Floor Statements

Mr. Chairman, I rise in reluctant opposition to the Small Business Investment Expansion Act of 2007, H.R. 3567. The non- partisan Congressional Budget Office, CBO, estimates that this bill will cost $102 million over the next 5 years. Thus far this year, the CBO estimates that the Democrat-controlled House Small Business Committee has authorized $5.9 billion in new spending over the next 5 years--$1.55 billion in fiscal year 2008 alone. To put this massive spending increase in perspective, the Fiscal Year 2008 Financial Services Appropriations bill, H.R. 2829, provides $582 million in total spending on the SBA in FY 08.

In the past, legislation dealing with programs in the Small Business Investment Act operated under the assumption that the bill should not cost the taxpayer any new money. I am proud that the Republican-led Congress took the Small Business Investment Company, SBIC, program to ``zero-subsidy,'' funded solely by user-fees, first with the debenture program in 1996 and then the participating securities program in 2001. I regret that because of the downturn in the markets earlier this decade, the participating securities component of the SBIC program, which targeted equity investments in early stage small businesses, has become essentially insolvent and defunct since 2005. During the 109th Congress, I tried numerous ways in my capacity as chairman of the House Small Business Committee, to thread the needle to reopen the participating securities program while still keeping it at ``zero subsidy.'' However, H.R. 3567 abandons fiscal restraint by creating yet another new program to promote equity investments in early stage small businesses.

First, CBO estimates that the creation of the Angel Investment Program in Title III of H.R. 3567 will cost $57 million over the next 5 years. While there is a provision that requires an angel group repay any investment it receives, the repayment comes solely out of any profit the group receives. But what if the angel group makes no money? Then the taxpayer is left holding the bag. This is a departure from the regular SBIC program where upfront fees are also charged, in addition to retaining a share of the profits, to help offset the cost of the program.

The bill creates yet another new office and more bureaucracy at the Small Business Administration, SBA, to promote angel investments in early stage small firms. It also spends $1 million to create a Federal angel network to collect and maintain information on local and regional angel investors that is readily available over the Internet, e.g., www.bandofangels.com. H.R. 3567 also spends $1.5 million to create yet another grant program to increase awareness and education about angel investing, heaping potentially yet another mission upon the already stretched Small Business Development Center, SBDC, program. Earlier this year, the House passed three SBDC-related bills that created nine new programs for them to implement.

Last year, I held a hearing on the Small Business Committee to listen to the leading experts on the angel movement. At the time, the committee debated similar angel legislation, H.R. 4565, offered by Democrats to what is on the floor today. All the witnesses except the one called by the Democrats testified that because of the decentralized and informality of angels, a tax credit modeled after what exists in many states is far more preferable to creating yet another office and program at the SBA to promote angel investments. This is what the leading experts in the angel movement said about the ideas contained in H.R. 4565, which is now Title III of H.R. 3567, at the May 10, 2006, Small Business Committee hearing:

Dr. Ian Sobieski, founder and managing director of the Band of Angels: ``I would be wary of any kind of government interaction with angel groups because of the danger of perturbing a natural market process that is still good for it. The tax credit changes the environment in which capital decisions are being made . . . The danger in . . . data collection is the implied authority by which it is collected. If the Federal Government gets involved in collecting data (on angels) that has the imprimatur of the United States Government, that speaks with great weight.''

Susan Preston of Davis, Wright Tremaine LLP: ``. . . the vast majority of investments by angels are done by individuals, not members of angel groups. These are highly independent autonomous anonymous individuals that don't want their name in databases and aren't interested, for the most part, in joining groups.''

I simply don't understand why this Democratic-led Congress ignores the advice of angel experts to direct the SBA to provide capital to extremely wealthy individuals to support investments they probably would make anyway. I'm also surprised that this Democratic-led Congress, which routinely criticizes the SBA for its alleged incompetence, would add another yet another mission to its responsibilities. That's why I was proud to join Representative Earl Pomeroy of North Dakota in reintroducing the alternative to this government-run approach--the Access to Capital for Entrepreneurs, ACE, Act of 2007, H.R. 578--to keep decisions on angel investments at the individual and local level.

Second, I also have concerns about Title II of H.R. 3567 that dramatically expands the New Markets Venture Capital, NMVC, program and opens up the Federal Government to more exposure. The CBO estimates that Title II raises the subsidy or exposure rate to 17 percent and will cost the taxpayer $11 million over the next 5 years. The mission of the

NMVC is to promote venture capital investments in economically distressed communities in both urban and rural America. However, I believe the NMVC program is already a triplicate of two other programs that already exists--the regular SBIC program and the Rural Business Investment, RBIC, program at the U.S. Department of Agriculture, USDA. Of the 2,299 U.S. small businesses that received SBIC financing in fiscal year 2005, 23 percent were located in Low- and Moderate-Income (LMI) areas of the country. Those LMI-district companies received $543 million or 19 percent of the total $2.9 billion invested by SBICs in FY 2005. Also, 30 percent of SBIC investments were made in small U.S. manufacturers. For the period FY 2001 through FY 2005, SBIC investments in small manufacturing companies totaled $4.3 billion. In addition, the USDA runs the RBIC program in cooperation with the SBA to promote equity investments in rural areas. Thus, I see no need expand a program to help small businesses that are already being assisted by two other government programs.

Third, I object to reinstating taxpayer funding for the surety bond program. This program is important to help small businesses, primarily small construction firms, win federal government contracts by offering a bond to guarantee that the work will be completed. To cover the costs of those guarantees, fees are paid to the SBA by both the contractor receiving the guarantee and the surety or insurance company that issues the bond for the contractor's performance. In fiscal year 2006, the SBA provided guarantees under the surety bond program for about 5,000 small businesses and collected about $7 million in fees. Section 405 of H.R. 3567 eliminates fees that are currently charged to contractors and sureties. That's why the CBO estimates Section 405 will cost the taxpayer over the next 5 years.

