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Public Statements

Statements On Introduced Bills And Joint Resolutions

Floor Speech

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Location: Washington, DC

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

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By Mr. KERRY (for himself and Ms. Snowe):

S. 1657. A bill to establish a small business energy efficiency program, and for other purposes; to the Committee on Small Business and Entrepreneurship.

Mr. KERRY. Mr. President, in March of this year, I convened a hearing in the Committee on Small Business and Entrepreneurship to look at what small businesses can do to confront global warming. In February, the Intergovernmental Panel on Climate Change put forward a report that has been referred to as ``the smoking gun'' on global warming, written by more than 600 scientists, reviewed by another 600 experts, and edited by officials from 154 governments, the report provides indisputable evidence that the ice caps are melting, the sea level is rising, and the earth's surface is heating up at an alarming and potentially catastrophic rate.

Senator Snowe and I have worked together on a number of initiatives to combat global warming, including introducing the Global Warming Reduction Act of 2007, an effort to reduce greenhouse gas emissions by 65 percent by the year 2050. Today, we continue this partnership as chairman and ranking member of the Committee on Small Business and Entrepreneurship by introducing the Small Business Energy Efficiency Act of 2007.

There are nearly 26 million small businesses in this country, nearly 26 million business owners that are focused on keeping their doors open and putting food on the table for their families. And while climate change and national energy security sometimes seem like distant threats compared to rising health care costs and staying competitive in an increasingly global economy, small business owners are telling us that energy costs are indeed a concern. The National Small Business Association recently conducted a poll of its members, asking how energy prices affected their business decisions. Seventy-five percent said that energy prices had at least a moderate effect on their businesses, with roughly the same number saying that reducing energy costs would increase their profitability. Despite these numbers, only 33 percent have invested in energy efficient programs.

The Environmental Protection Agency estimates that small businesses consume roughly 30 percent of the commercial energy consumed in this country, that is roughly 2 trillion kBtu of energy per year, and it is costing small business concerns approximately $29 million a year. Through efforts to increase energy efficiency, small businesses can contribute to America's energy security, help to combat global warming, and add to their bottom line all at the same time.

The Small Business Energy Efficiency Act of 2007 seeks to assist small business owners in doing all of these things. First, the bill requires the Small Business Administration, SBA, to implement an energy efficiency program that was mandated in the 2005 Energy Policy Act. To date, the SBA has dragged its feet in implementing a program that could help small business owners to become more energy efficient. Administrator Preston should implement this important program today, and this bill directs him to do so.

Second, the bill establishes a program to increase energy efficiency through energy audits at Small Business Development Centers, SBDCs. The Pennsylvania SBDC currently operates a similar program, and has successfully assisted hundreds of businesses to become more energy efficient. As a result of the program, six of the eight winners of the 2006 ENERGY STAR Small Business Awards given by the EPA went to Pennsylvania businesses. This program should be replicated so that small businesses across the country have the same opportunity to cut energy costs through the efficiency measures.

In addition, this bill authorizes the Administrator to guarantee on-bill financing agreements between businesses and utility companies, to cover a utility company's risk in entering into such an agreement. The federal government should encourage utility companies to pursue these agreements with businesses, where an electric utility will cover the up-front costs of implementing energy efficiency measures, and a business will repay these costs through the savings realized in their energy bill.

This bill also encourages telecommuting through a pilot program at SBA. The Administrator is authorized to establish a program that produces educational materials and performs outreach to small businesses on the benefits of telecommuting.

Finally, the bill encourages increased innovation by providing a priority status within the SBIR and STTR programs that ensures high priority be given to small business concerns participating in energy efficiency or renewable energy system research and development projects.

As a Nation, we have much to do to secure our future energy supply and to solve the international crisis that is global warming. This bill represents one step in that process--to engage our small business owners in this effort, and to assist them in becoming more aware of what is possible. I urge my colleagues to support this bill, and I thank Senator Snowe for her work in this area.

I ask unanimous consent that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record

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By Mr. KERRY (for himself and Ms. SNOWE):

S. 1662. A bill to amend the Small Business Investment Act of 1958 to reauthorize the venture capital program, and for other purposes; to the Committee on Small Business and Entrepreneurship.

Mr. KERRY. Mr. President, today I am introducing legislation with my colleague, Senator Snowe, to increase access to venture capital for small businesses. This type of financing is essential to grow a company, but it's hard to come by, particularly for start-up firms. The Small Business Administration, SBA, has played an important role in filling this gap for almost 50 years with the Small Business Investment Company, SBIC, program.

Since the SBIC program's inception in 1958, SBIC firms have invested $48 billion in more than 100,000 small businesses. For fiscal year 2006 alone, 30 percent of all SBIC investment dollars went to companies that had been in business for two years or less. Overall in that year, SBIC financing supported more than 2,000 small businesses which employed a total of 286,000 Americans.

