[Congressional Record Volume 147, Number 63 (Wednesday, May 9, 2001)]
[Senate]
[Pages S4582-S4584]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      RECOGNIZING THE IMPORTANT ROLE PLAYED BY THE SMALL BUSINESS 
                             ADMINISTRATION

  Mr. ENSIGN. Mr. President, I ask unanimous consent that the Senate 
proceed to the immediate consideration of S. Res. 86, submitted earlier 
by Senator Bond for himself and others.
  The PRESIDING OFFICER. The clerk will report the resolution by title.
  The legislative clerk read as follows:

       A resolution (S. Res. 86) to express the sense of the 
     Senate recognizing the important role played by the Small 
     Business Administration on behalf of the United States small 
     business community.

  There being no objection, the Senate proceeded to consider the 
resolution.
  Mr. BOND. Mr. President, as has been the tradition for the past 38 
years, the President of the United States has issued a proclamation 
calling for the celebration of Small Business Week. Today, we are in 
the middle of Small Business Week 2001, which is being sponsored by the 
Small Business Administration. The purpose of this week's celebration 
is to honor over 25 million businesses that make up the U.S. small 
business community. It is very appropriate for us, today, to recognize 
the importance of America's small businesses, and the significant role 
played by the Small Business Administration, SBA, in our Nation's 
economic growth.
  Congress established the SBA in 1953 to provide financial and 
management assistance to start-up and growing small businesses. Over 
the past 48 years, the success of SBA in meeting its missions is 
legend. It maintains a portfolio of guaranteed small business loans and 
disaster loans totaling more than $45 billion. And the Agency has 
guaranteed another $13 billion in venture capital investments to small 
businesses. To compliment it successful credit programs, the SBA's 
management assistance programs were delivered to more than one million 
small businesses during the past fiscal year.
  Over the past decade of record economic growth and prosperity, U.S. 
small businesses have been the engine driving our economy. More than 
99% of all employers in the United States are small businesses, 
providing nearly 75% of the net new jobs added to our workforce. Small 
businesses have proven, year-in and year-out, that they are a potent 
force in the economy, accounting for 51% of the private sector output. 
And their sights are not set just at home; leading the way toward a 
global economy, the small business community represents 96% of all U.S. 
exporters.
  Over the past 6 years I have been the chairman of the Committee on 
Small Business, and I have witnessed the enormous potential of 
America's small businesses at work. They are flexible; they are 
creative; they give us jobs; they provide economic growth; and most 
importantly, they provide hope and a future for millions of families 
and communities across our great nation.
  The resolution now before the Senate recognizes the critical role 
played by small businesses and the Small Business Administration in 
this business community. It is appropriate that we take a moment from 
our hectic lives to acknowledge the success of small businesses and to 
encourage our federal government to continue to provide its help to 
insure future successes.
  I urge each of my colleagues to vote for the Small Business 
resolution as a way to thank the SBA and the small business community 
for its contributions to our Nation.
  Mr. KERRY. Mr. President, this legislation reauthorizes the Small 
Business Administration's Small Business Technology Transfer Program. 
The STTR program funds cooperative R&D projects between small companies 
and research institutions as an incentive to advance the nation's 
technological progress. For those of us who were here when Congress 
created this program in 1992, we will remember that we were looking for 
ways to move research from the laboratories to market. What could we do 
to keep promising research from stagnating in Federal labs and research 
universities? Our research in this country is world renowned, so it 
wasn't a question of good science and engineering. We, without a doubt, 
have one of the finest university systems in the world, and we have 
outstanding research institutions. What we needed was more development, 
development of innovative technology. We needed a system that would 
take this research and find ways it could be applied to everyday life 
and national priorities. One such company is Sterling Semiconductor. 
Sterling, in conjunction with the University of Colorado, has developed 
silicon carbide wafers for use in semiconductors that can withstand 
extreme temperatures and conditions. In addition to defense 
applications, these wafers can be used for everything from traffic 
lights to automobile dashboards and communications equipment.
  With technology transfer, it was not just the issue of the tenured 
professor who risked security if he or she left to try and 
commercialize their research; it was also an issue of creating 
businesses and jobs that maximized the contributions of our scientists 
and engineers once they graduated. There simply weren't enough 
opportunities at universities and labs for these bright individuals to 
do research and development. The answer was to encourage the creation 
of small businesses dedicated