Mr. Chairman, there is no need to do this. During my tenure as chairman of the Small Business Committee, I never heard from a small business complaining about fees charged in the surety bond program. This could develop into a problem for the Federal Government when small businesses, which have no financial stake in their surety bond and thus have nothing at risk if they default, do not complete the contract. I predict that there will be more broken contracts and uncompleted work. Section 405 also sets a precedent to do away with the ``zero'' subsidy policy in other SBA programs, such as in the 7(a) loan guarantee program.

But the most egregious provision in H.R. 3567 is the revamping of small business size standards in Title V. This provision allows companies not independently-owned and operated but controlled by venture capital, VC, investors to still be considered as a small business in the eyes of the Federal Government. Title V will allow large businesses and universities that establish a VC to potentially game the system to benefit from not just various SBA technology programs but every other SBA loan and procurement assistance program. It could even complicate the Regulatory Flexibility Act, which requires Federal agencies to take into account the interests of small businesses during the development of new regulations. When I was chairman of the Small Business Committee, I was proud of the bipartisan support I received in eliminating big businesses from participating in various federal small business programs. This led the SBA to finally clamp down on this abuse and issue new regulations and policies to do away with this practice. However, I fear that many of my colleagues have not fully thought through the implications of this provision. Title V would undo all the bipartisan work done on this issue over the past five years.

In particular, I spent a lot of time and effort trying to solve the specific problem of the eligibility of some small businesses with venture capital investments to participate in the Small Business Innovative Research, SBIR, program at the National Institutes of Health, NIH. The SBIR program guarantees that at least 2.5 percent of Federal research and development, R&D, dollars must go to small businesses. After the Defense Department, the NIH is the second-largest spender of R&D funding in the Federal Government.

Title V tries to solve a problem that is grossly exaggerated. It is a myth that small businesses with VC investments are unable to participate in the SBIR program at NIH because of a misinterpretation of the law by the SBA. In an impartial Government Accountability Office, GAO, study that I requested, they discovered that 17 percent of NIH SBIR awards, accounting for 18 percent of the dollar value, went to small business with VC investments in fiscal year 2004. These small firms had no problem in complying with SBA guidelines. Nevertheless, I tried to proffer a compromise that would have established a 2-year pilot program to set-aside 0.5 percent of NIH R&D funding, over-and- above the 2.5 percent currently set-aside for small businesses, for these firms that receive a preponderance of their funding from VCs and do not own or control their company. Unfortunately, my compromise was rejected by NIH and by the biotech and VC industries. However, the solution contained in Title V is a dramatic overreach in the effort to solve this specific problem with NIH.

The amendment offered by my good friend and colleague, Representative Steve Chabot of Ohio, is a good step forward. It prohibits any one single VC from owning a small business that wishes to benefit from a SBA program. However, I can easily envision a situation where two VCs with common ownership but with different board of directors could game the system and still be eligible for SBA programs. Because even the largest VCs have less than 500 employees, Title V--even as changed by the Chabot amendment--would open up SBA programs to large businesses and universities.

In particular, I am concerned about the future of the SBIR program. It's important to remember that when the SBIR program was created 25 years ago, it was because of the frustration that federal research and development dollars went only to large businesses and universities. Even under current law, only 2.5 percent of all Federal R&D dollars is set-aside for small business. But Title V allows large universities that establish a VC to participate in the SBIR program. This provision will further decrease Federal R&D dollars going to independently owned and operated small high technology firms.

Mr. Chairman, I enclose for the record the Statement of Administration Policy in opposition to this bill plus two letters from the oldest small business association in America--the National Small Business Association; a letter from the nation's only association that represents small high technology firms--the Small Business Technology Council; and a letter from the world's largest business federation--the U.S. Chamber of Commerce. I urge my colleagues to heed the recommendations of the administration and these business associations by voting against H.R. 3567.

Executive Office of the President, Office of Management

and Budget,

Washington, DC, September 26, 2007.

Statement of Administration Policy

H.R. 3567--small business investment expansion act of 2007

The Administration strongly opposes House passage of H.R.

3567.

The Administration strongly opposes the proposed ``Angel

Investor'' program. The Administration does not support

providing capital to high net worth individuals to support

their investments. The best way to strengthen small business

is through an economic framework that encourages investment

at all levels through broad-based and reasonable tax rates

and reduced regulatory impediments to the flow of capital.

This approach will have a more significant impact than any

targeted program.

The Administration also strongly opposes the proposed

change to the definition of a small business for the purposes

of venture capital investment. This redefinition strips the

elements of independent ownership and control that identify

small business ownership under current law. Not only would

this change be inequitable for actual small businesses, but

it would be a step backward from our recent progress in

addressing the misidentification of large firms as small

businesses for Federal procurement purposes. By eliminating

the concept of affiliation for venture capital operating

companies, the provision would allow large businesses, not-

for-profit organizations, and colleges and universities to

own and control small businesses and benefit from programs

designed for independent small businesses. The Administration

believes that the intent of this provision is to allow for

reasonable, non-controlling investment in small business.

Unfortunately, the current language is overly broad, and the

Administration strongly opposes this provision unless it is

amended to ensure that ownership and control rests positively

with the entrepreneur.

Mr. Speaker, point of order.

Who was controlling the clock that puts up the word ``final''?

The computer is doing it?

Mr. Speaker, we are hearing this argument, let's just fix it in conference. Well, the last patent reform bill that passed, H.R. 1561, passed the House on March 3 of 2004. The Senate Judiciary Committee passed their bill, but it never saw action before the full Senate. The bill that the House passed never made it to conference, but it became law because someone stuffed it into the giant multi-thousand page omnibus consolidated appropriations bill which became law.

And besides that, we are Members of Congress. For us to stand up here and say, well, this is too confusing for us to understand, excuse me; that's what we're paid for. And if we have to take a considerable period of our time to study and learn patent law, that's our job. If we don't do that, we are failing in our obligation to the people that we represent.

So, what happened last time was good for making sausage. You stuffed the House-passed bill which never passed the Senate, never made it into conference, into a giant omnibus bill, but that's not how you make legislation.

Now, look what's going on here. We were told that we had to file by 5 p.m. on Wednesday afternoon any amendments to this bill. I went to the Rules Committee at 3 p.m. yesterday, where we met on the bill. At 2:43 p.m., the first manager's amendment was filed, 18 pages long. While we were still discussing the first manager's amendment, the second manager's amendment got filed at 3:50 p.m.

