Petaluma, Calif. – Congresswoman Nydia M. Velázquez (D - NY) is trying to push a bill through the House Committee on Small Business that could spell disaster for millions of small businesses across America. If this bill becomes law, small businesses will be forced to compete with firms controlled by the nation’s wealthiest venture capital firms. Legitimate small businesses could find themselves in head-to-head competition with billionaire venture capitalists for the more than $135 billion the federal government spends with small businesses every year.

 

The Small Business Innovation Research (SBIR) Program Re-authorization Act would amend the 55-year-old Small Business Act by changing the definition of a small business from “independently owned” to include companies owned up to 49.9 percent by venture capital firms.

 

This is the second time in the past 12 months that Representative Velázquez and the House Committee on Small Business has tried to pass legislation that could divert billions of dollars in government small business contracts to wealthy investors.

 

During 2007, the House of Representatives passed H.R 3567, which contained virtually identical legislative language to this new draft legislation. However, after the bill received opposition from the American Small Business League (ASBL), U.S. Small Business Administration, the White House, National Small Business Association and the U. S. Chamber of Commerce, H.R. 3567 fizzled in the Senate Committee on Small Business and Entrepreneurship.

 

Since 2006, Congresswoman Velázquez has appeared on CBS and CNN denouncing Bush Administration policy that allows Fortune 500 firms to receive federal contracts earmarked for small businesses. As chair of the House Committee on Small Business, Velázquez could have proposed legislation to stop the flow of government small business contracts to Fortune 500 firms. However, Velázquez has proposed no such legislation. Instead, she has proposed legislation that will make the situation even worse for small business owners by allowing multi-billion dollar venture capital firms to compete for federal small business contracts.

 

If the bill becomes law, it could force thousands of small businesses to close their doors and would pull billions of dollars away from the middle class economy.

 

Critics of the new bill view it as an attempt to reward wealthy venture capitalists that have been major supporters of the Democratic Party. The National Venture Capital Association has been among Congresswoman Velázquez's biggest campaign contributors.

 

The bill is expected to be fast tracked by House leaders to avoid scrutiny from small business advocates and media attention. 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. 

 

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