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Today, the House Committee on Small Business approved a number of legislative initiatives designed to bolster small business growth, fuel the economy and spark innovation. If signed into law, the package would reform a range of federal programs affecting the small business sector. The bipartisan effort includes a number of bills and amendments written by Democratic Members of the Committee.

“This Committee has a long history of working across the aisle to find solutions for the problems facing our nation’s small businesses,” said Ranking Member Nydia M. Velázquez (D-NY). “The bills before us will make significant progress in helping tackle some of small businesses’ most daunting challenges, while strengthening a number of SBA initiatives.” 

In many instances, new start-ups and small firms lack the resources to compete with larger, more established corporations. This is particularly true when it comes to innovation and technology. To help put innovative small firms on the map, Congress created the Small Business Innovative Research Program (SBIR) and Small Business Technology Transfer (STTR) programs.

With the goal of promoting small firm engagement in innovation and commercialization, the SBIR program requires federal agencies with over $1 billion in research and development budgets to allocate part of that funding to grants for small businesses. 

“America’s entrepreneurs have always been vital to our technological growth and advancement,” said Velázquez. “In recent years, SBIR companies have been involved in everything from developing brain mapping technology to creating the world’s first molecular air purifier to developing drones used in our national defense.” 

To build and improve upon these programs, the Committee today passed the “Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017.” This legislation received bipartisan support and was largely the product of multiple hearings which centered on improving the programs. 

The final version of the SBIR legislation incorporates a bill authored by Congressman Dwight Evans (D-PA), which aims to improve diversity in the SBIR and STTR programs. According to a 2013 report, only six percent of SBIR funds went to small business owners from economically disadvantaged backgrounds. Evans’ bill requires participating agencies to use part of their SBIR funding to conduct outreach to minorities.  Additionally, the bill strives to bring participating agencies together by creating an annual summit. Together, these groups would have the chance to discuss their individual experiences and ways to improve the SBIR and STTR programs. 

“We must do everything we can to ensure access to capital and credit is a reality for all of our small business owners and entrepreneurs in order to ensure diversity and growth of our workforce,” said Evans. “We know that our small business owners and entrepreneurs are anchors in our neighborhoods which drive economic development and investment. I am proud to have set forth an amendment today that helps to ensure our small business community is reflective of the diversity in our neighborhoods and will provide women, millennials, and minorities with the tools and resources they need to continue to be the engines that drive people to live, stay and succeed in our neighborhoods.”

Committee Democrats successfully offered several other amendments to further strengthen the bill, including provisions written by: Reps. Al Lawson (D-FL); Stephanie Murphy (D-FL); Brad Schneider (D-IL); and Adriano Espaillat (D-NY). 

Mr. Lawson’s amendment focuses on supporting small businesses in later stages of the programs as they aim to bring their product to the market. By requiring SBIR programs to implement a Commercialization Assistance Pilot Program, Lawson and fellow Democrats hope to help small businesses transition from early product development phases to actually commercializing products. 

“This program is beneficial to not only small businesses, but also to the research facilities that support small business startups,” said Lawson. “I know that in my district in North Florida, our innovation hubs at Florida Agricultural and Mechanical University, Florida State University, and the University of North Florida will all benefit from the opportunity to utilize the SBIR program to help develop cutting edge technology that will see our country into the future. It is my hope that research institutions all across the country can do the same.”

Ms. Murphy’s amendment assists small businesses in commercializing their technology when obtaining government contracts. The measure would involve acquisition personnel in the SBIR and STTR program to help small businesses bring their products to the market.  Procurement Center Representatives, Offices of Small & Disadvantaged Business Utilization and Senior Procurement Executives in agencies would coordinate with appropriate agency procurement officials to help SBIR and STTR participating firms.

“This amendment will help small contractors move through the various stages of commercialization of their technology,” Murphy noted.  “The effect of the amendment will be to increase the number of knowledgeable procurement professionals who can assist small businesses to grow, create more jobs, and bring their innovative products to market.”

An amendment authored by Representative Schneider (D-IL) will allow for a more flexible use of SBIR and STTR program funding. This amendment also encourages commercialization by increasing the amount of funding that may be used for start-up related commercialization. 

“This bill makes it easier for innovative small businesses to access the resources they need to bring their research to market,” said Schneider. “When our small businesses develop and grow, it advances not just technological innovation, but also boosts our economy and creates jobs. I’m very pleased to introduce this bipartisan amendment targeted at helping dynamic start-ups succeed.”