At 5:30 in the afternoon, the general public found out what was in it. I just found out in an analysis done on the second manager's amendment that this would be crippling to the small inventor. It would be horrifying to the patent holders in this country, that it would favor overseas patent holders as opposed to the American inventor.

All I asked for in that Rules Committee was for an extra hour of debate, just 2 hours of debate on one of the most important topics this place has ever had, and we were denied that. And people turn on C-SPAN. They see us. We'll take a half an hour to debate a post office, an hour to debate two post offices, the naming of the post offices, but 1 hour, just 1 hour to debate one of the most important issues that has ever come before this Congress in 50 years, 50 years. That's just fairness. Just fairness is all we're asking for.

I feel like asking for a motion to adjourn, but I'm not going to. That would not be fair to the Members that have other things to do.

But to tell the American people the Members of Congress really don't need

to know the details, that we'll take care of the details for you, that's an abandonment of our obligation here.

We come here with the obligation to learn every issue on which we vote. We may not know all the nuances, we may not know all the details, but nobody's going to tell us that this is too confusing for you to understand, because that's not what the American people send us here for.

And so I would just urge you, urge the folks, that there is no way possible in the limited amount of time that we can discuss this bill.

Let me show you what this does. This is Caterpillar, this is RIM. It puts two companies against each other. RIM has a lot of American parts. The bill should be written to accommodate both, to accommodate the American inventions in both of these manufactured products.

Vote ``no'' on the rule.

Mr. Chairman, if we had to patent the way Congress is considering this bill, no one would claim to be its inventor. This is a disgrace. One of the most important bills to come before this Nation in 60 years concerning manufacturing and patentability of articles and processes is so limited that the Democrats have given just 4 minutes of their 30 to two people on the other side. They owe them an apology. They owe them at least another hour of debate. The American people deserve a lot more debate than that.

An amendment was filed at 2:46 yesterday before the Rules Committee, the manager's amendment. One of the groups that contacted us representing pharmacies and labor unions and Caterpillar and all kinds of manufacturing organizations got a hold of it, finally had to analyze it overnight because of the complexity of the issues, and said, my gosh, this could destroy the system of patent law and protection of patent holders in this country.

What we are asking for is the opportunity to be able to explain it. Members of Congress should not be placed in the position of choosing between innovation.

Let me give you an example. Caterpillar is on one side, in Peoria, Illinois, Phil Hare's district. Hundreds of thousands of suppliers across the country, including the Midwest. Research in Motion, the maker of the BlackBerry, is on the other side of the issue, in favor of it. But inside of the BlackBerry is this motherboard. It is magnesium. It is made by Chicago White Metals. They have the finest processes for magnesium hot-chamber diecasting, a company that is the only diecasting company in the country that is rated ISO 14001 for its higher environmental standards.

You have to get on the inside of these machines to understand the importance of this law. You have to be able to take every single word that is added at the last minute and be able to study it to see the impact upon American innovation. That is what this debate is about. It is simply asking for more time.

The first thing we learn as Members of Congress is do no harm. Why should we place ourselves in the position of choosing winners and losers in something as important as patent law, with the excuse that we have to harmonize and we have to adopt Asian and European standards of patent law? What is wrong with the American system? We are the innovators, we are the ones with the great minds. It is our system that is placed, in effect, in the entire world, all the products and the processes and the ideas that have made us free.

I would therefore ask the Members, even if you lean towards this bill, to vote against it as a matter of free speech principle. The American people are entitled to more debate, because they need to know more about this bill.

Mr. Chairman, while I was in the Rules Committee yesterday, the gentleman from California said with regard to the types of damages and the standard for damages that could be used that the judge would have the discretion to determine that.

Well, taking a look at the manager's amendment. That discretion has been taken away, and now there is a presumption in favor of the most onerous provision dealing with damages, and that really would impact the small inventor.

Let's take a look at what would happen with the majority's view on patent damage reform. The Wright brothers' airplane, here is the patent, I have got a picture of it right here.

The flying machine, if it had been patented today, or, no, if the rules that the majority is suggesting now were in effect at the time that the Wright brothers got their patent, the amount that they recovered would have been limited to the fractional value of the surface controls alone, that's it, even though everything else went on what was called an airplane, but the thing never flew.

That's what this does to innovation. If you want to get something for your trim tab and your ailerons and whatever else they put on an aircraft, that's fine.

But this is an example, nobody else in the entire debate has given one example except me. This is the only opportunity that the people opposed to this bill have had to talk about the actual impact of the law upon a factual situation.

I yield 20 seconds to the gentleman from California.

But under your manager's amendment, the judge would have to say that that does not apply.

Mr. Chairman, what is interesting about the amendment from the gentlewoman from Texas is the fact that she wants to have a study, and I agree with it, of patent damage awards from at least 1990 to the present case.

So this is very interesting because here we are about to do this massive change in law and no one has done the study. But now we are going to do the study after we have this massive change in law.

I'll tell you, this train just turned around with the caboose going forward. That is why this bill has to be ditched.

Madam Speaker, I rise today in opposition to H.R. 3221, New Direction for Energy Independence, National Security, and Consumer Protection Act, and H.R. 2776, Renewable Energy and Energy Conservation Tax Act. I am extremely saddened that these bills, which according to the Democrat Majority were meant to ``achieve energy independence, strengthen national security, grow our economy and create jobs, lower energy prices, and begin to address global warming,'' will in fact result in less domestic natural gas and oil production, higher taxes that are passed to consumers, and wasteful spending on duplicative government programs.

