Small Business Contracting Fraud Prevention Act of 2011

Mr. President, I come to the floor today to discuss the importance of small businesses in the United States. It cannot be stated enough that small businesses are the economic engines of our country. Small businesses also represent the essence of the American Dream. They are creators of new jobs and innovative technologies. In fact, over the last 15 years, businesses employing less than 500 people have created 93 percent of all new jobs and employed 58.6 million workers. Businesses employing less than 20 people alone employed 21.3 million workers. In my home state of Louisiana, small businesses make up about 98 percent of businesses. As Chair of the Senate Committee on Small Business and Entrepreneurship, I remain focused on the needs of these small businesses. That is why I am here today to introduce a bill that I believe will help spur job creation among small businesses.

As you know, right now our country is still mired in an historic economic downturn. This economic downturn is disproportionately affecting small businesses and, in turn, stifling opportunities for them to generate economic growth for the country. Sadly, since November 2008 80 percent of the job losses have come from small businesses. 2.16 million jobs were lost in the private sector from July to February 2008--nearly half from businesses with less than 50 employees. While corporate layoffs get the headlines, small business layoffs increase the breadlines. Ten jobs lost here and five jobs there add up. These are the job losses that hurt our economy, our communities and our families.

With this in mind, I was proud to lead Congressional efforts to enact the Small Business Jobs Act of 2010, Public Law 111-240. President Obama signed this legislation into law on September 27, 2010. This legislation focused on the three ``C's'' important to small businesses: Capital, Contracting, and Counseling. 332 community banks in 47 states have received $4.01 billion in funding from the Small Business Lending Fund in the bill, which is $9.3 billion in leverage potential for small businesses. Furthermore, a total of 54 states/territories applied for funding through the Small Business State Credit Initiative Program to support State-run small business lending programs. Approximately, $1.3 billion for 47 states and territories has been approved. Lastly, $30 million of Round 1 of State Trade and Export, STEP, export grant funding was awarded in the Fall 2011 to 52 states and territories to promote small business exports. To date, the Small Business Jobs Act has provided an important boost to small businesses looking to get credit or open new markets overseas.

Given the importance of small businesses to our economy, I believe that there is no better time than now for Congress to build off the success of the Small Business Jobs Act. But the key question is how to best assist our country's 28 million small businesses? This is complicated because Federal law defines a small business as ``those having 500 employees or less.'' They may all fit under the same broad category of small business, but they are not all the same. So it makes no sense for the Federal government or Congress to have a ``one size fits all'' policy for helping them grow. We must put a special focus on maximizing strategies to help those small firms that have the capacity to grow in the near term.

The approach I have taken is to focus on the entrepreneurial ecosystems in our communities. This is because an ecosystem is defined as ``a system formed by the interaction of a community of organisms with their environment.'' I am particularly interested in the relationship between entrepreneurs, the current environment for entrepreneurship, and how we can make them more robust. In my view strengthening these ecosystems is an avenue to spur small business growth, create jobs, and grow our economy.

Babson College, one of the country's top colleges for undergraduate/ graduate entrepreneurship programs, has looked into what makes up an entrepreneurial ecosystem. Babson has identified the ``six domains'' of any entrepreneurial ecosystem: a conducive culture that rewards innovation, creativity and experimentation; enabling policies and leadership that provide regulatory and capital support; availability of appropriate finance, including micro-loans, private equity and public capital; quality human capital that include both skilled and unskilled workers from at home and abroad; venture-friendly markets for products by creating distribution channels and entrepreneurship networks; and a range of institutional and infrastructural supports, including incubation centers and legal and accounting advisers.

Building off this research and with feedback from other stakeholders, late last year my committee began preparations to conduct a series of roundtables on strengthening the entrepreneurial ecosystem for small businesses. The goal of these roundtables, which were conducted between February and April 2012, was to take the ideas that come out of these discussions and use them as the foundation for a major piece of legislation to support the entrepreneurial ecosystem. The first roundtable on February 1, 2012, was entitled ``Developing and Strengthening High-Growth Entrepreneurship.'' This roundtable set the stage for our discussions by exploring the recent success of high- growth firms in job creation and why it is so important that we replicate that success. The second roundtable was on March 22, 2012, and was entitled ``A Spotlight on Small Business Investment Companies and Their Role in the Entrepreneurship Ecosystem.'' That roundtable looked at how we could enhance an already successful program that gets capital into the hands of America's job creators. The last roundtable was on April 18, 2012, and was entitled ``Perspectives from the Entrepreneurial Ecosystem: Creating Jobs and Growing Businesses through Entrepreneurship.'' That roundtable discussed how different stakeholders in the entrepreneurial ecosystem are creating new entrepreneurs and growing businesses. It brought together key stakeholders from different levels of an entrepreneurial ecosystem: universities and entrepreneurship programs, Federal and local officials, investors, private sector accelerators, mentors, and successful entrepreneurs.

As a result of these three roundtables, my committee received almost 60 specific policy recommendations from the 41 participants. Some of these recommendations fell under the

jurisdictions of other Senate committees, while other proposals had a significant cost associated with them or lacked the strong bipartisan support necessary to move them forward in the Senate. After further consulting with my colleagues on the committee, I was able to identify our own six ``domains'' of proposals to focus our efforts on: Tax and Finance; Access to Capital; Access to Global Markets; Access to Mentoring, Education and Strategic Partnerships; Access to Government Contracting; and Transparency, Accountability, and Effectiveness. These domains form the six titles of the Success Ultimately Comes from Capital, Contracting, Education, Strategic Partnerships, and Smart Regulations, SUCCESS, Act of 2012.

First, Title I of the SUCCESS Act provides almost $12 billion in tax incentives to assist small businesses. All five tax provisions within the SUCCESS Act were based on parts of legislation, S. 2050, that was introduced in January by Senator Snowe and myself. S. 2050, the Small Business Tax Extenders Act, reflects the work of many of my Senate colleagues, including Senators Snowe, Kerry, Merkley, Cardin, Isakson, and Shaheen.

Section 102 of the SUCCESS Act extends the 100 percent exclusion from tax the gain on the sale of qualified small businesses, QSB, stock that non-corporate taxpayers purchase in 2012 and 2013 and hold for 5 years. Qualifying small business stock is stock of C-corporation whose gross assets do not exceed $50 million, including the proceeds received from the issuance of the stock, and who meets a specific active business requirement. The amount of gain eligible for the exclusion is limited to the greater of ten times the taxpayer's basis in the stock or $10 million of gain from stock in that corporation. Until 2009, non- corporate taxpayers were allowed to exclude 50 percent of the gain from the sale of stock of QSB if the taxpayers held the stock for 5 years. The Recovery Act of 2009 increased the 50 percent exclusion to 75 percent and the Small Business Jobs Act and subsequent legislation increased and extended the exclusion to 100 percent through 2011. However, as of January 1, 2012, the 100 percent exclusion has reverted to 50 percent and startup investments are no longer entitled to preferential capital gains treatment.

Senator Kerry, a senior member of my committee as well as the Finance Committee, has been a leader in the Senate in getting this provision extended in previous Congresses. I also note that this proposal has bipartisan and White House support. President Obama has repeatedly called on Congress to make permanent the 100 percent capital gains exclusion and included this proposal in his Startup America Legislative Agenda. Senators Moran, Warner, Coons and Rubio have all called for making this provision permanent and included a version of this provision in S. 3217, the Startup Act 2.0 that was introduced in May. According to a Kauffman Foundation paper published earlier this year, the 100 percent exclusion ``boosts the after-tax returns on such investments in startups and should induce substantial levels of new investments in startup firms.'' They further estimate that making this provision permanent would increase risky investments by conservatively 50 percent more than overall cost of the provision.

Section 103 of the bill extends the increased deduction for business start-up expenditures in 2012 and 2013 from $5,000 to $10,000, subject to a $60,000 threshold. Under current law, taxpayers can elect to deduct up to $5,000 of ``start-up expenditures'' in the taxable year in which they start a trade or business. The $5,000 is reduced--but not below zero--by the amount by which start-up costs exceed $50,000. Examples of startup costs include studies of potential markets, products, labor markets, or transportation systems; advertisements for the opening of a new business; compensation for consultants and employees undergoing training and their instructors; and travel for the purpose of securing suppliers, distributors, and customers.

The Small Business Jobs Act temporarily increased the amount of start-up expenditures entrepreneurs could deduct from their taxes in 2010 from $5,000 to $10,000, with a phase-out threshold of $60,000. We need to bring this provision back to aid our small businesses.

