that if H.R. 5819 passes, small businesses around the
country could lose as much as $50 to $100 billion a year in government
contracts.
During 2008, members of the House Committee on Small Business have been
targeted with a slew of campaign contributions from the National Venture
Capital Association (NVCA). According to Opensecrets.org, 13 members of
the committee have received contributions from NVCA this year alone.
Additionally, Rep. Velázquez has been the top committee recipient of funds
from NVCA during 2008.
Small business advocates expect legislators to vote on H.R. 5819 this
month. The ASBL (www.asbl.com) encourages concerned citizens and small
business owners to contact their congressional representatives and ask them
to oppose changing the definition of a small business in the Small Business
Act. Small businesses should remain "independently owned" and operated.
Contact:
Christopher Gunn
Communications Director
American Small Business League
Email Contact
(707) 789-9575