The northern Illinois Congressional district I am honored to represent has a significant manufacturing base. There are over 2,500 industries in the 16th District of Illinois. Because of this, I devote a considerable amount of my time working on manufacturing issues. I am a member of the Council on Competitiveness, a co-chair of the Manufacturing Caucus, and Chairman of the Republican Policy Committee Task Force on Manufacturing. As previous Chairman of the House Committee on Small Business, I held countless hearings on competitiveness. I travel this country and overseas studying machine tools, manufacturing efficiencies, global supply chains, manufacturing financing, intellectual property rights protection, export controls, and other important issues. I've also lectured extensively on America's need to be globally competitive. However, the devastating effect of the rising cost of natural gas to America's manufacturers, especially chemical, plastics, and advanced composites producers, is dramatic. Composite, chemical, and plastic manufacturers are more dependent on affordable and stable natural gas prices because they use natural gas as a base ``feed stock.'' Soaring natural gas prices have challenged their competitiveness. In 2004 alone, increases in natural gas prices forced the closure of scores of chemical companies and cost roughly 100,000 high-paying jobs.

In 2005, Congress passed an energy bill that resulted in an increase of an additional 18 percent capacity in domestic natural gas production. We are now contemplating legislation that will reduce incentives for domestic production and, if past is prologue, will likely lead to a decrease domestic output and an increase dependence on imports from foreign sources. According to the non-partisan Congressional Research Service (CRS), a similar tax on oil and natural gas producers lead to a decrease in domestic oil production by as much as 1.26 million barrels between 1980 and 1986 and may have led to roughly 13 percent more in imported natural gas and oil over the same time period.

We cannot afford to travel down this path again. The Department of Energy projects that the United States will use 28 percent more oil and 19 percent more natural gas in 2030 than was used in 2005. To meet this rising demand and wean ourselves from foreign oil and natural gas, we must reduce regulatory burdens,

invest in additional refining capacity, allow environmentally sound exploration, and support the development of alternative fuels. Unfortunately, the energy bills under consideration today do none of these things.

Instead, H.R. 2776 targets this vital sector of our economy with a $15.3 billion tax increase over ten years. It also decreases the competitiveness of U.S. firms in global markets by adding a $3.6 billion tax increase on international oil and gas production income. Finally, it terminates a Lower Manhattan development program that will allow New York to spend $2 billion in federal income taxes that were withheld on New York City and State employees for any transportation infrastructure project they see fit. I'm not quite certain why this provision is found in an energy bill.

To make matters worse, H.R. 3221 spends $18.7 billion over five years on many programs that have little or nothing to do with energy independence or reducing the rising cost of energy in America. H.R. 3221 contains extraneous provisions such as new antipoverty programs, a program that authorizes $1 billion for clean energy and efficient technologies in other countries, the creation of a brand new agency, and, my personal favorite, a section that will allow individuals to sue the federal government for damages caused by global warming. Unfortunately, I may have just described some of the less harmful provisions found in this bill because they only waste taxpayer's money.

When the bill attempts to address domestic energy production, it does this by slowing the oil shale and tar sands commercial leasing program, abrogating contracts that will force an extra $5.5 billion for gas and oil exploration in the Gulf of Mexico, and prohibiting access to 4.2 trillion cubic feet of natural gas found in the Roan Plateau in Colorado. These additional restrictions on domestic production will lead to a shortage of supply and drive the cost of energy up so that every home and every business will have to pay far more than they are currently paying now.

Between 1999 and 2003, the United States experienced nothing less than what many considered to be the demise of American manufacturing. Our manufacturing base is recovering significantly since those days due largely to increases in productivity. But manufacturers face new and severe threats to the viability of their businesses in the United States. They face unfair foreign competition from foreign countries that do not honor their trade agreements and unfairly manipulate their currency. They face rapidly rising costs of health care. They face the largest regulatory burdens in the world. They face staggering increases in their energy costs. Please do not provide another incentive to move U.S. manufacturing overseas by raising their energy bill.

I urge my colleagues to join the National Association of Manufacturers (NAM) by opposing H.R. 3221, New Direction for Energy Independence, National Security, and Consumer Protection Act and H.R. 2776, Renewable Energy and Energy Conservation Tax Act, to show your support for America's manufacturers.

May I ask how much time is remaining?

Mr. Speaker, I rise today in opposition of H.R. 1908. Mr. Michaud and I just came from the Rules Committee a few minutes ago, which is in the process of preparing the rule under which the bill would be brought to the floor tomorrow. And we showed up at the hearing, which was set for 3:00, found out that an 18-page manager's amendment had been filed at 2:47, and during the course of our testimony before the Rules Committee, another manager's amendment consisting of 18 pages was filed at 3:50 p.m. So the Rules Committee was taking a look at still further amendments to a bill, not even knowing what the final form of the bill would be at the time we were there to testify either in favor of it or against it.

Anytime you have a bill that presents a fundamental change in law, it should be a consensus bill; and there's a reason for that.

Why hurt anybody on something so basic and so important as a patent bill?

Why can't you protect the holders of patents, both large and small, the universities that have a stake in it, the labor unions whose people are employed by manufacturers who hold patents? Everybody really has the same stake here, and the stake is to have the United States be pre- eminent in research and engineering and to use the patent system as a means to further research and development and manufacturing in this country.

But this bill that's being presented has a very interesting split of people in favor and people against, and that's what's disconcerting about the entire bill.

In fact, the last patent bill that was passed and signed into law never even made its way to the Senate. We passed it here in the House, and it was tacked on to an omnibus appropriations bill. The Senate never even read it or considered it. It got tucked into a massive multi-, hundred-page bill. It's a good thing that we had come up with a good bill by the time it passed here.

And now we are hearing proponents of this bill say, just a second, we didn't use the subcommittee process to refine it, and we didn't use the committee process to refine it. This is a work in action that we continue to work on it as we go. And that's how we end up with bad law, when Members of Congress do not really have the opportunity to examine and to know what they're voting on.

And I don't know anything as complicated as patent law. I've been here several terms; so has Mr. Rohrabacher. I look at patent laws through the eyes of a piece of machinery. I've spent my life in Congress involved in manufacturing. I have one of the most industrialized congressional districts in the country. One out of four people is directly employed in manufacturing.

And I spend time on the floors, I've visited hundreds of factories in the United States, Europe, China, given speeches all over. I go to forums that deal with manufacturing processes and try to keep up on the latest in manufacturing so I can share those, not only with my constituents, but with my colleagues who are in Congress, on a bipartisan basis. In fact, we formed the Manufacturing Caucus for the purpose of making sure that the latest in manufacturing techniques is shared with Members so as to strengthen our manufacturing base to make us more competitive in this world.

