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New Bill Could Divert Billions in Small Business Contracts to Corporate Giants

June 29, 2009

PETALUMA, Calif., - For the second time in the last year, the House of Representatives Small Business Committee has passed legislation that will change the definition of a small business to give some of the nation's wealthiest investors billions of dollars in federal small business contracts.

The bill, H.R. 2965, the Enhancing Small Business Research and Innovation Act of 2009, was introduced to reauthorize the Small Business Innovation Research (SBIR) program, which is set to expire on July 31st of this year. However, language in H.R. 2965 will change the definition of a small business from the current definition of "independently owned" to include businesses owned up to 49.9 percent by a single venture capital firm, or 100 percent owned and controlled by multiple venture capital firms or syndicates. (http://www.govtrack.us/congress/bill.xpd?bill=h111-2965)

H.R. 2965 is almost identical to similar legislation introduced last year to reauthorize the SBIR program, and again is being quarterbacked by House Small Business Committee Chair, Nydia Velazquez (D-NY). (http://www.allbusiness.com/company-activities-management/business-climate-conditions/9077284-1.html)

The legislation is being supported and pushed by groups like the Biotechnology Industry Organization (BIO) and the National Venture Capital Association (NVCA), but for the second time, not one single small business organization supports this legislation. Small business groups like the American Small Business League (ASBL) are outraged that the committee has again ignored the voice of small businesses and passed legislation that will divert billions of dollars from small businesses and the middle class economy. (http://www.youtube.com/watch?v=NZdI0Tw_n_Y)

Critics of Chairwoman Velazquez point to the fact that since 2003, a series of over a dozen federal investigations have shown that Fortune 500 and other clearly large firms are the actual recipients of billions of dollars in small business contracts, yet she has never introduced and pushed for legislation to address the ongoing abuses in small business contracting programs. (http://www.asbl.com/documentlibrary.html)

"H.R. 2965 is the most disgusting example of what is wrong with our government today," said ASBL President Lloyd Chapman. "Groups like the NVCA and BIO give large campaign contributions to members of Congress, like Velazquez, and now we see them being paid back with legislation that will give them billions of dollars in small business contracts. I have never seen a more blatant example of Congress selling legislation."



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Reid Brownlie
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American Small Business League
3910 Cypress Dr., Suite B
Petaluma, CA 94954

707-789-9575 | fax 707-789-9580
email to rbrownlie@asbl.com




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