I note that there is also support within this chamber and from the White House for this proposal. As part of his Startup America Legislative Agenda, President Obama has called for making permanent the increased deduction for start-up expenditures. Senator Merkley successfully fought for the initial increase in deduction to be included in the Small Business Jobs Act. Over the past several years, this proposal has been repeatedly endorsed by the National Association for the Self-Employed and the National Federation of Independent Businesses, NFIB. Furthermore, according to a Kauffman Foundation survey, on average, new firms inject about $80,000 into their business during the first year of operation. The vast majority of small business owners--between 80 percent and 90 percent--also invest significant amounts of their own money into their businesses. These budding enterprises are also more dependent on personal capital at startup than after they become established businesses. Doubling the deduction for start-up costs puts cash in the hands of small businesses owners who need it most--those who are just getting started. According to estimates from Third Way, a non-partisan group, this proposal would help the more than 600,000 Americans who start their own business every year.

Under current law, when a corporation becomes an S-Corporation, it is required to hold its business assets for 10 years or pay punitive taxes. This 10- year holding period is too long and ties up assets that could be sold to raise capital. In 2010, Congress reduced this holding period to 5 years to better match business planning cycles. Section 104 of my bill will extend the 5-year holding period for 2012 and 2013, costing $251 million over 10 years. As with other provisions in the SUCCESS Act, this provision has bipartisan support. Senator Cardin has fought to make this proposal permanent. Senators Snowe, Vitter, and Roberts have also been long-time supporters and are co-sponsors of legislation introduced by Senator Cardin to make this provision permanent. By granting this extension, we will give the more than 4 million S-Corporations in the U.S. the flexibility they need to raise capital.

Section 105 would allow sole proprietorships, partnerships and non- publicly traded corporations with less than $50M in average gross annual receipts for the prior 3 years, to carryback unused general business credits earned in 2012 and 2013 for 5 previous years. Under current law, if a business has no tax liability in its current tax year, it may carry the general business tax credit back to the previous tax year to offset taxes paid in the previous year and obtain a refund. If the current credit exceeds taxes paid in the previous year, the remaining credit may be carried forward for 20 years, without interest, and used to offset tax liability in future years. The general business credit is limited to the difference between the regular tax liability of a business and the greater of its tentative minimum tax or 25 percent of regular tax liability in excess of $25,000. The general business tax credit is comprised of several different tax credits including the R&D tax credit, energy credits, the Low-Income Housing Tax Credit and the Work Opportunity Tax Credit.

This extension would provide tax refunds to businesses that were previously healthy but are currently running losses. It would improve the effectiveness of business credits that are intended to expand investment and employment, in the case of the Work Opportunity Tax Credit. It would also allow businesses greater immediate benefit from credits designed to encourage specific types of economic activity, such as hiring disadvantaged workers or investments in renewable energy. By providing businesses with greater opportunity to claim business credits, the provisions would also give an infusion of cash to businesses, which might promote investment. This could be particularly important if businesses have trouble borrowing because of financial market problems.

Section 106 of the SUCCESS Act extends a generous Section 179 provision that allows small businesses to immediately write-off up to $500,000, up from $250,000, for tangible personal property

and up to $250,000 for improvements to leasehold property and retail property.

Under the Small Business Jobs Act and other subsequent legislation, for taxable years beginning in 2010 and 2011, small businesses could write-off for capital expenditures for ``qualifying Sec. 179 property'' up to $500,000 and the phase-out threshold has been increased to $2,000,000. These thresholds were up from prior law thresholds of $25,000/$200,000. In addition, for the first time, the Small Business Jobs Act allowed taxpayers to expense $250,000 of the cost of improvements to real property including qualified restaurant property and qualified retail property. To qualify for the section 179 deduction, property must have been acquired for use in the trade or business. Examples of qualifying property include machinery and equipment; property contained in or attached to a building, other than structural components, such as refrigerators, grocery store counters, office equipment, printing presses, testing equipment, and signs.; gasoline storage tanks and pumps at retail service stations.; livestock, including horses, cattle, hogs, sheep, goats, and mink and other furbearing animals.

Extending the enhanced Section 179 deduction has bipartisan Senate support, White House support, and industry support. The President supports extending Section 179. My colleague Senator Snowe is a strong supporter of the enhanced Section 179 provision that allows businesses to expense improvements to restaurant and retail property. She developed this particular proposal in connection with her work on the Small Business Jobs Act. Finally, 26 National business groups such as the NFIB, the U.S. Chamber of Commerce, the National Association of Homebuilders, and the National Association of the Self-Employed endorsed extending Section 179 and including expensing for real property improvements in a May 21, 2012 letter to Congress.

The next title of the SUCCESS Act focuses on improving access to capital for small businesses. In particular, Subtitle A under Title II was previously introduced as S. 3253, the Expanding Access to Capital for Entrepreneurial Leaders, EXCEL, Act. It provides necessary and timely enhancements to the Small Business Investment Company, SBIC, program. SBICs are government backed and regulated private equity funds which invest in U.S. small businesses. The SBIC program was created in 1958 by then Senator Lyndon Johnson and Senator William Fulbright, and signed into law by President Eisenhower. During a Senate hearing on the creation of the program, Senator Joseph Clark said the legislation is ``necessary to increase the availability of long-term credit and equity capital for small businesses.''

Since 1958, SBICs have invested $56 billion in over 100,000 small businesses. The core debenture program operates at no cost to taxpayers. SBIC success stories include: Apple Computer, Callaway Golf, Costco, Outback Steakhouse, Jenny Craig, Annie's food company, and Center Rock of Berlin, PA, the manufacturers of the drill bit that saved the Chilean miners in October 2010.

The SBIC program has seen strong growth in the past few years. For example, the program grew 50 percent in fiscal year 2011 alone. However, the authorization level has not been permanently raised since 2003. To continue fulfilling the intent of the original legislation, it is time to make some improvements. The Landrieu-Snowe EXCEL Act has two main components. First, it raises the statutory cap for the SBIC Program from $3 billion to $4 billion. Second, it increases the amount of leverage by SBIC licensees under common control from $225 million to $350 million ``Family of Funds''. The components of this provision were also included in the President's Startup America legislative package.

Subtitle B of Title II was originally introduced as S. 2364 by Senators Snowe, Landrieu, Isakson and Shaheen. The 504 loan program is a long-term financing tool for economic development that provides small businesses with long-term, fixed-rate loans to help them acquire major fixed assets and real estate for expansion or modernization. The Small Business Jobs Act allowed small businesses to use the 504 loan program to refinance certain qualifying existing debt for two years, but the SBA did not promulgate regulations to implement the refinancing provision until February 17, 2012.

This subtitle would extend for a year and a half a provision allowing small business owners to use Small Business Administration, SBA, 504 loans to refinance existing commercial mortgages. Extending the 504 refinancing program is a common-sense way to help small businesses and create jobs. By allowing small businesses to refinance qualified commercial real estate debt, this program lowers their monthly mortgage payments at no cost to taxpayers. That's right, this provision has zero subsidy cost. At a time when we are still facing high unemployment, this extension is one of many things that we should be doing to put more capital in the hands of America's job creators.

Subtitle C of Title II is a new proposal introduced for the first time as part of the SUCCESS Act. SBA currently releases some information publicly about SBA lending activity, but it is almost impossible to find and comprehend if you are not an SBA lending professional. If a small business, mayor, or governor wants to determine SBA lending activity in their area, they lack the ability to do so easily.

This subtitle would require the SBA to post a user friendly Lender Activity Index on the SBA website. Users will immediately be able to access the following data for any given bank: name of bank, number of SBA loans each bank made, total dollar amount of SBA loans of each bank, zip code of bank activity, not where every single loan was made, but a list of every zip code where the bank has made an SBA loan, industries lent to, hospitality, manufacturing, service, software, etc., stage of business cycle, new, or existing business, and business specific information, i.e. Women Owned Businesses, Minority Owned Businesses, or Veteran Owned Businesses. Data will be available for the year to date and users will be able to compare to 3 previous fiscal years. Both quarterly and annual data will be included.

Title III of the SUCCESS Act focuses on promoting exports from small businesses. The Small Business Jobs Act made major changes to the international trade work done by the SBA. Now that those provisions have been in place for several years, there are additional refinements and direction needed. I would like to specifically thank Senators Shaheen and Ayotte for their bipartisan export contributions to this effort. The export provisions of Tile III are taken from S. 3218, their Small Business Growth Act of 2012, as well as S. 3277, the Go Global Act of 2012 that Senator Shaheen and I authored this year.

95 percent of the world's customers are located outside of the borders of the United States, and in the last twelve months we have exported more than $2 trillion of goods and services to these consumers. Yet only 1 percent of our approximately 28 million small businesses export. Our agencies need to be working together to ensure our small businesses have the resources they need to expand their customer base and be part of the more than $180 billion in exports that the United States sends around the world each month.