But this bill's opposed by the National Association of Manufacturers. Those are large and small manufacturers, the little guys and the big guys. And the reason they're concerned is that the manufacturers are the ones that make things, make things with their hands. They make the exotic machines, and they're very much concerned about international piracy already going on and the fact that this will actually, this bill will actually lend itself to that.

And I met this morning with people from the pharmaceutical industry, the biotech industry, the food industry, people concerned that processes involved in food preparations would be protected. And it was the most incredible group of people that I've ever seen come together on an issue in opposition.

And one of the reasons that they're so opposed, and I'm just going to speak on one of those, it's on the damage issue, because there are so many other issues that are extremely important.

We just found out that the administration now opposes H.R. 1908 because, again, it limits the courts' discretion in determining the damages for infringement. Now, that's the damage issue. And I'm glad they came out with that, and that's important. And let's explain why.

H.R. 1908 will reduce the value of U.S. patents because patent holders will no longer be able to receive the fair market value of their patent when infringed upon. It mandates this apportionment of damages be the pre-eminent factor and exclusion of all the other market factors considered in infringement cases.

Current law, the law that's used today, states that juries should consider 15 factors, many of which are based on market forces and competitive pricing which allow the patent holder to receive the market value of the invention that was infringed upon. And that's always been the standard of damages. What is the value?

They'll take a look at its incorporation into the device. What value does it add to it? What price would the holder of the completed product have paid for this?

It has been established over a period of years of long series of judicial decisions, and it's not the legislature abandoning our role in this issue, but it's allowing the courts' working their way through technology changes to say these are the factors that we should take a look at.

The change of law requires a judge to determine the economic value of the invention by subtracting the value of prior art. That means subtracting the value of other existing components in the invention. And this complex economic analysis is not something we want to leave the district court judges. Even Judge Michael, chief judge of the U.S. Court of Appeals for the Federal Circuit, agrees.

But what's dangerous about this provision is that the bill allows a new set of damages, a new standard when it's never been tested. It's nothing more than a theory.

The purpose was to diminish the value of the patent holder whose patent had been infringed upon. That's the problem.

Will the gentleman yield?

Which means that you manufacture, then you worry about the legals. You manufacture and sell; then you worry about the legals, whether or not you have infringed upon somebody's patent.

And what this bill will do is this will encourage infringing because it greatly limits the damages to which the inventor would be entitled.

Will the gentleman yield?

I appreciate that. We were with a company called

QUALCOMM today, 11,000 employees. They are opposed to the bill. It's just an interesting mix. And it appears that a lot of the people in favor of the bill have been some of the biggest infringers, and that is why some have called this the ``Infringers' Bill of Rights.'' I don't know if I would go that far.

But I would like to just bring up one thing. The proponents of the bill are saying this is tort reform. And how could this be tort reform when the National Association of Manufacturers are on the other side, oppose it? It is not really tort reform. It is an all-out assault upon awarding reasonable damages to the inventor. That is done in two ways. One is through extreme limitation of damages, and the second is finding a way to lengthen the process of litigation.

Now, another portion of this bill says, well, you shouldn't be able to shop for venue. And in America it has always been the tradition that you can bring a suit in any area, any county, any State where damage has occurred, and with a widely distributed product, you should be able to bring a lawsuit really wherever you want. And now, of course, the proposed reform says, well, you can't bring it in certain areas unless you have a certain nexus.

Here's the problem: If you bring this in Chicago, the little guy, it's 5 years. If you bring it in Washington, D.C.'s ``rocket docket,'' it's called, you get it there in 1 year. Well, who is to gain by taking litigation and lengthening the time of it? It's the big guys versus the small guys. And if there had been a problem in these rocket dockets, and there are three or four across the country where you can move something fast, but if there had been a problem such as in Madison County, Illinois, which has been known for abuse of class action lawsuits, we would know it. But the judges in these rocket dockets willingly take the case because they have become experts on patent law. People trust their judgment, and they have come down in favor of the inventor as many times as they have come down opposed to the inventor.

Thank you for your leadership.

Mr. Chairman, title II of the Democrats' energy dependence bill seeks to reduce global climate change by spending $1.2 billion to increase Washington bureaucracy.

Instead of debating whether or not global warming exists and, if so, to what extent, we should all unite behind an effort to combat all forms of global pollution and promote the sale of U.S. environmental exports. Then we can spend more time and effort on cleaning up the environment rather than engaging in partisan disputes.

Nevertheless, as the senior Republican on the Global Environment Subcommittee, I believe this title is fatally flawed for three main reasons:

First, it combats air pollution, even though numerous reports and study show that conflict over access to clean water and contaminated food is just as important, if not more important, an immediate threat to the national and economic security. Therefore, we should expand the scope of it.

The U.N. Development Program's Human Development Report of 2006 states that there is a growing crisis with respect to clean water. This bill does not address it. And if it is not addressed as a priority issue, it will inherently lead to greater insecurity around the world.

Secondly, title II grows the size and scope of the Federal Government, adds more bureaucracies, more programs, more money.

Title II also creates five other new programs or initiatives such as the new International Exchange Program at a cost of over $1 billion.

Third, title II states that the U.S. should negotiate new binding greenhouse gas reduction commitments from all major emitting countries based on their level of development.

In 1997, the other body voted 95-0 against such a commitment because economic dynamos such as China, India, and Brazil were not included.

Title II also ignores all that our government is doing in the area of climate change, including spending $37 billion.

Mr. Speaker I reluctantly rise today in opposition to the America COMPETES Act of 2007, H.R. 2272. I am a firm supporter of education and innovation in the fields of science, technology, engineering and math. Unfortunately, I cannot endorse a bill that creates 40 new programs and spends tens of billions of dollars.

