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Senate Committee Approves 14-Year Extension for SBIR/STTR Program

NEW YORK (GenomeWeb News) – A US Senate committee today unanimously passed a bill that would extend by 14 years two federal programs that provide research funding for small businesses.
 
The bill, the SBIR/STTR Reauthorization Act of 2008 (S. 3362), will now move to the full Senate after the Senate Committee on Small Business and Entrepreneurship passed it earlier today.
 
The Small Business Innovation Research and the Small Business Technology Transfer programs, which were instituted in 1982 and are scheduled to “sunset” in September, would be extended under the bill through 2022 and 2023, respectively.
 
The House of Representatives passed a version of the bill (H.R. 5819) in late April. Since then, the Senate committee has been working on a compromise regarding the eligibility of small businesses that are majority-owned by venture capital firms.
 
The Senate committee agreed on a compromise that allows the National Institutes of Health to award up to 18 percent of its SBIR funds to these VC-backed companies, and the other 10 SBIR agencies to award up to 8 percent of their SBIR funds to these firms.
 
The bill has retained language from the House version (H.R. 5819) that excluded businesses with over 500 employees from the SBIR/STTR program.
 
“We’ve worked to address many of the concerns of the small business community and of my colleagues in the House and Senate, and this bill would keep these programs going strong,” committee Chairman Senator John Kerry (D – Mass.) said in a statement. Kerry is a co-sponsor of the bill.
 
The National Small Business Association said in a statement today that although the compromise is “not ideal for the small-business community,” the Senate bill improves upon the House version, which “would have allowed unfettered SBIR access to VC-controlled firms.”
 
The Senate bill would raise SBIR and STTR award sizes from their current level of $100,000 for Phase I grants and $750,000 for Phase II grants to $150,000 and $1 million, respectively. This is also a departure from the House bill, which called for $300,000 for Phase I grants and $2.2 million for Phase II awards.
 
Federal agencies having an extramural yearly budget over $100 million will continue to be required to allocate 2.5 percent of their extramural research and development funds to the SBIR program under the legislation.
 
The committee said today that approximately one out of four projects that are funded by the SBIR program result in new commercial products or processes.
 
“By increasing the percentage of Federal research and development dollars these crucial programs receive, we will pump another $1 billion into our small business economy,” said Senator Olympia Snowe (R – Me.), a ranking member on the committee and a co-sponsor of the bill.
 
The bill will now wait for review by the full Senate, and if it passes there it would be returned to the House where the changes would be considered.

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