This title aids our small business exporters by addressing federal government coordination, resources for rural businesses, and export control education. It establishes, in Section 306, an interagency task force of SBA, the Department of Agriculture (USDA), the Export-Import Bank, and the Overseas Private Investment Corporation on export financing to review, improve, and increase collaboration on current finance programs. Then, to further coordination, Section 307(a) begins a cross training program with SBA and USDA to inform their respective export finance specialists more about each other's programs. Our small businesses face enough challenges--we should be bringing our resources to them. In Section 304, this bill requires SBA, in coordination with other agencies, to do at least one export outreach event per year in each state. Section 307(b) also aids our rural small businesses by posting a list of rural lenders who participate in SBA and USDA loan programs and a list of rural small businesses counseling and technical assistance resources. Jobs created by exports pay, on average, 15 to 20 percent more than jobs created by goods and services sold

in the United States. This bill will continue to support entrepreneurs who want to create and grow these employment opportunities for all Americans.

Title IV of the bill focuses on promoting small business access to mentoring, education and strategic partnerships. Subtitle A of this title was originally introduced by Senator Snowe and I as S. 3198, the Strengthening Resources for America's Entrepreneurs Act of 2012. The SBA Office of Entrepreneurial Development, OED, oversees a network of programs and services that support the training and counseling needs of small business. According to the SBA, OED helps hundreds of thousands of small business clients start, grow and compete in global markets by providing quality training, counseling and access to resources. SBA delivers these services through non-profit, college and university, and community-based organization resource partners. Through its network of over 1,000 resource partners across the country, OED programs include Small Business Development Centers, SBDCs, Women's Business Centers, SCORE, and Entrepreneurship Education. However, it is currently difficult to track effectiveness and ensure our resources are being used in the best ways possible. To solve this challenge, this subtitle has four primary components. First, it requires the SBA to coordinate and make consistent data collection and outcome metrics for Entrepreneurial Development programs. Second, it increases planning for utilizing Entrepreneurial Development programs to create jobs. Third, it increases coordination between Entrepreneurial Development programs and Resource Partners at the national level. Finally, it increases accountability measures and reports to Congress regarding the effectiveness of Entrepreneurial Development programs.

Subtitle B of the bill comes from S. 3197, the Women's Small Business Ownership Act which was sponsored by Senator Snowe and myself. This subtitle is focused on the SBA Women's Business Center (WBC) program. The WBC program was established in 1988 and implemented through the SBA's Office of Women's Business Ownership. It provides quality counseling and training services to all entrepreneurs, primarily women, especially those who are socially and economically disadvantaged. Through a network of over 100 non-profit organizations, WBCs help more than 150,000 clients annually to start and grow small firms in the local area in which they serve and to stimulate economic growth. Subtitle B reauthorizes the WBC program through Fiscal Year 2015 and makes improvements to the program, including a Government Accountability Office review of Women's Business Center program performance as compared with other SBA Entrepreneurial Development programs.

Subtitle C of the SUCCESS Act is Senator Snowe's Strengthening America's Small Business Development Centers Act. Small Business Development Centers (SBDCs) are considered to be the backbone of the SBA's Office of Entrepreneurial Development efforts, and are the largest of the agency's OED programs. SBDCs are the university based resource partners that provide counseling and training needs for more than 600,000 business clients annually. From 2007 to 2008, the counseling and technical assistance services they offered lead to the creation of 58,501 new jobs, at a cost of $3,462 per job. Additionally, they estimate that their counseling services helped to save 88,889 jobs. This subtitle would reauthorize SBDC program at the current $135 million authorization level through fiscal year 15. Beyond reauthorizing the SBDC program, this provision also encourages SBDCs to improve outreach and communications to universities, community colleges, and junior colleges and allows the SBA Administrator to authorize out-of-state SBDCs to provide assistance in declared disaster areas.

Subtitle D of Title IV was originally introduced as S. 3281 by Senators Snowe, Kerry, and Coburn. This subtitle repeals Federal authorization of the National Veterans Business Development Corporation, TVC, eliminating an ineffective government program. The National Veterans Business Development Corporation, also known as The Veterans Corporation or simply TVC, has been ineffective and controversial since its inception as part of the Veterans Entrepreneurship and Small Business Development Act, P.L. 106-50, in 1999. In December of 2008, former Small Business Committee Chairman Kerry and Ranking Member Snowe investigated TVC, and issued a report detailing the organization's blatant mismanagement and wasting of taxpayers' dollars. Since the issuing of the Small Business Committee's report, Congress has appropriated no further funding for TVC, and the Small Business Administration has incorporated the Veteran Business Resource Centers, VBRCs, that TVC previously funded into its existing network of Veteran Business Outreach Centers, VBOCs. At present, TVC still exists as an organization, and it is still technically federally chartered. At the same time, it receives no Federal funds, has no Department or Agency oversight. It is time for it to be eliminated.

Title V of the SUCCESS Act focuses on promoting Federal government contracting opportunities for small businesses. Section 511 under Subtitle A of Title V was originally introduced by Senators Cardin, Landrieu and Snowe as S. 2187, the Small Business Administration Surety Bond Increase Act. The SBA administers a surety bond guarantee program, designed to encourage sureties to issue bonds when they would otherwise determine that a small business presents an unacceptable degree of risk. Under the program, SBA may guarantee bid, performance, and payment bonds for individual contracts of $2 million or less for small businesses that cannot obtain surety bonds through regular commercial channels. In the American Recovery & Reinvestment Act of 2009, Senator Cardin was able to temporarily increase the size of SBA surety bond guarantee from $2 million to $5 million. Section 511 would make that permanent. It would ensure that small businesses have the means to the secure the necessary surety bonding to compete for contracts during the economic downturn.

Subtitle B of Title V was originally introduced by Senators Snowe, Landrieu, Enzi, Brown, Merkley, Cantwell and eight other senators as S. 633, the Small Business Contracting Fraud Prevention Act. Fraud in small business contracting programs has starkly increased over the years. Recently we have all read about instances where large businesses misrepresent their size and status to receive the benefits of SBA programs designed for small businesses. Firms that engage in this activity have long been subject to civil and/or criminal penalties under various laws and government-wide policies.

The provisions in Subtitle B provide the SBA Inspector General with enhanced tools to eliminate fraud in small business contracting programs by: imposing greater penalties for fraud; requiring that firms be debarred for five years if they misrepresent their status as veteran-owned for purposes of programs under the act; and requiring the SBA to submit annual reports to Congress on the number of persons debarred or suspended from government contracting, or considered for debarment or suspension from government contracting, for violations of the bill. This will deter fraud in government small business contracting and will keep Congress in the loop on small business fraud issues.

Subtitle C under Title V was originally introduced by Senators Snowe, Landrieu, Gillibrand and seven other senators as S. 2172, the Fairness in Women-Owned Small Business Contracting Act. Currently, the Women- Owned Small Business, WOSB, contracting program caps contract awards to woman-owned businesses at $4 million for goods/services and $6.5 million for manufacturing. In addition, sole-source contract awards under the program are prohibited. In other words, this program has limits that no other contracting program has.

The provisions in Subtitle C would remove the contract award price limits for women-owned small businesses, create a provision allowing sole-source contract awards to WOSBs, direct the SBA to periodically conduct a study to identify any U.S. industry in which women are underrepresented, and every five years report the study results to Congress. From these improvements, more contracting opportunities will emerge for women-owned businesses in the Federal marketplace.

Subtitle D of the Title V of the SUCCESS originated with our colleagues in the House of Representatives as H.R. 3851, the Small Business Champion Act. The Small Business Act established an Office of Small and Disadvantaged Business, OSDBU, within all major Federal Executive Agencies. The OSDBU is the primary advocate within each Agency responsible for promoting the maximum use of all small business programs within the Federal contracting process. The OSDBU is tasked with ensuring that each Federal agency and their large prime vendors comply with federal laws, regulations, and policies to include small businesses as sources for goods and services, both as prime contractors and subcontractors. Approximately 35 Federal Agencies have fully functioning OSDBU offices.

In an effort to assist agencies with meeting contracting goals, Subtitle D makes three major modifications to OSDBU offices. First, it elevates the OSDBU Director at each agency to the Senior Executive Service, SES, rank. Second, it prohibits combining the duties of the OSDBU Director with unrelated duties. Finally, it requires that agencies consult with the OSDBU office on decisions to insource work performed by small businesses. I would note that the House of Representatives Committee on Small Business approved H.R. 3851 by voice vote on March 7, 2012.