[[Page S4583]]

to research, its development, and ultimately moving that research out 
of the lab and finding a commercial application.
  We knew that the SBA's existing Small Business Innovation Research 
(SBIR) program had proven to be extremely successful over the previous 
ten years, so we established what is now known as the Small Business 
Technology Transfer program. The STTR program complements the SBIR 
program. Whereas the SBIR program funds R&D projects at small 
companies, STTR funds cooperative R&D projects between a small company 
and a research institution, such as a university or Federally funded 
R&D lab. The STTR program fosters development and commercialization of 
ideas that either originate at a research institution or require 
significant research institution involvement, such as expertise or 
facilities, for their successful development.
  This has been a very successful program. One company, Cambridge 
Research Instruments of Woburn, Massachusetts, has been working on an 
STTR project with the Marine Biological Lab in Woods Hole. They have 
developed a liquid crystal-based polarized light microscope for 
structural imaging. While that is a mouthful, I'm told that it helps in 
manufacturing flat screen computer monitors, and even helps improve the 
in vitro fertilization procedure. Together this company and the lab 
expect to have sales in excess of $1 million dollars next year from 
this STTR project.
  As this example illustrates, the STTR program serves an important 
purpose for this country's research and development, our small 
businesses, our economy, and our nation. The program is set to expire 
at midnight on Sunday, September 30th. By the way, we absolutely have 
no intention of letting reauthorization get down to the wire, which was 
the unfortunate fate of the reauthorization of the SBIR program last 
year. I have worked in partnership with Senator Bond to develop this 
legislation, and as part of the process we have consulted with and 
listened to our friends in the House, both on the Small Business 
Committee and the Science Committee. We do not see this legislation as 
contentious, and we have every intention of seeing this bill signed 
into law well before September.
  Shaping this legislation has gone beyond policy makers; we have 
reached out to small companies that conduct the STTR projects and 
research universities and Federal labs. On my part, I sponsored two 
meetings in Massachusetts on March 16th to discuss the STTR program. At 
my office in Boston, there was a very helpful discussion with six of 
Massachusetts' research universities expressing what they like and 
dislike about the program, and why they use it, or don't use it more. 
The meeting included the licensing managers from Boston University, 
Harvard, MIT, Northeastern University, and the University of 
Massachusetts. They said they need to hear more about the STTR program 
and have more outreach to their scientists and engineers so that they 
understand when and how to apply for the program. Based on their 
suggestions, we've included an outreach mandate in our bill. In 
addition, we're trying to provide SBA with more resources in its Office 
of Technology to be responsive to the concerns of STTR institutions and 
small businesses.
  Later that day, my office was part of a meeting in Newton at 
Innovative Training Systems in which about 20 leaders and 
representatives of small high-tech companies talked about the SBIR and 
STTR programs. They make a tremendous contribution to the economy and 
state of Massachusetts. They said that the Phase II award for STTR 
should be raised from $500,000 to $750,000 to be consistent with the 
SBIR program. Otherwise, since a minimum of 30 percent of the award 
goes to the university partner, it was too little money to really 
develop the research.