Many extremely successful companies that received their start from SBIC financing are now household names: Intel, Federal Express, Jenny Craig, and Outback Steakhouse are all SBIC success stories. Companies receiving SBIC financing have also consistently appeared on a variety of prominent business lists, including Inc. 500, BusinessWeek's ``Hot Growth Companies'' and ``Hot Growth Hall of Fame,'' Fortune magazine's ``Best Companies to Work For'' and ``Most Admired Companies,'' and the FSB 100. And they provide tens of thousands of jobs and contribute significantly to our Federal and local tax bases, paying back the investment many times over.

Given the important contribution SBIC funds have made to our economy, our bill reauthorizes the SBIC program for another 3 years, through 2010, ensuring the continued availability of this important small business financing tool. Additionally, the legislation simplifies the program's regulations to attract new investors and allow existing investors to increase their involvement. These provisions will ensure that dependable capital is available for small businesses for years to come.

Entrepreneurs may start out small, but the contribution they make to our economy is huge--and particularly important in underserved communities. This legislation will also increase the leverage cap for small businesses owned by women and minorities as well as those located in low-income areas. It will simplify existing incentives for investing in the smallest businesses in order to give every entrepreneur a fighting chance. Finally, we have included a provision which ensures that SBICs licensed under the participating securities program will be able to easily make follow-up investments in successful companies.

Small businesses are responsible for more than two-thirds of all new jobs in America. They employ more than half of the private sector work force, and pump over $900 billion into the economy annually. As small business owners are living the American dream, they should be able to count on the government to help create an environment where they can do what they do best: innovate, compete, and create good jobs for Americans.

I thank Senator Snowe for joining me in introducing this bill, and I ask my colleagues to support it when it comes before the full Senate for consideration. Mr. President, I ask that the text of the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record

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By Mr. KERRY (for himself and Ms. SNOWE):

S. 1663. A bill to amend the Small Business Investment Act of 1958 to reauthorize the New Markets Venture Capital Program, and for other purposes; to the Committee on Small Business and Entrepreneurship.

Mr. KERRY. Mr. President, in addition to introducing a bill to reauthorize the Small Business Investment Company, SBIC, program, Senator Snowe and I are introducing a bill to extend the New Markets Venture Capital, NMVC, program. The Securing Equity for the Economic Development of Low Income Areas Act of 2007, or the SEED Act, is important to states like Massachusetts and Maine.

Both of our States are home to pioneers in the field of development venture capital, which uses the discipline of traditional venture investing to focus on economic development in low-income areas. We know the benefits of this type of investment and believe the model should be expanded to other parts of the country.

Our support is not new. In my case, I was the sponsor of the Community Development and Venture Capital Act of 1999, which created the New Markets Venture Capital program. Its purpose was to stimulate economic development through public-private partnerships that invest venture capital in smaller businesses located in impoverished rural and urban areas or that employ low-income people.

Both innovative and fiscally sound, this program was built on two of the Small Business Administration's most popular programs. It developed a financial structure similar to that of the successful Small Business Investment Company, SBIC, program, mentioned earlier, while also incorporating a technical assistance component similar to that of SBA's microloan program.

However, unlike the SBIC program, which focuses on small businesses with high-growth potential, the New Markets Venture Capital program focuses on small businesses that show promise of both financial and social returns--what is referred to as a ``double bottom line.'' These businesses have special needs, and they tend to want intensive, ongoing financial, management and marketing assistance, be higher risk, and need longer periods to pay back money than SBIC investments. However, they more than balance out the equation by providing good, stable jobs and creating wealth in our neediest communities.

Unfortunately, the program expired in 2006, and it has been operating under temporary authority since then. The SEED Act seeks to reauthorize, expand, and improve this important program.

First, the bill will reauthorize the program for the next 3 years until 2010, making it possible for the SBA to license up to 20 more New Markets Venture Capital funds. Those funds will have the potential to invest $250 million in small businesses in low-income areas, by leveraging $150 million in debentures. Building on experiences with this program and the Rural Business Investment Company Program, which proved the matching requirement unreasonable and inefficient, the bill changes the operational assistance grants so that firms can get up to $1 million in funding in order to provide the companies they invest in with management assistance services. This support is absolutely necessary to make their business a success. Also important to making future funds successful, we have clarified that new markets venture capital companies have two years to raise their private capital. The committee has been troubled by the Agency's interpretation of the NMVC statute, which they viewed as giving SBA the authority to choose how much time it can give conditionally approved NMVCs to raise private-sector matching money. The chosen time frames were unreasonable and not what Congress intended. This bill clarifies that they get the full 2 years to raise the money. The bill also establishes an office of new markets venture capital so that there are resources devoted to its management and oversight, something lacking in past years. And to try to expand the reach of development capital in other parts of the country, the bill requires the SBA, to the extent practicable, to try and license funds in each of the Agency's ten regions, so that there is diversity. And it requires the SBA, to the extent practicable, to try and license a fund that focuses on investments in small manufacturers, as a way to help stem the loss of manufacturing in this country.

On behalf of the Nation's small businesses and entrepreneurs, I urge my colleagues to support this important legislation. Mr. President, I ask that the bill be printed in the Record.

There being no objection, the text of the bill was ordered to be printed in the Record


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