[Congressional Record Volume 147, Number 125 (Monday, September 24, 2001)]
[House]
[Pages H5936-H5941]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM REAUTHORIZATION ACT OF 2001
Mr. MANZULLO. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 1860) to reauthorize the Small Business Technology Transfer
Program, and for other purposes, as amended.
The Clerk read as follows:
H.R. 1860
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Small Business Technology
Transfer Program Reauthorization Act of 2001''.
[[Page H5937]]
SEC. 2. EXTENSION OF PROGRAM AND EXPENDITURE AMOUNTS.
(a) In General.--Section 9(n)(1) of the Small Business Act
(15 U.S.C. 638(n)(1)) is amended to read as follows:
``(1) Required expenditure amounts.--
``(A) In general.--With respect to each fiscal year through
fiscal year 2009, each Federal agency that has an extramural
budget for research, or research and development, in excess
of $1,000,000,000 for that fiscal year, shall expend with
small business concerns not less than the percentage of that
extramural budget specified in subparagraph (B), specifically
in connection with STTR programs that meet the requirements
of this section and any policy directives and regulations
issued under this section.
``(B) Expenditure amounts.--The percentage of the
extramural budget required to be expended by an agency in
accordance with subparagraph (A) shall be--
``(i) 0.15 percent for each fiscal year through fiscal year
2003; and
``(ii) 0.3 percent for fiscal year 2004 and each fiscal
year thereafter.''.
(b) Conforming Amendment.--Section 9 of the Small Business
Act (15 U.S.C. 638) is amended in subsections (b)(4) and
(e)(6), by striking ``pilot'' each place it appears.
SEC. 3. INCREASE IN AUTHORIZED PHASE II AWARDS.
(a) In General.--Section 9(p)(2)(B)(ix) of the Small
Business Act (15 U.S.C. 638(p)(2)(B)(ix)) is amended--
(1) by striking ``$500,000'' and inserting ``$750,000'';
and
(2) by inserting before the semicolon at the end the
following: ``, and shorter or longer periods of time to be
approved at the discretion of the awarding agency where
appropriate for a particular project''.
(b) Effective Date.--The amendments made by subsection (a)
shall be effective beginning in fiscal year 2004.
SEC. 4. AGENCY OUTREACH.
Section 9(o) of the Small Business Act (15 U.S.C. 638(o))
is amended--
(1) in paragraph (12), by striking ``and'' at the end;
(2) in paragraph (13), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(14) implement an outreach program to research
institutions and small business concerns for the purpose of
enhancing its STTR program, in conjunction with any such
outreach done for purposes of the SBIR program; and''.
SEC. 5. POLICY DIRECTIVE MODIFICATIONS.
Section 9(p) of the Small Business Act (15 U.S.C. 638(p))
is amended by adding at the end the following:
``(3) Modifications.--Not later than 120 days after the
date of enactment of this paragraph, the Administrator shall
modify the policy directive issued pursuant to this
subsection to clarify that the rights provided for under
paragraph (2)(B)(v) apply to all Federal funding awards under
this section, including the first phase (as described in
subsection (e)(6)(A)), the second phase (as described in
subsection (e)(6)(B)), and the third phase (as described in
subsection (e)(6)(C)).''.
SEC. 6. STTR PROGRAM DATA COLLECTION.
(a) In General.--Section 9(o) of the Small Business Act (15
U.S.C. 638(o)), as amended by this Act, is amended by adding
at the end the following:
``(15) collect, and maintain in a common format in
accordance with subsection (v), such information from
awardees as is necessary to assess the STTR program,
including information necessary to maintain the database
described in subsection (k).''.
