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April 16, 2008

Subcommittee Approves Bill To Support Innovative Technology Development

(Washington, DC) – Today, the U.S. House Committee on Science and Technology’s Subcommittee on Technology and Innovation passed legislation that supports the development of innovative technologies by small high-tech companies.

Subcommittee Chairman David Wu (D-OR) introduced H.R. 5789, the Science and Technology Innovation Act of 2008, to reauthorize the Small Business Innovation Research (SBIR) program and the Small Business Technology Transfer Research (STTR) program. 

SBIR and STTR comprise the largest source of federal support for private-sector technological innovation, providing over $2.3 billion annually to small, high-tech entrepreneurial companies that are creating revolutionary new technologies.

“These two programs are critical to the competitiveness of the U.S.,” said Wu.  “In today’s economy, small businesses are where innovation happens.  This subcommittee intends to promote the science and technology research that drives an innovation-based economy.”

SBIR provides funds to small high-tech firms conducting innovative research that is relevant to federal agencies’ missions and may have significant commercialization potential.  STTR provides similar funding for small businesses that are working cooperatively with universities or nonprofit research institutions.

“SBIR and STTR are key components of our innovation agenda,” Wu said.  “For more than 20 years, these programs have helped companies with innovative ideas bring their products to market.  However, much has changed in recent decades, and 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 21st century.  Witnesses suggested ways that the programs could be strengthened to operate more successfully in today’s innovation economy.

Based upon this subcommittee’s hearings, H.R. 5798 includes the following provisions:

  1. Reauthorizes the SBIR and STTR programs through 2010, putting both programs on the same reauthorization cycle and giving Congress time to examine how well both programs are working;

  2. Increases the SBIR set-aside to 3.0 percent and the STTR set-aside to 0.6 percent for any federal agency that spends more than $100 million in intra- or extra-mural research per year;

  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 small businesses backed by venture capital to apply for awards, and defines eligibility requirements;

  6. Expands requirements for agency databases of award recipients and requires interoperability and accessibility between databases to allow for improved oversight by Congress;

  7. Allows no more than 3.0 percent of program funds to be used for administrative costs, which will encourage agencies to more carefully administer the program because they will no longer have to pay for SBIR administration by taking funds from other areas; and;

  8. Establishes an Interagency Committee, co-chaired by the director of the Office of Science and Technology Policy and the director of the National Institute of Standards and Technology, to report to Congress on the best practices for commercialization of SBIR- and STTR-funded research.

“This legislation demonstrates Congress’ commitment to promoting the fundamental science and technology components that drive the development of new technology,” said Wu.  “This subcommittee has been a leader in advancing our innovation agenda, and we have continued that leadership today by reauthorizing SBIR and STTR.”

The Small Business Committee is scheduled to markup similar legislation tomorrow, Thursday, April 17, 2008.

The text of amendments to this bills and further information regarding this markup can be found on our website at www.house.gov/science.

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