  As I said, we listened to them. And we also listened to what the 
program managers of the participating agencies had to say. Agencies 
participate in this program if their extramural R&D budget is greater 
than $1 billion. Consequently, there are five eligible agencies: the 
Department of Defense, the Department of Energy, the National 
Aeronautics and Space Administration, the Department of Health and 
Human Services, and the National Science Foundation. For the STTR 
projects, they set aside .15 percent of their extramural R&D budget. 
That comes to about $65 million per year invested in these 
collaborations between small business and research institutions.
  Combining all the suggestions for improvement, the STTR Program 
Reauthorization Act of 2001 does the following:
  1. It reauthorizes the program for nine years, setting the expiration 
date for September 30th, 2010.
  2. Starting in two years, FY2003, it raises in small increments the 
percentage that Departments and Agencies set aside for STTR R&D. In 
FY2004, the percentage increases from .15 percent to .3 percent. After 
three years, in FY2007, the bill raises the percentage from .3 percent 
to .5 percent.
  3. Starting in two years, FY2003, the legislation raises the Phase II 
grant award amount from $500,000 to $750,000.
  4. It requires the participating agencies to implement an outreach 
program to research institutions in conjunction with any such outreach 
done with the SBIR program.
  5. As last year's legislation did for the SBIR program, this bill 
strengthens the data collection requirements regarding awards and the 
data rights for companies and research institutions that conduct STTR 
projects. The goal is to collect better information about the companies 
doing the projects, as well as the research and development, so that we 
can measure success and track technologies.
  While I believe that these changes reflect common sense and are 
reasonable, I would like to discuss two of the proposed changes.
  First, I would like to talk about reauthorizing the program for nine 
years. The STTR program was a pilot program when it was first enacted 
in 1992. Upon review in 1997, the results of the program were generally 
good and the program was reauthorized that year. A more recent review 
and study of the program shows that the program has become more 
successful as it has had more time to develop. Specifically, the 
commercialization rate of the research is higher than for most research 
and development expenditures. Further, universities and research 
institutions have developed excellent working relationships with small 
businesses, and the program has also had good geographic diversity, 
involving small companies and research institutions throughout the 
country. The nine-year reauthorization will allow the agencies, small 
businesses and universities to gradually ramp up to the higher 
percentage in a predictable and orderly manner.
  Second, I would like to talk about the gradual, incremental increases 
in the percentages reserved for STTR contracts and the increase in the 
Phase II awards. When we reached out to the small businesses and the 
research institutions that conduct STTR projects, and the program 
managers of the five agencies that participate in the STTR program, we 
heard two recurring themes: one, raise the amount of the Phase II 
awards; and two, increase the amount of the percentage reserved for 
STTR projects.
  Speaking to the first issue, we heard that the Phase II awards of 
$500,000 generally are not sufficient for the research and development 
projects and should be increased to $750,000, the same as the SBIR 
Phase II awards, to make the awards worth applying for the small 
businesses and research institutions.
  As for the second issue, we were told that the percentage of .15 
reserved for STTR awards needed to be increased in order to better meet 
the needs of the agencies. Last year, that .15 percent of the five 
agencies' extramural research and development budgets amounted to a 
total $65 million dollars available for small businesses and research 
institutions to further develop research and transfer technology from 
the lab to market through the STTR program. Less than a quarter of one 
percent to help strengthen this country's technological progress is not 
extravagant; in fact, it is not adequate support for this important 
segment of the economy.
  Nevertheless, we are very conscientious about the needs of the 
departments and agencies to meet their missions for the nation and have 
proposed gradual increases that take into full consideration the 
realities of implementing the changes for the agencies

[[Page S4584]]

and departments that participate in the program. Consequently, the 
legislation does not increase the percentage for STTR awards until two 
full years after the program has been reauthorized.
  We are also conscientious about the fact that we want more research, 
not less, so we have timed the increase of the Phase II awards to 
coincide with the initial percentage increase reserved for STTR 
projects.
  Overall, we believe this gradual increase will help encourage more 
innovation and greater cooperation between research institutions and 
small businesses. As the program requires, at least 30 percent of these 
additional funds will go to university and research institutions. Not 
only do the universities and research institutions that collaborate 
with small businesses get 30 percent of the STTR award money for each 
contract, they also benefit in that they often receive license fees and 
royalties. We are also conscientious about being fiscally responsible, 
the percentage increases will have no budget implication since it does 
not increase the amount of the money spent. Rather, it ultimately, 
after six years, redirects one half of one percent to this very 
successful program which benefits the economy overall.
  This bill will ensure that this successful program is continued and 
increased. It will also provide Congress with important information and 
data on the program and encourage more outreach to small businesses and 
research institutions.
  Mr. President, I want to encourage my colleagues to learn about this 
program, to find out the benefits to their state's hi-tech small 
businesses and research universities and labs, and to join me in 
passing this legislation in the Senate as soon as possible. To my 
friend from Missouri, Senator Bond, I want to thank you and your staff 
for working with me and my staff to build this country's technological 
progress. I also want to thank all of the cosponsors: Senators Cleland, 
Landrieu, Bennett, Levin, Lieberman, Harkin, Bingaman, Enzi and 
Cantwell.
  Mr. President, I ask that my statement and a copy of the bill be 
included in the Record.
  Mr. ENSIGN. Mr. President, I ask unanimous consent that the 
resolution be agreed to, the preamble be agreed to, the motion to 
reconsider be laid upon the table, and any statements relating to the 
resolution be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The resolution (S. Res. 86) was agreed to.
  The preamble was agreed to.
  (The text of the resolution is located in today's Record under 
``Statements on Submitted Resolutions.'')

                          ____________________