(b) Database.--Section 9(k) of the Small Business Act (15
U.S.C. 638(k)) is amended--
(1) in paragraph (1)--
(A) by inserting ``or STTR'' after ``SBIR'' each place it
appears;
(B) in subparagraph (C), by striking ``and'' at the end;
(C) in subparagraph (D), by striking the period at the end
and inserting ``; and''; and
(D) by adding at the end the following:
``(E) with respect to assistance under the STTR program
only--
``(i) whether the small business concern or the research
institution initiated their collaboration on each assisted
STTR project;
``(ii) whether the small business concern or the research
institution originated any technology relating to the
assisted STTR project;
``(iii) the length of time it took to negotiate any
licensing agreement between the small business concern and
the research institution under each assisted STTR project;
and
``(iv) how the proceeds from commercialization, marketing,
or sale of technology resulting from each assisted STTR
project were allocated (by percentage) between the small
business concern and the research institution.''; and
(2) in paragraph (2)--
(A) by inserting ``or an STTR program pursuant to
subsection (n)(1)'' after ``(f)(1)'';
(B) by striking ``solely for SBIR'' and inserting
``exclusively for SBIR and STTR'';
(C) in subparagraph (A)(iii), by inserting ``and STTR''
after ``SBIR''; and
(D) in subparagraph (D), by inserting ``or STTR'' after
``SBIR''.
(c) Simplified Reporting Requirements.--Section 9(v) of the
Small Business Act (15 U.S.C. 638(v)) is amended by inserting
``or STTR'' after ``SBIR'' each place it appears.
(d) Reports to Congress.--Section 9(b)(7) of the Small
Business Act (15 U.S.C. 638(b)(7)) is amended by striking
``and (o)(9),'' and inserting ``, (o)(9), and (o)(15), the
number of proposals received from, and the number and total
amount of awards to, HUBZone small business concerns under
each of the SBIR and STTR programs,''.
SEC. 7. STTR PROGRAM-WIDE MODEL AGREEMENT FOR INTELLECTUAL
PROPERTY RIGHTS.
(a) Development of Model Agreement.--Section 9 of the Small
Business Act (15 U.S.C. 638) is amended by adding at the end
the following:
``(w) STTR Model Agreement for Intellectual Property
Rights.--
``(1) In general.--The Administrator shall promulgate
regulations establishing a single model agreement for use in
the STTR program that allocates between small business
concerns and research institutions intellectual property
rights and rights, if any, to carry out follow-on research,
development, or commercialization.
``(2) Opportunity for comment.--In promulgating regulations
under paragraph (1), the Administrator shall provide to
affected agencies, small business concerns, research
institutions, and other interested parties the opportunity to
submit written comments.''.
(b) Adoption of Model Agreement by Federal Agencies.--
Section 9(o)(11) of the Small Business Act (15 U.S.C.
638(o)(11)) is amended by striking ``develop a model
agreement not later than July 31, 1993, to be approved by the
Administration,'' and inserting ``adopt the agreement
developed by the Administrator under subsection (w) as the
agency's model agreement''.
SEC. 8. FAST PROGRAM ASSISTANCE TO WOMEN-OWNED AND MINORITY-
OWNED SMALL BUSINESS CONCERNS AND CONCERNS
LOCATED IN AREAS NOT PARTICIPATING IN SBIR AND
STTR.
(a) Selection Consideration.--Section 34(c)(2)(B) of the
Small Business Act (15 U.S.C. 657d(c)(2)(B)) is amended--
(1) in clause (iv), by striking ``and'' at the end;
(2) in clause (v), by striking the period at the end and
inserting ``; and''; and
(3) by adding at the end the following new clause:
``(vi) whether the proposal addresses the needs of small
business concerns--
``(I) owned and controlled by women;
``(II) owned and controlled by minorities; and
``(III) located in areas that have historically not
participated in the SBIR and STTR programs.''.
(b) Regulations.--Section 34(c)(4) of the Small Business
Act (15 U.S.C. 657d(c)(4)) is amended by adding at the end
the following: ``The Administrator shall promulgate
regulations establishing standards for the consideration of
proposals under paragraph (2), including standards regarding
each of the considerations identified in paragraph (2)(B).''.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Illinois (Mr. Manzullo) and the gentleman from Texas (Mr. Gonzalez)
each will control 20 minutes.
The Chair recognizes the gentleman from Illinois (Mr. Manzullo).
General Leave
Mr. MANZULLO. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on this legislation.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Illinois?
