House extends small business investment act

The U.S. House of Representatives extended the Small Business Innovation Research (SBIR) Program and the Small Business Technology Transfer (STTR) Program on April 23. The bill—H.R. 5819—origniated in the House Small Business Committee.

The two programs provide more than $2.3 billion annually to small businesses engaged in scientific and technical research. The SBIR provides funds to companies working on projects aligned with the missions of 11 federal agencies including the Department of Energy, Department of Traffic and the National Science Foundation. The STTR is dedicated to companies working cooperatively with universities or nonprofit research institutions. According to the House Science Committee Subcommittee on Technology and Innovation—which shares jurisdiction for the programs with the Small Business Committee—it is the largest source of federal funding for private-sector technological innovation.

The legislation that passed included many provisions from a similar bill introduced last week by Rep. David Wu (D-Ore.) who chairs the Subcommittee on Technology and Innovation. He said the programs—which have been in place for more than 20 years—are sorely in need of updating to keep U.S. companies competitive and the nation’s technology innovation efforts moving forward.

If passed by the Senate, the bill would increase the amount of money available to companies by doubling the maximum award levels for Phase I investments to $300,000 and raising the ceiling on Phase II investments from $750,000 to $2.2 million. The bill also clarifies that companies that receive backing from venture capital firms are eligible for funds. It also extends the programs through the end of 2010, which will put them on the same re-authorization schedule and give Congress time to study their effectiveness. An included amendment directs agencies to give applications from rural companies priority consideration for funds.  An attempt to require federal agencies with research funds in their budgets to direct at least 3 percent of that money to SBIR programs and 0.6 percent to STTR programs failed to make it into the final bill.

Examples of past SBIR and STTR awards include almost $100,000 in 2006 to California-based Nanosolar for research into low-cost printing on thin film of photovoltaic cells and almost $850,000 over two years to Oregon-based Peregine Power to evaluate and study direct-drive generators for use in wave-energy applications. The bill passed the House 368-43. It now moves to the Senate.

Corrections added April 25, 2008.