The final title of the SUCCESS Act is focused on improving Federal Government transparency, accountability, and effectiveness. A key component of this title is a result of the work of my colleague Senator Hagan from North Carolina. In particular, Subtitle A of Title VI is based upon Senator Hagan's legislation, S. 3194, the Small Business Common Application Act of 2012.

Whether it is applying for a grant, seeking technical assistance, or bidding on a contract, small businesses face a dizzying array of paperwork when interacting with the Federal government. As a result, many small businesses avoid Federal programs altogether, missing out on potentially lucrative business opportunities. Senator Hagan's bill aims to streamline assistance for small businesses facing layers of paperwork when they apply for a grant, seek technical assistance or bid on a contract from the Federal government.

Furthermore, according to a 2010 study from the SBA Office of Advocacy, it costs small businesses with 20 employees or less more than $10,500 per employee to comply with Federal regulations. When compared to their larger counterparts, it costs small firms over $2,800--or approximately 36 percent more--for each employee.

Subtitle A builds off provisions in S. 3194 by establishing an Executive Committee of 12 Federal agency representatives, headed by the SBA Administrator, to review the feasibility of establishing a Small Business Common Application. This Executive Committee would then provide recommendations to the Executive Branch and Congress within 270 days on establishing a common application and web portal for small businesses.

The small business ``common app'' would function much like the one that students complete to apply to multiple colleges and universities simultaneously. It would ensure that small businesses across the country can concentrate on growing and creating jobs--not wasting time, filling out mountains of repetitive paperwork.

Lastly, I recognize that it is important to provide sufficient oversight of the programs and assistance authorized in this bill. Subtitle B of Title VI would authorize a GAO review of the bill-- including whether programs receive necessary funding, have been successfully implemented, and are promoting job creation among small businesses. This report would go to the House and Senate Small Business Committees not later than 2 years after the date of enactment.

In closing, I would like to reiterate that the SUCCESS Act is a combination of numerous bipartisan bills that have been introduced this Congress. So these proposals are neither new nor untested--they are ready for prime time. On July 12, 2012 the Senate voted on the SUCCESS Act as part of Senate Amendment 2521 to S. 2237, the Small Business Jobs and Tax Relief Act of 2012. Although the amendment came up short of the 60 votes needed to end debate, Senate Amendment 2521 did receive a strong 57 bipartisan votes. My Republican colleagues Senators Snowe, Collins, Vitter, Scott Brown, and Heller all voted in support of the amendment. I thank them for joining with us to try to move this legislation forward in the Senate. It is my understanding that some of my Republican colleagues may have voted for the amendment if it did not contain the underlying provisions from S. 2237. Procedurally, it was necessary to include these provisions to ensure a vote on the SUCCESS Act. However, recognizing these concerns, our bill that is being introduced today only includes Subtitle B of Senate Amendment 2521--the bipartisan SUCCESS Act provisions. I hope that additional colleagues from both sides of the aisle will now support the SUCCESS Act, especially as we are only a few votes short of being able to move it forward here in the Senate.

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

Mr. President, I rise today to introduce legislation that really has been 97 years in the making, legislation to authorize the land conveyances needed to permit the Alaska Railroad to be extended another 80 miles southeastward.

On March 12, 1914, Congress originally approved the Alaska Railroad Organic Act that authorized the construction of up to 1,000 miles of mainline track in Alaska, an effort to tie coastal Alaska with the Interior of my State. During the past century 470 miles of mainline track has been built tying Seward, Whittier and Anchorage located on either Prince William Sound or Cook Inlet with Fairbanks and Eielson Air Force base that is located just south of Fairbanks in the Interior of Alaska. Since 1923 when the current mainline track was finished being installed, there has been a dream by many to extend the railroad further, perhaps all the way to the Canadian border 270 miles away so the railroad could eventually be tied into North America's trans- continental rail network.

Today, joined by my colleague, Senator Mark Begich of Alaska, I introduce legislation to only authorize the land conveyances from the Federal Government to permit the railroad to reach Delta Junction, Alaska.

The reasons for the extension are many.

One reason is that the Department of Defense has large military training areas south of the Tanana River between Fairbanks and Delta Junction--some of the best areas for joint Army and Air Force training in the nation. Access to the Joint Pacific Area Range Complex, JPARC, is currently limited to ice roads in winter, but a railroad extension would permit vehicles to travel by low-cost rail to a staging area for joint military exercises that could be built immediately south of the river, reducing the time and cost of military exercises and permitting year-round training to occur more readily.

Delta Junction, the home of Ft. Greely, is also the site of an anti- missile defense installation that could also benefit from access to rail transportation.

Rail service to the area also would permit existing agricultural, mining and petrochemical industries to obtain supplies, reducing wear and tear on the Richardson Highway, currently the only means of access to the region. It would improve the economics for several mining deposits located along the 80-mile rail extension right of way, and should the railroad ever be extended further toward the border, it would open more than a dozen other known mineralized areas to potential economic development. A railroad would provide safer all-weather transportation than highways given Alaska's severe winter weather driving conditions.

Planning for such a rail extension has been underway for a number of years. In January 2010 the Surface Transportation Board approved the Environmental Impact Statement for the

rail extension. That means that a route already has been identified. This means that the estimate that this extension will require only roughly 950 acres of land to be purchased/conveyed to the railroad is a firm requirement based on an approved rail route and corridor.

The bill I introduce requires the railroad to pay the full appraised value for the land--an appraisal performed by an appraiser mutually acceptable to the Secretary of the Interior and the railroad--unless the government accepts railroad replacement property in lieu of cash payment. It requires the railroad to pay all surveying costs of the land transfer--surveying the largest likely cost of any land conveyance by the Federal Government. The bill models the transfer on the 1982 legislation that conveyed the railroad from Federal ownership to the State-based Alaska Railroad Corp., since there are now nearly 30 years of precedent and practice that should make the land conveyance issues involved in a rail extension clearer and easier to resolve.

This bill since it allows the secretary only to clear a right of way corridor does not impact the lone controversy that I am aware of involving the extension. That is the exact location of a bridge needed for the rail line to cross the Tanana River near Salcha. It is certainly my hope that the U.S. Army Corps of Engineers early this spring will follow the route approved in January 2010 and locate the bridge near Salcha, where it was cleared to go by the Surface Transportation Board after a four-year environmental review of the project. But whether the Corps approves the route, or whether EPA presses its concerns about the bridge, the bill will still be needed to authorize the right-of-way corridor over whatever final route wins approval.

For a host of reasons, it makes sense for the Alaska Railroad to be permitted to advance this extension, the first major extension of the railroad's track bed in Alaska since lines were run to Whittier during World War II in 1943. My hope is that this bill will receive a thoughtful review by the Senate Energy and Natural Resources Committee and be approved by Congress during the 112th Congress.

Mr. President, I rise today to introduce three pieces of legislation aimed at increasing the production of our hardest working renewable resource, one that often gets overlooked in the clean energy debate--hydropower. The first bill I would like to introduce today is the Hydropower Improvement Act of 2011, cosponsored by my colleagues Senators Bingaman, Risch, Cantwell, Crapo, Wyden, Murray, Begich, and Whitehouse, true hydropower advocates. The Hydropower Improvement Act of 2011 seeks to substantially increase the capacity and generation of our clean, renewable hydropower resources that will improve environmental quality and support local job creation and economic investment across the Nation.

There is no question that hydropower is, and must continue to be, part of our energy solution. It is the largest source of renewable electricity in the United States. The 100,000 megawatts of hydroelectric capacity we now have today provide about seven percent of the Nation's electricity needs. Hydro-electric generation is carbon- free baseload power that allows us to avoid approximately 200 million metric ton of carbon emissions each year. Hydropower is clean, efficient, and inexpensive. Yet, despite its tremendous benefits I am constantly amazed at how some undervalue this important resource.

Perhaps it is because conventional wisdom dismisses our Nation's hydropower capacity as tapped out. That is simply not the case. If anything, hydropower is really an under-developed resource--something we certainly understand in my home State of Alaska where hydro already supplies 24 percent of the State's electricity needs and over 200 promising sites for further hydropower development have been identified. There is great potential for additional hydropower development in every state, not just Alaska.

According to the Obama administration, conventional hydropower facilities have the capacity to generate an additional 75,000 megawatts of power--a staggering amount of clean, inexpensive power. Now that doesn't seem possible until you realize that only three percent of the country's 80,000 existing dams are even electrified. Significant amounts of new capacity--anywhere between 20,000 and 60,000 megawatts-- can be derived from simple efficiency improvements or capacity additions at existing facilities. Additional hydropower can be captured in existing man-made conduits and hydroelectric pumped storage projects can help reliably integrate other renewable resources that are intermittent, such as wind, onto our grid.