I devote a great amount of my time working on manufacturing issues. The congressional district I represent has over 2,500 industries. Manufacturing has several components, one of which is getting workers with adequate skills to be machinists, plus having an adequate supply of engineers and others involved in that aspect of manufacturing. At present I am involved in trying to solve workforce problems, which in turn, in many cases, depend upon people who have a good understanding of science, tech, engineering and math. I am a member of the Council on Competitiveness, a co-chair of the Manufacturing Caucus, and Chairman of the Republican Policy Committee Task Force on Manufacturing. As previous Chairman of the House Committee on Small Business, I held countless hearings on competitiveness. I travel this country and overseas studying machine tools, manufacturing efficiencies, global supply chains, manufacturing financing, IP protection, export controls, etc. I've also lectured extensively on America's need to be globally competitive.

In a good faith effort by both parties to make America more competitive, I believe we may be sliding a slope very few realize even exists. For example, this bill forgives student loans for individuals who teach math and science. While this is a noble idea, this sets the precedent for other vocations to receive loan forgiveness. When will we draw the line? Will we forgive loans for firefighters, policemen, federal government employees, doctors, and lawyers? Who decides which profession deserves preferential treatment? Extending the years of loan payment or perhaps reducing interest rates on critical professions in underserved areas may be a consideration, but loan forgiveness can put us on the road to ``free'' federal education for everybody. The price tag is unimaginable.

Furthermore, today's bill is a composite of five different bills which have already passed the House. Attaching these bills together is not prudent legislation because it forces a Member of Congress to vote for or against the entire package even though he may have been in favor of a more modest approach. For example, I voted in favor of the authorizations for the National Science Foundation (H.R. 1867) and the National Institute for Standards and Technology (H.R. 1868)--two agencies whose missions are vital to America's competitiveness. In addition, a third bill, H.R. 1068, updating research goals of the National High-Performance Computing Program, is also worthy

and actually passed on a voice vote. However, these three bills were combined with: H.R. 362, 10,000 Teachers, 10 Million Minds Science and Math Scholarship Act and H.R. 363, Sowing the Seeds through Science and Engineering Research Act. These two latter bills forced me to reluctantly vote against the whole package--especially since this combined bill contains $20.3 billion more than the five original bills and creates forty new science, tech, engineering and math (STEM) programs. I find this to be particularly wasteful when considering the fact that scores of current programs have not been found to be effective as evidenced in three separate studies by the Government Accountability Office (GAO), the US Department of Education (DOE), and the Office of Management and Budget (OMB).

The GAO in October, 2005, issued a report stating that in fiscal year 2004 there were over 207 different science, technology, engineering, and mathematics (STEM) programs spending approximately $2.8 billion annually spread throughout 13 agencies. Only half of the programs have been internally evaluated, with the reporting agencies stating the programs were effective and met established goals of attracting more students to study STEM courses, but, GAO added, ``some programs that have not been evaluated have operated for many years.'' These agencies made suggestions to GAO, but GAO concluded that before adopting any suggestions ``it is important to know the extent to which existing STEM education programs are appropriately targeted'' so as to make the best use of available federal resources. The purpose of GAO is to determine whether taxpayers' money is being spent wisely. GAO's language indicates there is no basis to make that conclusion because too many programs simply have never been evaluated for efficiency.

The second study--a Report of the Academic Competitiveness Council conducted by the U.S. Department of Education in May of 2007--showed 115 evaluations were submitted for 105 STEM programs and only ten evaluations were found to be ``scientifically rigorous.'' The report went on to say that, ``[b]ased on the 115 evaluations, the ACC's review that despite decades of significant federal investment in science and math education, there is a general dearth of evidence of effective practices and activities in STEM education (emphasis original).''

The third study was conducted by the OMB through a Program Assessment Rating Tool (PART) Analysis of 88 programs within the Department of Education and only four were proven to be effective. Among those programs whose results were not demonstrated was the Department of Education Mathematics and Science Partnership program. This program provides grants to state and local education agencies to improve student's academic achievement in math and sciences. The program was not found to be well managed, and it did not establish performance measures.

On the basis of the information provided by GAO, DOE, and OMB, I am surprised that we are considering the creation of 40 additional STEM programs. We should be evaluating and consolidating all existing STEM programs, and save money at the same time. Instead, the House of Representatives is adding more programs and spending tens of billions more.

While I continue to remain a firm supporter of U.S. industry and competitiveness, I believe that there are better ways to accomplish this than spending billions of dollars on new and unproven programs while hundreds of programs continue with little or no accountability. That is why I encourage my colleagues to vote for the Motion to Recommit, which still spends too much money, but as opposed to the combined bill reduces the overall spending of the combined bill by $20.3 billion.

Mr. Chairman, I offer an amendment.

Mr. Chairman, I ask unanimous consent to modify the amendment with the modification placed at the desk in order to make a technical correction.

Mr. Chairman, I rise in support of my amendment that will exempt the Environmental Quality Incentives Program, EQIP, from a $60,000 payment limitation that this bill proposes for conservation purposes.

This program provides farmers with financial and technical assistance to plan and implement soil and water conservation practices and has the full support of the environmental and farming community.

This amendment is more of a technical correction, as all it does is return the EQIP payment limitation to its current level of $450,000 over the life of the farm bill. The amendment does not

impact the increased payment limitation for direct payments. The amendment is narrowly tailored to only impact payments for EQIP- specific projects.

Currently, 60 percent of EQIP payments go to livestock producers, who use those cost-share payments to establish environmentally sound structures and practices on their farms. Without these payments, these structures and practices in many cases will not meet EPA standards for environmental care.

The problem with the proposed $60,000 limitation is that these EQIP programs are so expensive that the farmers, in many cases, probably in most cases in my district, won't choose to take it because of the cost.

To give you an example, we have two methane digesters in my congressional district. Each of them cost over a half a million dollars. The farmer could get up to 50 percent and sometimes even more of the costs of that from the present EQIP program, but under the proposed law, he could only get $60,000.

When I was in private practice, I practiced agricultural law and had to work with farmers to come into compliance with the EPA; and even though EQIP was not around at that time, the remedial measures that we took for runoff, et cetera, to be in compliance with EPA in many cases ran into the several hundred thousand dollars.

This is what I'm hearing from the constituents that I represent, that they respect the fact that EQIP is there, but $60,000 simply would not go long enough or far enough.

