While carried interest and financial reform have been our primary focus at NVCA these days, there are numerous pieces of legislation that we have been working on that remained outstanding as Congress recessed for elections. Here is an overview and what to expect when they return:
Small Business Innovative Research (SBIR) Grants
The Senate and House both passed legislation to reauthorize the SBIR program and make changes to the eligibility rules so that venture-backed companies could qualify for these grants. The NVCA supported the House bill as it allowed majority venture-backed companies to participate in the program and clarified the affiliation rules whereas the Senate fell short of that. Unfortunately, both houses have been unsuccessful in reaching a compromise. As a result, Congress passed several three-month extensions to keep the program running.
With little expected to be completed during the lame duck session, Congress will have to start the legislative progress from scratch in the 112th Congress. There is the chance that the SBA could decide to make eligibility changes through the proposed rule making process, but that scenario is not probable. So once again we have to be patient and wait to see what develops.
Despite the progress Senator Leahy made reaching a compromise on the two most controversial issues in the patent reform debate (damages and the post grant review process), it appears that S. 515 will be left behind in the 111th Congress. Senator Leahy and the 25 other Senators will put pressure on Senator Reid to bring S. 515 to a floor vote in the lame duck session but will likely be unsuccessful as there are still several Senators that have concerns about S. 515.
The House has not taken any major action on the Leahy compromise, as members there do not support S. 515, including the compromise on damages and post grant review. Given these challenges, it is unclear if Senator Leahy will have the appetite to push overall patent reform in the next Congress. Thus, most political insiders believe that comprehensive patent reform is off the radar screen for a while.
There seems to be very little appetite and certainly even less time remaining in the 111th Congress to address comprehensive immigration reform. Congress and the Administration are unwilling to separate legal immigration from illegal immigration reform, which makes our position more difficult. There was a push in February 2010 to move the Start-Up Visa/Founder Visa issue when Senators John Kerry and Richard Lugar introduced their Start-Up visa bill. Then in early March, Rep. Jared Polis hosted several VCs and entrepreneurs at a Congressional briefing on the start-up visa. The matter received widespread support from the VC community, but unfortunately, has not seen any legislative action since then.
In late September, Sens. Robert Menendez and Patrick Leahy introduced comprehensive legislation to overhaul the nation's immigration laws. The bill was largely viewed as a placeholder to help spur consideration of an overhaul of immigration laws and policy when the new Congress convenes in January.
With climate change legislation failing to pass in the 111th Congress, both Democrats and Republicans agree that this effort is off the table for the foreseeable future. Energy and Natural Resources Chairman Bingaman has publicly asserted that it will be at least 2 years, if not more, before any bills have the opportunity to be considered, regardless of how the elections turn out. With the Republicans gaining additional seats in the House, passage of energy reform dims considerably. With likely Republican gains in the Senate, climate legislation there will also become increasingly difficult.
In absence of federal climate change legislation, it will be important to watch the California Prop 23 ballot which proposes to repeal AB 32. This ballot initiative will be a bellwether for the future of climate change legislation in the country. NVCA is supporting “Vote No on Prop 23” and is closely monitoring this situation.
During the lame duck session, there may be some attempt by Majority Leader Reid to get a smaller energy-only bill passed. This would be the BP oil spill bill that he tried to pass a few weeks ago. Alternatively, there may be an attempt to pass a Renewable Electricity Standard (RES). NVCA has been lobbying the White House to make sure that if there is an energy bill considered during the lame duck session the RES, the establishment of a Clean Energy Deployment Administration (CEDA), and changes to the DOE Loan Guarantee Program should be included in that effort.
These issues as well as carried interest will be tracked and developments will be posted here at NVCAccess when Congress returns in November.