WASHINGTON—Today the Senate Committee on Small Business and Entrepreneurship unanimously passed legislation that would reauthorize two important small business research programs. The bipartisan bill is the result of months of deliberations among Committee members and includes a compromise on the issue of firms majority owned and controlled by multiple venture capital companies in the Small Business Innovation Research (SBIR) program, among other provisions.

“This bill ensures that Massachusetts small businesses will continue to have access to the resources they need to help keep our country on the cutting edge of innovation,” said Senator Kerry, Chairman of the Committee on Small Business and Entrepreneurship. “I am proud of the fact that Massachusetts is second in the nation in receiving awards under these small business technology programs, and I am glad that we’ve been able to address concerns of the small business community and of my colleagues in the House and Senate in moving this legislation forward. We need to make sure that these programs do not lapse so that small, high-tech firms from Springfield to Newburyport can continue to utilize them to develop technologies to keep our military strong, advance medical breakthroughs, and develop energy sources that are renewable and clean.”

Federal agencies with an annual extramural research and development budget of over $100 million are required to allocate 2.5 percent of their extramural R&D dollars to the SBIR program. Currently, eleven agencies have SBIR programs. Since its inception in 1982, the SBIR program has been a resounding success, garnering high praise from the National Academy of Sciences in a recent comprehensive report. In 2006, Massachusetts small businesses received over $150 million in SBIR and STTR awards.

Specifically, the bill passed today out of Committee:

• Reauthorizes the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for 14 years, making the new sunset dates September 30, 2022, and September 30, 2023, respectively.
• Includes a compromise on the issue of the participation of companies majority owned and controlled by multiple venture capital companies in the SBIR program, allowing NIH to award up to 18 percent of its SBIR dollars to companies majority owned and controlled by multiple VCs and the other ten SBIR agencies to award up to 8 percent of their SBIR dollars to this class of firms. The affiliation rule and the 500 employee standard remain unchanged in this bill.
• Increases the SBIR allocation from 2.5 percent of SBIR agencies’ extramural research and development budgets to 3.5 percent over the course of 10 years, 0.1 percent per year, for all SBIR agencies except for the Department of Health and Human Services, home to the National Institutes of Health.
• Doubles the STTR allocation from 0.3 percent of STTR agencies’ extramural research and development budgets to 0.6 percent, over the course of 6 years, for all STTR agencies.
• Increases the award size guidelines for the SBIR and STTR programs from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II. This is in line with the recommendation of the National Academy of Sciences.
• Attempts to increase geographic participation, particularly in rural states, by reauthorizing through 2014 and enhancing the Federal and State Technology Partnership (FAST) program and the Rural Outreach Program.
• Calls for better and streamlined data collection and assessment.
• Includes protections to address jumbo awards.


###