So our proposal is to return it to its present standard. It spends no more money. It makes money available to build these expensive facilities.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, in answer to the question of the gentleman from Minnesota, conservation is different from trying to meet an EPA mandate. You can do a tremendous amount of conservation programs for $60,000, but EQIP programs, by their very nature, cost in the hundreds of thousands of dollars. That's the problem.

The problem that we have here is that the $60,000 limitation goes into effect. Money may not be available for farmers to be able to meet environmental standards. So this really is a pro-environmental vote. I don't really want to talk about geese. I am talking about cattle. But this all applies to chicken farms and the tremendous runoff that we have.

By allowing this amendment and removing the $60,000 cap, this will increase the number of environmentally protected areas in farming across the country. That's the reason for it. It costs no more money, and you might want to spread these programs across the board. I can understand that on conservation, but not on these mandated programs that are title II.

Mr. Chairman, I reserve the balance of my time.

The problem is that the EQIP program is already being doubled in the amount from $1 to $2 billion, where the caps are being lowered to $60,000. This is not a conservation.

The purpose of this is so that cow manure and pig manure and chicken manure don't flow into the rivers and the streams. That's the problem with the Chesapeake. It's the chicken manure that's destroying the Chesapeake.

When you have the EQIP cap, that means less chicken producers will be able to afford retention systems in order to comply with EPA. So this is a pro-environmental vote, and there is plenty of money because the chairman recognizes the fact that the total amount has been doubled.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, the payment limitations of the farm bill go from $2 million to $1 million. Under the EQIP programs it goes from $450,000 down to $60,000. This is not for wealthy farmers. This is not for factory farms. These are for the little guys that I represented when I practiced law in Ogle County, Illinois, for 22 years.

If we had a program like this, the money would have gone a long way. But even with a modest herd of 300 head, it costs several hundred thousand to build a retention system or a methane digest, if you want to go into doing that. Our methane digesters in our district, the one that has 500 dairy cattle, they are able to run a city of 500 people, of 500 homes; thus, it conserves electricity from the nuclear plant and also from coal-burning facilities. The problem is getting onto the grid and getting a reasonable price.

I was a chairman of the Small Business Committee. When I practiced law, the guys that use this, these are all little guys around me. We don't have people with thousands and thousands of cattle in northern Illinois. So I would suggest that for the small business farmer, to make this program go even further, that we should allow this amendment.

Madam Speaker, parliamentary inquiry.

Is it appropriate at this time to ask for a re-vote on each and every amendment just voted on?

Thank you.

Mr. Speaker, I want to thank the Rules Committee for allowing debate on the Manzullo amendment to help the EQIP program. However, I'm deeply concerned about the Democrats' attempt to pit people who work for manufacturers against agriculture by a midnight tax increase against manufacturing workers.

The offset to pay for part of the farm bill would strongly discourage future foreign investment in the United States.

Nissan USA, owned by Nissan based in Japan, borrows money from their finance unit based in the Netherlands. Under our current tax treaty with the Netherlands, no tax is applied. However, under the Doggett amendment, a new 10 percent tax would be applied to this transaction, and the Netherlands would then most likely view this as an abrogation of our tax treaty and seek renegotiation or outright annulment,

thus hurting our overall trade with the Netherlands.

In the northern Illinois district that I represent, the one which led the Nation in unemployment in 1980 at 25 percent, 14,000 manufacturing workers lost their jobs, 200 companies closed up. I just lost another one yesterday. Nissan Forklift in Marengo, Illinois, would be hit with a 10 percent increase. They're not based in Bermuda.

These are common American people, the ones who get up at the crack of dawn. They represent the manufacturing people of this country, and the Democrats are hurting them.

Don't hurt my workers. Don't raise taxes on a bill you have had no hearings on because you don't know. You have to examine what it does to the everyday worker. The Japanese, the English, the Italians, the Swedes, the Germans have all saved manufacturing jobs in my congressional district. I know what I'm talking about.

Vote against this rule. Vote against this bill. Vote for the American worker, who is glad to have his job because somebody came in and invested the money in American manufacturing.

Don't lay off American manufacturers because of a bill that you haven't even researched.

Offered By: Mr. Manzullo

Amendment No. 1: Strike page 266, line 23, through page

267, line 10, and insert the following:

``(a) Payments for Conservation Practices.--The total

amount of payments that a person or a legal entity (except a

joint venture or a general partnership) may receive, directly

or indirectly, in any fiscal year shall not exceed--

``(1) $60,000 from any single program under this title

(other than the environmental quality incentives program) or

as agricultural management assistance under section 524(b) of

the Federal Crop Insurance Act (7 U.S.C. 524(b));

``(2) $125,000 from more than one program under this title

(other than the environmental quality incentives program) or

as agricultural management assistance under section 524(b) of

the Federal Crop Insurance Act; or

``(3) $450,000 from the environmental quality incentives

program.

Mr. Speaker, it's a privilege and honor for me to be closely associated again with the effort to reauthorize the Overseas Private Investment Corporation. Along with now Senator Bob Menendez, former OPIC President George Munoz, and me--the 3Ms--we were able to rescue OPIC from oblivion with a resounding vote of confidence of 357 to 71 to reauthorize OPIC in 1999. OPIC represents the best of both worlds--the agency doesn't cost the U.S. taxpayer any money and it creates jobs and aids in economic development both here and abroad as evidenced by the Congressional findings section in this bill.

I also want to commend Mr. Sherman for working with the minority in a bipartisan way in order to produce a bill that can receive overwhelming support. The bill before us today wouldn't be the one I would have written from scratch. However, I am pleased that as the bill has moved through the legislation process, the majority has been sensitive to the concern as to the practical effects of certain provisions in order to insure that OPIC can remain open for business in various markets. I also appreciate the willingness of the majority to continue to keep the lines of communication open.

I also want to commend Mr. Sherman for including my suggestion in Section 17 to make sure that OPIC will always continue to have sufficient staff and resources to support small businesses. I also want to thank the majority for their willingness to add in report language a statement that the climate change initiative in Section 8 should not take away from other environmental remediation efforts by OPIC.

Madam Chairman, will the gentleman yield?

I take personal offense to that. That's the name of the museum. Burpee was the name of an inventor of seeds.