The Hydropower Improvement Act of 2011 seeks to substantially increase our Nation's hydropower capacity in an effort to expand clean power generation and create domestic jobs. The legislation establishes a competitive grants program and directs the Energy Department to produce and implement a plan for the research, development and demonstration of increased hydropower capacity. The bill provides the Federal Energy Regulatory Commission with the authority to extend preliminary permit terms; to work with federal resource agencies and stakeholders to make the review process for conduit and small hydropower projects more efficient; and to explore a possible two-year licensing process for hydropower development at non-powered dams and closed loop pumped storage projects. The act also calls for studies on the resource development at Bureau of Reclamation facilities and in conduit projects, as well as on suitable pumped storage locations. Importantly, by utilizing existing authorizations, the bill does not represent new funding.

It is my hope that as the Senate considers our Nation's long-term energy policy, we can finally recognize the important contribution the renewable resource of hydropower makes, and will continue to make, to our clean energy goals. This legislation is supported by the National Hydropower Association, the American Public Power Association, the Family Farm Alliance, the National Rural Electric Cooperative Association, the Edison Electric Institute, and the National Water Resources Association. I ask my colleagues to join me in supporting the Hydropower Improvement Act of 2011 to promote the further development of our most cost-effective, clean energy option.

Mr. President, I rise to introduce legislation that is designed to speed up the development of renewable ocean energy--wave, current and tidal energy--across the nation and also in my home State of Alaska. The Hydrokinetic Renewable Energy Promotion Act of 2011 is cosponsored by my colleague from Alaska, Senator Begich.

Since 2004 I have had a strong interest in working to promote the research and development of marine hydrokinetic energy--the effort to produce electricity from waves, current and tidal energy--all of which is indirectly driven by the sun. With 70 percent of our planet covered with water, marine hydrokinetic energy has the potential to be a major source of the world's clean, non-carbon emitting power in the future.

The Electric Power Research Institute has estimated that our Nation's ocean resources could generate 252 million megawatt hours of electricity--63 percent of our entire electricity generation--if ocean energy gained the same financial and research incentives currently enjoyed by other forms of renewable energy.

In the 2005 Energy Policy Act, we started the process of leveling the playing field. In that bill, Congress authorized Federal research and included ocean energy in both the federal renewable energy purchase requirements and the federal production incentives. In the 2007 Energy Independence and Security Act, we authorized ocean energy research and demonstration centers. In 2008, we finally qualified ocean energy

to receive a renewable energy Production Tax Credit, although unfortunately at a lower rate than some other renewable energy resources receive.

The Hydrokinetic Renewable Energy Promotion Act of 2011, along with a related tax measure that I will discuss next, seeks to increase the industry's growth through additional federal aid. Specifically, the bill authorizes the Department of Energy to expand its research and development efforts on marine hydrokinetic energy via advanced engineering and integration systems. It further authorizes the Department to transfer environmental data throughout the industry in order to expedite environmental assessments and demonstration project approvals. The legislation calls for the creation of three testing facilities to be developed by states, universities, or non-profit entities to test marine hydrokinetic technology.

Importantly, the legislation directs the development of a Federal Marine-Based Energy Device Verification program. Through this program, the government will be able to certify the performance of new marine technologies in order to reduce market risks for utilities purchasing power from new devices. The bill also authorizes the Federal government to set up an adaptive management program and a fund to help pay for the regulatory permitting and development of new marine technologies. This program should help demonstration projects to win permitting approvals.

This bill further amends Section 803 from the Energy Independence and Security Act. This was a provision I had authored in that 2007 energy bill to create a renewable energy deployment grants program for all forms of renewable energy. That program has never been funded because it has been inaccurately perceived as an Alaska-only program. The amendments make clear that the renewable energy grants program is national in scope and is available to assist projects in high-cost areas, where power costs exceed 125 percent of the national average.

The Hydrokinetic Renewable Energy Promotion Act of 2011 is very similar to marine and hydrokinetic provisions that won the approval of the Senate Energy and Natural Resources Committee last Congress and were included in S. 1462, the American Clean Energy Leadership Act. This bill, however, is far less expensive, authorizing up to $225 million in aid over 3 years to jump start marine hydrokinetic power-- substantially less than the $3.25 billion authorized by the original legislation. Moreover, the spending authorized in this legislation is offset via the reprogramming of previously un-utilized Congressional authorizations.

Coming from Alaska where there are more than 80 large communities located along the State's 34,000 miles of coastline and major river systems, it is clear that perfecting marine energy could be of immense benefit to the Nation. It simply makes good sense to harness the power of the sun, wind, waves, and river and ocean currents to make electricity. When the fuel is free, it's obviously economic to harness its power.

This legislation is designed to aid development nationally, but also in Alaska where several companies already have proposed test projects in the Yukon and Tanana Rivers and in Cook Inlet, along with Kachemak Bay and Inside Passage waters. Projects are under consideration at Eagle, Galena, Ruby, Tanana, in addition to near Anchorage, with others being considered near Homer and in Southeast.

This bill would allow the marine industry to be on a level playing field with other renewables such as wind, solar and geothermal power, all of which have received large budget increases in the President's fiscal year 2012 budget proposal. It would truly help the industry prove whether the technology can achieve the technical success and the economies of scale needed for it to become a major component of the nation's energy mix. I hope that Congress will give real consideration to the Hydrokinetic Renewable Energy Promotion Act of 2011, as well as the other bills that I am introducing today to aid hydroelectric development throughout the country.

Mr. President, I rise to introduce the Hydropower Renewable Energy Development Act of 2011, legislation to extend certain benefits and income tax provisions to energy generated by hydropower resources. This legislation is co-sponsored by my colleague from Alaska, Senator Begich.

We have an incredible amount of hydropower potential in my home State of Alaska. To date, we have almost 50 hydropower projects--in a range of sizes from the 126 megawatt Bradley Lake project to the 7 kilowatt Walsh Creek project--that produce about 24 percent of the State's electricity needs. Alaska is proof that the hydropower resource is not tapped out--not even close. Currently, there are 32 additional hydropower projects, just in Southeast, that are either under construction or on the drawing boards. Statewide there are another 200 areas that have been identified as promising sites for lake taps, run of river, pumped storage and even new hydroelectric reservoirs. With the proper financing, we could keep a dozen hydro construction companies fully employed in the State for a decade or even longer. That is just in Alaska. There are tremendous opportunities in each and every State to further develop this clean energy alternative.

Hydropower, by definition, is a renewable resource. It produces no carbon emissions and through rainfall and melting snowpacks it is able to be replenished. Yet there are some who would deny this important classification to the hydropower resource. The Hydropower Renewable Energy Development Act of 2011 directs that the generation of hydroelectric power be treated as a ``renewable'' resource for purposes of any Federal program or standard. This reclassification of hydroelectric generation should help to incent the further production of this important and often undervalued resource.

Next, the bill provides parity treatment for hydropower resources in the Production Tax Credit, PTC. Currently, companies that generate wind, solar, geothermal, and closed-loop biomass systems are eligible for the PTC which provides a 2.1 cent per kilowatt-hour, kWh, benefit for the first 10 years of a renewable energy facility's operation. Other technologies, such as incremental hydropower, certain generation at non-powered facilities, and wave and tidal receive a lesser value tax credit of 1.1 cent per kWh. The Hydropower Renewable Energy Development Act of 2011 eliminates the distinction between the two categories so that all qualified hydropower resources receive the full PTC credit. The bill further expands upon the types of hydropower resources that can qualify for the PTC, allowing new hydro generation, small hydropower under 50 megawatts, lake taps, and pumped storage facilities to qualify as well.

The Hydropower Renewable Energy Development Act of 2011 also carries this expanded qualification of hydropower to the Clean Renewable Energy Bonds, CREBS, program.

Because non-profits like rural electric cooperatives and public power providers are not eligible for the PTC due to their tax-exempt status, CREBS was created to encourage these entities to undertake renewable energy development as well. This program has been wildly popular and has been oversubscribed since its inception. There are endless possibilities for increased hydropower production by electric cooperatives and public power providers and they should be given the proper financial incentive to do so.

Finally, the bill provides for a 5-year accelerated depreciation period for equipment which produces electricity from marine and hydrokinetic energy, as well as conventional hydropower resources.

I ask my colleagues to support this hydropower tax legislation. The further development of this untapped renewable resource will help us meet our clean energy goals through the generation of carbon-free, baseload power. At a time of record unemployment, the addition of hydropower capacity throughout the nation will lead to hundreds of thousands of good paying, domestic jobs.

