Technology and Innovation Subcommittee Markup -- H.R. 5789

Opening Statement By Rep. David Wu

I want to welcome everyone to the subcommittee markup of H.R. 5789, the Science & Technology Innovation Act. This bill reauthorizes two programs critical to the competitiveness of the U.S., the Small Business Innovative Research Program (SBIR) and the Small Business Technology Transfer Research Program (STTR).

Our committee has been working on this bill for some time, and I want to thank my Ranking Member Dr. Gingrey and all the members of the committee for continuing our work in crafting legislation that supports innovation.

In today’s economy, small business is where innovation happens. The Science & Technology Committee, especially the Technology and Innovation Subcommittee, intends to promote science and technology research that drives an innovation-based economy.

SBIR and STTR are key components of our innovation agenda. At more than $2.3 billion per year, SBIR and STTR comprise the largest source of federal support for technological innovation in the private sector. These funds help companies with innovative ideas bring their products to market.

However, these programs originated more than 20 years ago. Much has changed since then; these programs need to be restructured to reflect the current global innovation environment.

The Technology and Innovation Subcommittee held hearings last year on the SBIR and STTR programs to analyze their place in an innovation agenda for the 21^st century. Our witnesses made many suggestions on how the SBIR and STTR programs could be strengthened.

During hearings for the reauthorization of the National Nanotechnology Initiative (NNI), witnesses said that programs like SBIR and STTR are necessary if the U.S. is going to capture the economic benefits of our federal investment in nanotechnology research.

Outside groups agree—SBIR and STTR are important to commercializing products that begin with investments in basic research.

Members of this committee agree on the importance of our high-tech entrepreneurial companies in creating new technologies. These are exactly the companies targeted by SBIR. STTR links those small high-tech companies with our universities, which are a key cradle of new high-tech ideas.

Based upon this subcommittee’s hearings H.R. 5798 does the following:

1. Reauthorizes the SBIR & STTR programs thru 2010. This will put both programs on the same reauthorization cycle. In addition, the authorization time frame will give Congress time to examine how well both programs are working to better focus on innovation.
   
   
2. For any federal agency which spends more than $100 million in intra- or extra-mural research per year, the set aside increases to 3.0 percent for SBIR and to 0.6 percent for STTR. This emphasizes the importance we place upon SBIR and STTR as part of the innovation agenda.
   
   
3. Increases the Phase I awards from $100,000 to $300,000 and Phase II awards from $750,000 to $2.2 million to better reflect the actual costs of doing high-tech research;
   
   
4. Increases the flexibility of the SBIR program by allowing cross-agency awards and allowing applicants to apply directly for Phase II funding;
   
   
5. Allows venture capital-backed small businesses to apply for awards and defines eligibility requirements;
   
   
6. Expands requirements on agency databases of award recipients. This section also requires interoperability and accessibility between agency databases. This will allow for improved oversight by Congress on how agencies actually operate SBIR programs.
   
   
7. Establishes an Interagency Committee co-chaired by the Director of OSTP and the Director of NIST to report to Congress on the best practices for commercialization of SBIR- and STTR-funded research.
   

In closing, this subcommittee has been a leader in passing legislation that advances our innovation agenda. Today we continue our leadership by reauthorizing SBIR and STTR. I urge my colleagues to support this bill.

Reported, as amended