And after him. You should apologize. I accept your apology.

Madam Chairman, this is a very immodest request that's part of an overall strategy to revitalize an economically depressed area of downtown Rockford.

The City of Rockford led the Nation in unemployment in 1980 at 25 percent. We lost 14,000 highly skilled manufacturing jobs at many of our over 1,500 factories in the area.

What this money does, it sets up a paleontology lab, which is an extension of Northern Illinois University, into the Burpee Museum of Natural History itself. This is astonishing because what it is doing, it's moving many of the assets of this great university to a city 30 miles away, and the reason that that lab has been created in Rockford is because of the incredible finds that were made by the university in terms of the paleontologist digs several years ago in Montana with regard to dinosaur projects.

There are currently eight Northern Illinois University faculty and 13 graduate and undergraduate students working on various cutting-edge physical science projects at the Burpee Museum. Thus, the request is ready to be used to support these research projects by Northern Illinois University students and staff utilizing the laboratories at Burpee Museum in Rockford.

With this assistance, Burpee Museum is becoming one of the foremost places in the world to study and view paleontology. What we lost with our manufacturing base we're trying to compensate for in an educational center and people coming to town in order to tour this great center. In fact, tourism is up by 7 percent as a result of the paleontology digs by the museum.

Besides that, the Institute of Museum and Library Services would receive this money, but there is no way to get it through the regular budget. The rules and regulations simply do not allow this type of project to be funded by it.

The Burpee Museum is a center for study. Students are coming from around the world. In fact, recently Burpee and Northern Illinois University co-hosted a scientific symposium. Almost 200 scientists from around the country and from China, Norway and Canada attended this important scientific meeting in Rockford.

I spend, probably, 75 percent of my time working on manufacturing issues. I was born and raised in Rockford. This was a city that refused to die. This was a city that refused to give up. This is a city whose citizens came together and said we have lost so many manufacturing jobs, but we're going to find another way to keep our kids in town to allow them to have jobs there so parents can see their grandkids, and unlike many Midwest towns that gave up, kids just leave the area because of no opportunities. What we're doing here is the creation of this wonderful laboratory to study paleontology to help put Rockford back on the map again.

I believe that this is extremely fair.

Madam Chairman, I reserve the balance of my time.

Madam Chairman, the Institute of Museum and Library Services does not offer grants for conservation efforts such as what is going on at the museum. It's simply not available, and the issue is, do unelected bureaucrats who answer to no one in this city make all the decisions as to where the money is spent or do Members of Congress who are responsible to our electorate every 2 years have the ability to come in and say this is something worthy of the money that's going to be spent anyway. Because the Flake amendment does not save money. It just puts more money back into the hands of the bureaucrats to spend wherever they should.

So I would obviously oppose this amendment, and I would encourage my colleagues also to vote ``no'' on the Flake amendment to strike these funds.

Madam Chairman, I yield back the balance of my time.

Madam Speaker, I rise in support of S. 966, which gives the Department of State the authority to re-hire Foreign Service retirees without harming their pensions through October 1, 2010 to temporarily increase more personnel to reduce the backlog on passport applications. S. 966 has already passed the Senate and it is time to send this bill on its way to the President's desk for his signature. I appreciate the expeditious consideration of this legislation to give the State Department another tool to help them deal with the massive increase in the number of passport applications.

I hate to say ``I told you so'' but in 2005 I predicted this train wreck. When I chaired the Small Business Committee, I held a hearing on the Western Hemisphere Travel Initiative (WHTI) in 2005 primarily to examine the effect of WHTI on small business. At the time, I said that because of the amount of commerce within the Western Hemisphere it ``may make it next to impossible to fulfill the statutory mandate to require this enhanced documentation.''

I recognize that Congress gave the Departments of State and Homeland Security a difficult mission to implement within a short time period. I was one of the 75 Members to vote against the Intelligence Reform and Terrorism Prevention Act of 2004 that contained the WHTI mandate.

However, since WHTI was implemented on January 23, my office has been inundated with frantic calls from constituents seeking passports to travel overseas. So far this year, my office has assisted 491 individuals with problems in obtaining their passports for travel. For all of 2006, my office helped just 51 constituents with passport problems. These calls are dominating the time of the caseworkers in my district offices.

Although we have been 99 percent successful in getting people the passports they need to travel, it has not been easy. Our caseworkers spend countless hours on the phone each day with panicked constituents who face the prospect of losing thousands of dollars and missing out on dream vacations if we cannot help them. And it seems we are always in crisis mode. Many passports do not get issued until two to three days before departure, and that is done with a continual push from my staff.

Despite constant monitoring and advocacy by my staff, some constituents do not receive their passports within 48 hours of departure. The last resort for these constituents is to take a day off work and travel to downtown Chicago--about two hours away--to get their passports on an emergency basis. I am told that although these constituents arrive before the required 7:00 a.m. opening time, it generally takes all day to get their passports.

Madam Speaker, you might not feel as bad if these were people who did not follow the rules and who waited until the last minute to get their passports. But a vast majority of the people who seek our assistance have done everything our Government asked of them. They applied for their passports well within the allotted time to receive their passports on time for their departures. And yet, their vacations and thousands of dollars of investments are in jeopardy.

I applaud the State Department and DHS for trying to ease the situation last month when they agreed to allow people traveling to Mexico, Canada or the Caribbean to depart as long as they had receipts in hand showing they had applied for their U.S. passports. But problems still occur. Some have applied, but

the State Department website indicates their applications cannot be found and thus a receipt cannot be secured. In addition, some of the cruise lines in the Caribbean do not accept these receipts. This situation causes even more anxiety for my constituents.

I understand the goal of the WHTI, but its implementation has been difficult. It has caused unnecessary anxiety and enormous amounts of work for my constituents and my staff. We must come up with an alternative way to enhance our security or make severe adjustments in the way we manage WHTI so we don't leave high and dry the people who followed the rules to get their passports.

That is why I applaud the prompt scheduling of S. 966 so shortly after the Senate passed the bill at the end of last month. I urge my colleagues to pass S. 966 so that the bill can be signed into law by the President as soon as possible.