Mr. President, I rise today, along with Senator Warner, to reintroduce legislation that provides greater technical resources to the Commissioners of the Federal Communications Commission. Such resources are essential to making sound regulatory decisions and being a more effective technical agency--especially in this era of rapid innovation in the industries under the Commission's jurisdiction.

Specifically, the FCC Technical Expertise Capacity Heightening or ``FCC TECH'' Act would allow Commissioners'' to appoint a staff member--an electrical engineer or computer scientist--to provide in- depth technical consultation, and commission a study by the National Academy of Sciences on the technical policy decision-making process and the availability of technical personnel at FCC. The study would include an examination of the FCC's technical policy decision-making, current technical personnel staffing levels, and agency recruiting and hiring processes of technical staff and engineers, and make specific recommendations to improve these areas.

Over the past several years, I have shared the concerns voiced by the technical community and even some Commissioners themselves about the lack of technical resources and expertise at the FCC. Such concern is warranted. In 1948, the FCC had 720 engineers on staff; today, it has fewer than 270--an astonishing 63 percent reduction--even though the FCC now must face more technical issues concerning the Internet, advanced wireless communications, commercial cable & satellite industries, and broadband. It should be noted that engineering staff currently only accounts for a dismally low 14 percent of the FCC's workforce--in 1948 that figure was more than 50 percent.

A December 2009 report by the Government Accountability Office (GAO- 10-79) provides additional evidence of the need for this legislation. The GAO concluded that ``weaknesses in FCC's processes for collecting and using information also raise concerns regarding the transparency and informed nature of FCC's decision-making process.'' Furthermore, the report found the ``FCC faces challenges in ensuring it has the expertise needed to adapt to a changing market place.''

So in a time when citizens are demanding more effective and efficient government and zero government waste, taking such steps as prescribed by this legislation will ensure the FCC is adequately equipped legally and technically to properly craft policy. It should be noted this legislation does not require new staff--it just makes better use of them. In addition, streamlining FCC processes and rulemakings will make sure the Commission keeps pace with the dynamics of the industry it oversees, which is important in order for U.S. companies to continue to be competitive in this global economy.

In a letter I wrote to Chairman Genachowski last year, I highlighted several outstanding spectrum proceedings that I urged the Commission to conclude. The proceedings I mentioned had a common characteristic that concerned me--all of them had been open for three years or longer, and another related proceeding had been pending for well over a decade. This regulatory delay and uncertainty due to the Commission's inaction adversely affects American businesses, which request technical waivers or file petitions to better compete domestically and internationally, and suppresses innovation and the jobs associated with it. We must make sure the Commission is a catalyst to innovation and jobs, not an inhibitor.

Even the general public is aware of the significant technical deficit that exists at the Commission and the importance of increasing its technical aptitude--one of the top public recommendations on the FCC's reform website, reboot.fcc.gov, is to ``require at least one FCC Commissioner to be an engineer.''

This Administration has stressed the importance of innovation being a vital component in our economic recovery, so allowing a shortage of technical

staff to exist at an agency responsible for regulating very technical industries that will be the main drivers for innovation is counterintuitive. The President has also placed a major emphasis on science, technology, engineering, and mathematics, STEM, education in order to enhance our nation's competitiveness and economic wellbeing in the global economy yet, engineers only constitute 14 percent of the FCC's workforce and, it is my understanding, there is only one engineer in a senior management role at the Commission today--the government's technical expert agency.

This legislation enhances technical resources at the FCC so it will be better equipped and more agile to address the ever-changing technical landscape from a regulatory perspective. If it isn't, our nation's technical leadership in this area will continue to erode and it will be even more difficult to lay the proper policy foundation necessary to meet future telecommunications needs. It is also an essential component to execute the FCC's recently released National Broadband Plan, which includes several technically complex initiatives.

Last Congress, several technical organizations expressed support for the legislation--the Institute of Electrical and Electronics Engineers, Society of Broadcast Engineers, Association for Computing Machinery, and the Association of Federal Communications Consulting Engineers. Also, prominent individuals in this field, such as Vint Cerf, and former Senior FCC Technical Officials Dale Hatfield, Dave Farber, and Robert Powers support the legislation.

In the past, Chairman Genachowski has stated ``the country expects the FCC to be an expert agency.'' Being an expert agency starts with having the technical expertise to comprehensively understand and examine the issues that are within its jurisdiction and also acting on those issues in a timely manner. If it doesn't, our nation's technical leadership in telecommunications could continue to erode due to regulatory bottlenecks that are created at the Commission from unresolved proceedings and petitions. Removing the bottlenecks that exist through streamlining processes and removing bureaucracy will reduce government expenses and waste over the long term.

This bill takes steps toward properly addressing glaring technical deficiencies at the Commission, which left unaddressed could continue to hamper American innovation and competitiveness. This is absolutely critical given how rapidly technologies are changing and the implications that regulation could have on the underlying technical catalysts of innovation. That is why I sincerely hope that my colleagues join Senator Warner and me in supporting this critical legislation.

Mr. President, I rise to introduce legislation with Senator Merkley that will provide the President of the United States with emergency powers to aggressively reduce the Federal Government's demand for energy.

The Strategic Petroleum Demand Response Act will be an additional tool to address rapidly rising energy prices by reducing our country's demand for oil. The political instability in the Middle East reminds us that this region, which holds the largest reserves of oil in the world, has had profound implications on our country's economy by dramatically affecting the price of oil. Although the attention has been on potential supply disruption, our country also consumes nearly 17 million barrels of oil per day and through aggressive measures the Federal Government can lead our country in reducing its energy bill, curtailing its consumption of oil, and reducing the price of oil for consumers.

As we encounter these price spikes, some have called for a release of oil from our country's strategic petroleum reserve. The fact is prior to releasing our country's strategic reserves we must develop policies that prioritize the Federal Government's consumption of these critical oil supplies. The Federal Government can reduce nonemergency travel, reduce congestion on the roads by providing flexible work hours, decrease the use of oil in heating and cooling buildings, and work with local and state governments to cut consumption as well. We must develop a strategic petroleum strategy that reflects the fact that prices are dictated by both supply and demand and the Strategic Petroleum Demand Response Act will address the demand side of the equation.

Since the start of the year the price for West Texas Intermediate has increased by 16 percent and the week of February 28 encountered the second highest net increase in gasoline prices in our country's history. While I strongly believe that we need to develop specific long-term strategies that build on the success of fuel economy standards and reduce our consumption of oil, this legislation will allow the President to take immediate and decisive action to address any energy crisis through both supply and demand.

Mr. President, I rise today to introduce bipartisan legislation along with Senators Landrieu, Merkley, Brown of Massachusetts, and Enzi, titled the Small Business Contracting Fraud Prevention Act of 2011.

In the past year, the Government Accountability Office, GAO, has identified vulnerabilities and abuses in virtually all of the SBA's contracting programs, including the 8(a) Business Development Program, the Historically Underutilized Business Zone, HUBZone, program, and the Service-Disabled Veteran-Owned small business, SDVOSB, program. Our legislation attempts to remedy the spate of illegitimate firms siphoning away contracts from the rightful businesses trying to compete within the SBA's contracting programs.

As Ranking Member of the Senate Committee on Small Business and Entrepreneurship, I take very seriously our responsibility of vigorous oversight. That is why, last December, Senator Landrieu and I sent a letter to the SBA highlighting the recent press headlines and GAO reports of fraud and abuse that have plagued the Agency's contracting programs. That letter stated unequivocally that our Committee's first priority this Congress is ensuring that ALL of the SBA's contracting programs are running efficiently, effectively, and free of exploitation. Adopting this critical small business legislation is an effective first step at ensuring all small businesses are competing fairly and honestly within the Federal marketplace.

As recently as Saturday March 12, the Washington Post, as part of an ongoing investigation, published an article titled, ``DC insiders can reap fortunes from federal programs for small businesses.'' This article states ``Government officials were not monitoring contracts for compliance with rules.'' The report exposes a glaring deficiency in contract oversight. Moreover, an SBA spokesperson is quoted as saying the SBA ``long ago transferred that authority to the Pentagon and other agencies.'' This hands-off attitude is unacceptable, and as I told the SBA Deputy Administrator at a recent Small Business Committee hearing, the ultimate authority for monitoring fraud lies with the SBA.

This legislation contains recommendations both from the SBA Inspector General and the GAO for combating these reports of fraud and addresses vulnerabilities in the Service-Disabled Veteran-Owned small business program, the HUBZone program, and the 8(a) program. Additionally, the bill will work to change the culture at SBA to make the process of suspensions and debarments more transparent.