An amendment proposed by Representative Espaillat mandates that agencies must submit regulatory requirements to the SBA in March of every year. Congressman Espaillat’s measure requires specifically that the Department of Defense submit their goals and incentives to Congress relating to the SBIR and STTR programs. This will help hold agencies accountable and ensure they are administering the program efficiently and effectively to benefit entrepreneurs. 

"I am proud to cosponsor an amendment that will strengthen the reporting requirement of SBIR/STTR recipients to ensure that the SBA is meeting its statutory responsibilities,” said Espaillat. “It is my hope that this amendment will help ensure minority and underrepresented individuals and small business owners will be properly afforded the ability to complete all three phases of review.”

H.R. 2056, the “Microloan Modernization Act of 2017”, was also approved by the Committee today. Authored by Murphy along with Velázquez and Rep. Seth Moulton (D-MA), the bill touches upon a number of improvements to the microloan program that have gained Congressional interest and debate in recent years.

The Small Business Administration’s (SBA) microloan program allows for a unique partnership between nonprofit community-based organizations and small businesses. This program has proven to be especially beneficial to women-and minority-owned startups looking for loans to finance their ventures. Such microloans are capped at $50,000 and average at around $13,000. 

The bill strengthens the microloan program by increasing the aggregate loan limit for pre-loan microloan intermediaries from $5 million to $6 million, and increases the cap on the use of technical assistance grants from 25 percent to 50 percent. Additionally, by mandating research reports, the bill helps guarantee access to data which can be used to further strengthen the program.  

“I’m proud of the bipartisan progress we are making together to help small businesses grow, including those in central Florida,” said Murphy. “My microloan bill will help more entrepreneurs and small businesses get the capital they need to start and grow their enterprises, especially women and minorities. I’ll keep working in a bipartisan way to support our small businesses, create jobs, and strengthen our economy for all.”

The Committee also approved today H.R. 2364, the “Investing in Main Street Act of 2017”, legislation authored by Congresswoman Judy Chu (D-CA). This bill increases the amount of capital that banks and savings associations can invest in a Small Business Investment Company (SBIC), from the current level of 5% to 15%. SBICs borrow resources from the SBA and raise private capital to invest in promising, job creating startups.  

“I’m so pleased that both Democrats and Republicans on our committee could come together today to help advance this important bill that will increase investment in our small businesses,” said Chu. “Small businesses are the backbone of our economy, but I know, from talking to entrepreneurs in my district and around the country, that one of the greatest challenges to success is access to capital. That is what this bill will address, by letting banks or federal savings associations invest up to 15% of their holdings into SBICs. I hope this bill is brought to the floor soon so that more entrepreneurs will be able to access the capital they need to grow their business and hire more workers.”

Legislation approved today also helped address problems stemming from change orders, a process in which federal agencies will require or request additional work from their contractors, sometimes resulting in delayed compensation owed from the original contract.  When small firms operating under a government contract are given a change order, they are directed to a change in the terms and conditions of their contact. As Committee members witnessed in a recent hearing on the topic, small firms often face difficulty securing payment and making ends meet after receiving a change order. 

The bill, H.R. 2594 the “Small Business Payment for Performance Act of 2017” addresses the concerns of many small businesses regarding change orders. This bipartisan legislation is designed to ensure timely payments for small firms.  Democrats sought greater transparency of the change order process by proposing an amendment to require the Administrator to collect and submit an annual Congressional report.  The amendment, which was authored by Ms. Adams, would take important steps toward addressing the change order issue by gathering comprehensive data on the scope of the problem. 

“Small businesses are the backbone of our economy yet they are often disadvantaged by government agencies’ practices,” said Congresswoman Adams. “I’m committed to ensuring continued opportunities for small business growth and diversity in government contracting; to that end, I proposed this amendment which allows Congress to gather information about the impact that repeated agency requests for project changes have on the small business contractors. As legislators, we must do our part to understand government practices that burden business owners and propose adjustments when needed.”

In sum, the legislation approved by the Committee today will help tackle a wide range of challenges holding back small business growth. 

“This is a strong package of bills– and a number of thoughtful amendments,” Velázquez concluded. “Taken together, these measures could make some very important strides in assisting the small business sector – and, in turn, helping to create good paying jobs.”

The Democratic bills and amendments were approved with strong bipartisan backing. The measures must now be considered on the floor of the U.S. House of Representatives. 

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