In order to effectively execute the small business contracting programs, the SBA needs a comprehensive framework to provide effective certification, continued surveillance and monitoring, and robust enforcement throughout the SBA's contracting portfolio. This bill aims to increase criminal prosecutions as well as suspension and debarments for businesses found to have attained contracts through fraudulent means, and requires the SBA to submit a report to Congress annually detailing the specific data on all suspensions, debarments, and cases referred to the Department of Justice for criminal prosecutions.

To that end, the SBIR bill we are now debating on the Senate floor, includes stringent oversight and fraud prevention measures, requiring Inspectors General of participating Federal agencies to establish fraud detection measures, coordinate fraud-related information sharing between agencies, and provide fraud prevention related education and training to agencies administering the programs, among other initiatives.

As a senior member of the Senate Commerce Committee, I worked with the Chairman, Senator Rockefeller, in developing this language following a 2009 committee investigation and hearing on the subject of fraud in the SBIR program. My amendment goes even further and provides the SBA more stringent oversight capacity across all the SBA contracting programs. It is SBA's duty to utilize every fraud prevention measure at its disposal and this amendment puts the tools in place to punish the bad actors that have infiltrated the SBA contracting programs.

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

Mr. President, I rise today to introduce the Earthquake Insurance Affordability Act. This bill makes important changes that will increase availability and reduce cost of catastrophic insurance for homeowners in California and other earthquake-prone Sstates.

The tragedy and devastation of the recent 9.0 earthquake in Japan was a real wakeup call for many of us. You see, the people of Japan are keenly aware of the risks of earthquakes. Every year, thousands of people participate in earthquake drills, and their building codes are the most advanced in the world. Japanese seismologists have the most sophisticated technology and monitoring systems. But all of this did little to protect them from an earthquake of this magnitude.

The people of California and much of the West Coast face a similar risk. The United States Geological Survey predicts a 99.7 percent chance that a magnitude 6.7 earthquake will strike in California in the next 30 years. The agency also predicts a 46 percent chance that a magnitude 7.5 percent or higher earthquake will strike California in the next 30 years.

The 2008 ShakeOut Scenario conducted by the US Geological Survey and FEMA modeled a 7.8 earthquake on the southern San Andres Fault. Though that quake was only 1/10th the size of the recent event in Honshu, Japan, FEMA estimated that a 7.8 earthquake in Los Angeles would result in 2,000 deaths and an economic loss of $213.3 billion.

The simple fact is that we cannot prevent earthquakes, so we must be prepared in the event one does occur. That is the only way we will be able to respond and recover quickly.

That is why I am introducing the Earthquake Insurance Affordability Act. This legislation allows non-profit state-run disaster insurance programs to receive federal guarantees if they need access to credit in the aftermath of a catastrophic disaster. Access to credit is critical in the immediate aftermath of disasters because the market will likely be disrupted and private institutions will be reluctant to lend the large sums necessary to facilitate a quick and meaningful recovery.

This Federal guarantee will be limited. The Secretary of Treasury must certify that recipients of each of the loan guarantee are able to repay debts within a reasonable timeframe. Moreover, my legislation ensures that the cost of the program is born by state programs, not the federal taxpayer. The Congressional Budget Office has estimated that my bill comes at no cost to the taxpayer.

But this legislation is about more than just access to credit--it will guarantee homeowners have access to affordable earthquake insurance coverage. This means homeowners will be able to quickly rebuild in the aftermath of an earthquake.

This legislation is necessary because most homeowner insurance policies do not cover earthquakes. In California, for instance, most homeowner insurance policies cover fire damage but not damage caused by earthquakes.

As a result, homeowners are often put in the position of either having to purchase expensive supplemental insurance or leaving their homes uninsured against these risks.

In order to help promote coverage for these risks, many states and the Federal Government have set up supplemental insurance programs that offer this coverage at affordable rates.

At the Federal level, the National Flood Insurance Program offers flood insurance to residents living in flood plains where private insurance is unavailable or too expensive.

Similar State-level programs exist in California, Florida, Texas, and other states to help residents protect their homes against catastrophic disasters. In my state, The California Earthquake Authority, CEA, was set up after the devastating 1994 Northridge earthquake to make earthquake insurance more affordable.

Unfortunately, many of these programs are not fully utilized. The California Earthquake Authority insures 70 percent of homeowners who purchase earthquake insurance in my state, but only 770,000 homeowners in California opted to buy such insurance. That means only 12 percent of Californians will be covered up if an earthquake hits.

The reason for such low use in that premiums and deductibles remain too high for the average consumer. A policy covering a $400,000 home and $60,000 of its contents costs an additional $1,105 per year, and that's on top of normal homeowners insurance. Even worse, with such high deductibles, policyholders must suffer near total collapse before they receive any payout. For most, this just isn't a good deal.

The reason for high-cost, high-deductible policies is that the CEA is forced to spend nearly $200 million each year to purchase reinsurance. This ensures that in the event of a major catastrophe, the CEA will still be able to pay out all of its claims. It is good policy for the CEA to incur this expense, and I commend their responsible business practices.

However, since 1994 the California Earthquake Authority has paid $2.5 billion in reinsurance premiums and only received back $250,000 in claims. It doesn't take a savvy businessman to see this isn't a good investment. But with minimal changes to federal law, the CEA and other state-run insurance programs can drastically reduce the

need for expensive reinsurance and substantially decrease the cost of their products.

The Earthquake Insurance Affordability Act makes these changes, allowing programs like the California Earthquake Authority to access sufficient capital following a disaster.

Let me be clear: this is not a bailout or a handout for states. The California Earthquake Authority is independent from the state and financially stable.

This bill would increase insurance coverage in California and the rest of the country and help consumers deal with losses that will occur when the next major disaster strikes.

Over the first 5 years this legislation is in effect, nearly half a billion dollars in reinsurance costs would be saved and passed along to consumers.

The California Earthquake Authority could cut premiums by 30 percent or deductibles by 50 percent.

This could result in at least 700,000 new California homeowners purchasing earthquake insurance.

Following major disasters, the federal government spends millions of dollars, and often billions, cleaning up the mess.

Katrina cost FEMA $7.2 billion.

The Northridge earthquake cost FEMA $7 billion.

Hurricane Andrew cost FEMA $1.8 billion.

By enacting the Earthquake Insurance Affordability Act and increasing the number of individuals with insurance, the cost of disaster recovery to the Federal Government could be substantially lower.

This is because FEMA cannot make payments to individuals who have insurance coverage. Therefore, every family that purchases earthquake insurance as a result of this bill, is one less family that FEMA may have to support when disaster strikes.

The bottom line is this: the next big earthquake is coming and we are not prepared for it. Families need to make sure they have earthquake preparedness plans, and homeowners need to evaluate the best ways to protect their homes. Structures need to be strengthened and all new buildings must be built to the highest standards. The Federal Government must also do its part, to help facilitate this preparedness.

The Earthquake Insurance Affordability Act will make great strides to help our country prepare for a major earthquake, and it does so without burdening the federal taxpayer. I urge my colleagues to quickly adopt this critical piece of legislation and help us better prepare for tragedy.

Mr. President, today Senator Kyl and I are introducing two bills that will assist with alleviating the costs of illegal immigration for State and local governments--the SCAAP Reauthorization Act and the SCAAP Reimbursement Protection Act of 2011.

We are joined by Senators McCain, Schumer, Boxer, and Hutchison.

Immigration is a federal responsibility, as is securing the Nation's borders. When the Federal Government fails to prevent illegal immigration, as it has for some time now, it needs to take responsibility for the consequences of this failure.

However, the burden of incarcerating illegal aliens who commit crimes in our country has fallen largely to the States, and it weighs heavily on them, especially during this time of economic uncertainty. Last year, the State of California spent an estimated $1 billion to incarcerate criminal aliens.

Understanding the expenses that States and localities bear, Congress enacted the State Criminal Alien Assistance Program, SCAAP, in 1994 as part of the Violent Crime Control Act. The program was designed to help reimburse States and local governments for the costs of incarcerating criminal aliens, and was last reauthorized in 2006 as part of a Department of Justice Reauthorization bill. The SCAAP Reauthorization bill that I am introducing today will reauthorize the program for an additional four years, until fiscal year 2015.

The second bill that we are introducing today is necessary to fix a switch in interpretation by the Justice Department.

Prior to 2003, the Department of Justice interpreted the SCAAP statute to include reimbursement to States and localities for incarcerating undocumented criminal aliens who have been accused or convicted of State and local offenses, and have been incarcerated for a minimum of 72 hours. However, in 2003, DOJ changed its interpretation, and began limiting reimbursement to the amount States and localities spend incarcerating convicted criminal aliens for at least 4 consecutive days.

Reimbursing States and localities only for the costs when a criminal alien is convicted and incarcerated for 4 consecutive days significantly undermines the goal of SCAAP that States and localities should not bear the burden of a broken Federal immigration system. The actual costs of this failed Federal system begin when these aliens are charged with a crime, transported, and incarcerated for any length of time.

This narrow interpretation by the Justice Department is even more devastating because SCAAP is consistently under-funded. The President's fiscal year 2012 budget request for SCAAP represents a 59 percent reduction below the fiscal year 2010 level and is far short of meeting the actual reimbursement costs of most States. As a result, SCAAP only reimburses States for a fraction of the costs of incarcerating criminal aliens. In 2009, Los Angeles County alone spent $116.6 million to house undocumented felons and received only $15.4 million in reimbursement payments.

The SCAAP Reimbursement Protection Act of 2011 will fix this problem by making it clear that States can be reimbursed for the full costs of incarcerating aliens who are either charged with or convicted of a felony or two misdemeanors.

When the Federal Government does not reimburse States and local governments for the costs of incarcerating criminal aliens, it is at the expense of local services and law enforcement. American communities simply cannot afford to shoulder the weight of our immigration policies.

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

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

Mr. President, I rise today with Senator Graham to introduce the Sunshine in Litigation Act of 2011, a bill that will curb the ongoing abuse of secrecy orders in Federal courts. The result of this abuse, which often comes in the form of sealed settlement agreements, is to keep important health and safety information hidden from the public. As we recognize Sunshine Week, this bipartisan, commonsense measure is an important step to improving transparency in our

courthouses by requiring judges to consider public health and safety before permitting secrecy agreements.

This problem of court secrecy has been occurring for decades, and most often arises in product liability cases. Typically, an individual brings a cause of action against a manufacturer for an injury or death that has resulted from a defect in one of its products. The injured party often faces a large corporation that can spend a virtually unlimited amount of money defending the lawsuit, prolonging the time it takes to reach resolution. Facing a formidable opponent and mounting medical bills, a plaintiff often has no choice but to settle the litigation. In exchange for the award he or she was seeking, the victim is forced to agree to a provision that prohibits him or her from revealing information disclosed during the litigation.

Plaintiffs get a respectable award, and the defendant is able to keep damaging information from getting out. But the American public incurs the loss because they remain unaware of critical public health and safety information that could potentially save lives.

This concern about excessive secrecy is warranted by the long history of tobacco companies, automobile manufacturers, pharmaceutical companies, medical device manufacturers, and others settling with victims and using the legal system to hide information which, if it became public, could protect the American people from future health and safety harms. Surely, there are appropriate uses for such orders, like protecting trade secrets and other truly confidential company information, as well as personal identifying and classified information. This legislation makes sure such information is protected. But, protective orders are certainly not supposed to be used for the sole purpose of hiding damaging information from the public, to protect a company's reputation or profit margin.

One of the most famous cases of abuse of secrecy orders involved Bridgestone/Firestone tires. From 1992 to 2000, tread separations of various Bridgestone and Firestone tires caused accidents across the country, many resulting in serious injuries and even fatalities. Instead of owning up to their mistakes and acting responsibly, Bridgestone/Firestone quietly settled dozens of lawsuits, most of which included secrecy agreements. It wasn't until 1999, when a Houston public television station broke the story, that the company acknowledged its wrongdoing and recalled 6.5 million tires. By then, it was too late. More than 250 people had died and more than 800 were injured as a result of the defective tires.

If the story ended there, and the Bridgestone/Firestone cases were just an aberration, one might argue that there is no urgent need for legislation. But, unfortunately, the list of abuses goes on. There is the case of General Motors. Although an internal memo demonstrated that GM was aware of the risk of fire deaths from crashes of pickup trucks with ``side saddle'' fuel tanks, an estimated 750 people were killed in fires involving trucks with these fuel tanks. When victims sued, GM disclosed documents only under protective orders, and settled these cases on the condition that the information in these documents remained secret. This type of fuel tank was installed for 15 years before being discontinued.

More recently, the world's largest automaker, Toyota, has faced a barrage of litigation relating to its recall of over 8 million cars due to sudden unintended acceleration problems, causing more than eighty deaths. After years of lawsuits, Congressional oversight hearings, and Toyota's efforts to keep settlements and product information secret, a California Federal judge finally made public thousands of previously sealed documents, noting that ``the business of this litigation should be in the public domain.'' Had a judge been required to weigh the public's interest in health and safety, as this legislation would require, perhaps we would have known more about the risks sooner and some of those lives could have been saved. Until we put the public interest on par with the interests of private litigants, public health and safety will remain at risk.

This very issue is currently before a Federal judge in Orlando, FL. There, the court is faced with deciding whether AstraZeneca can keep under seal clinical studies about the harmful side effects of an antipsychotic drug, Seroquel. Plaintiffs' lawyers and Bloomberg News sued to force AstraZeneca to make public documents discovered in dismissed lawsuits. In 2009, the court unsealed some of the documents at question, but denied requests to release AstraZeneca's submissions to foreign regulators and sales representatives' notes on doctors' meetings. Despite a recent $68.5 million settlement, continued efforts to unseal crucial documents proved unsuccessful. This is exactly the sort of case where we need judges to consider public health and safety when deciding whether to allow a secrecy order.

We are mindful of the risks to public health and safety that court secrecy orders can pose in the wake of last year's horrific BP oil spill in the Gulf of Mexico. As the parties continue to fight over crucial documents, injured parties continue to accept secret settlements. We can only hope that information vital to public health and safety, which could protect against the next disaster, is not being shielded from us as well.

The examples go on and on. At a 2007 hearing before the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, Johnny Bradley Jr. described his tragic personal story that demonstrates the implications of court endorsed secrecy. In 2002, Mr. Bradley's wife was killed in a rollover accident allegedly caused by tread separation in his Cooper tires. While litigating the case, his attorney uncovered documented evidence of Cooper tire design defects. Through aggressive litigation of protective orders and confidential settlements in cases prior to the Bradleys' accident, Cooper had managed to keep the design defect documents confidential. Prior to the end of Mr. Bradley's trial, Cooper Tires settled with him on the condition that almost all litigation documents would be kept confidential under a broad protective order. With no access to documented evidence of design defects, consumers continue to remain in the dark about this life-threatening defect.

In 2005, the drug company Eli Lilly settled 8,000 cases related to harmful side effects of its drug Zyprexa. All of those settlements required plaintiffs to agree ``not to communicate, publish or cause to be published . . . any statement . . . concerning the specific events, facts or circumstances giving rise to [their] claims.'' In those cases, the plaintiffs uncovered documents which showed that, through its own research, Lilly knew about the harmful side effects as early as 1999. While the plaintiffs kept quiet, Lilly continued to sell Zyprexa and generated $4.2 billion in sales in 2005. More than a year later, information about the case was leaked to the New York Times and another 18,000 cases settled. Had the first settlement not included a secrecy agreement, consumers would have been able to make informed choices and avoid the harmful side effects, including enormous weight gain, dangerously elevated blood sugar levels, and diabetes.

There are no records kept of the number of confidentiality orders accepted by State or Federal courts. However, anecdotal evidence suggests that court secrecy and confidential settlements are prevalent. Beyond Bridgestone/Firestone, General Motors, Toyota, Seroquel, BP, Cooper Tire, and Zyprexa, secrecy agreements have also had real life consequences by allowing Dalkon Shield, Bjork-Shiley heart valves, and numerous other dangerous products and drugs to remain in the market. And those are only the ones we know about.

While some judges have already begun to move in the right direction by giving serious weight to public health and safety, we still have a long way to go. The Sunshine in Litigation Act is a modest proposal that would require Federal judges to perform a simple balancing test to ensure that in any proposed secrecy order in a case pleading facts relevant to public health and safety, the defendant's interest in secrecy truly outweighs the public interest in information related to public health and safety.

Specifically, prior to making any portion of a case confidential or sealed, a judge would have to determine--by making a particularized finding of

fact--that doing so would not restrict the disclosure of information relevant to public health and safety. Moreover, all courts, both Federal and State, would be prohibited from issuing protective orders that prevent disclosure to relevant regulatory agencies.

This legislation does not prohibit secrecy agreements across the board, and it does not place an undue burden on judges or on our courts. It simply states that where the public interest in disclosure outweighs legitimate interests in secrecy, courts should not shield important health and safety information from the public. Since last Congress, we have made changes to make absolutely clear that this would apply only to those cases with facts relevant to public health and safety, and to ensure that there is no undue burden on judges or our courts. The time to focus some sunshine on public hazards to prevent future harm is now.

I urge my colleagues to support this important legislation.

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