There was no objection.
Mr. MANZULLO. Mr. Speaker, I yield myself such time as I may consume.
The purpose of H.R. 1860 is to amend the Small Business Act to extend
the Small Business Technology Transfer Program, more familiarly known
as the STTR Program, through the end of September 2009.
Under present law, the STTR program will terminate on September 30,
2001. The STTR program requires a cooperative venture between a for-
profit small business and a researcher from a university, federal lab,
or a nonprofit research institute for the purpose of meeting particular
needs or developing commercially viable products from ideas spawned in
a laboratory environment.
This program builds on the well-established reputation that small
businesses have for innovation and job creation to the benefit of the
economy, generally, and specifically those who participate in the
program. It also benefits the vast wealth of scientific knowledge that
is available in this Nation's research institutions that employ
approximately one-fourth of the scientists and engineers in the
country.
Together small business concerns and the research community have
proved a successful vehicle for moving ideas from academic environments
to the practical, useful commercial world to the benefit of U.S.
economy and workers. For a Federal agency to participate in the
program, it must have a contracted-out research and development budget
that exceeds $1 billion in
[[Page H5938]]
any fiscal year. Currently there are five Federal agencies that meet
the funding requirement: the Department of Defense, the Department of
Energy, the Department of Health and Human Services, NASA, and the
National Science Foundation.
No new funding is required to reauthorize this program since the
program is funded as a percentage of the contracted-out research and
development funds annually appropriated by Congress to those federal
agencies meeting the funding threshold.
Beginning in fiscal year 2004, the percentage of the R&D budget
required to be spent for small high tech firms by agencies
participating in the program increases from .15 percent to .3 percent.
Beginning in fiscal year 2004, the amount that a small business can
receive for Phase II award is increased from 500,000 to 750,000 in line
with Phase II awards made under the SBIR program.
Participating agencies are directed in this bill to implement an
outreach program to research institutions and small business concerns
for the purpose of enhancing the STTR program in conjunction with any
such outreach done for purposes of SBIR program.
The bill is important to foster the development of small high
technology firms. I commend my Committee on Science colleagues, the
gentleman from Michigan (Mr. Ehlers) and the gentleman from Michigan
(Mr. Barcia), in bringing this bill to the floor.
Mr. Speaker, I reserve the balance of my time.
Mr. GONZALEZ. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, today we stand and take the final step toward
reauthorizing the Small Business Technology Transfer Program and
upgrading it from its current pilot program status.
We began this initiative in 1992 with a unique goal, to help the
small business and research communities work together to bring
innovative new technologies to the marketplace. It is impossible to
overstate the impact that technological innovation has had on the
economy and on our lives. Computer and telecommunications innovation,
biotechnology and chemical engineering have fueled a boom and
profoundly changed the way we work and live. Some technologies were
exotic or even unheard of just 10 years ago. Today, they have become
commonplace.
Mr. Speaker, the Small Business Technology Transfer Program has
helped to spur some of this remarkable creativity and growth. Between
1994 and 1998 alone, STTR awarded 864 Federal grants for research
through 5 Federal departments and agencies. STTR has led to inventions
emerging in highly evolved technologies, including advances in vaccine
applications and biotechnology research.
With the passage of today's legislation, we will continue to support
small technology firms across this country by extending the life of
STTR through the year 2009, while expanding the program from its
previous pilot program status.
In particular, we will expand the program's reach by increasing the
percentage of Federal research grants reserved for small businesses
from 0.15 to 0.30 percent, doubling the amount of research dollars
going to small businesses. This will go a long way towards increasing
the role small firms play in developing new technology.
In addition to increasing the number of opportunities for new
enterprises, we are increasing the amount of Phase II grants from
$500,000 to $750,000 so that those already successful small businesses
will have an even better chance of product commercialization.
We are also directing the SBA to develop a streamlined model
agreement so that small businesses can spend more time developing
technology and less time on bureaucratic paperwork.
But that is not enough. The Committee on Small Business recognizes
that technology can be the great equalizer in underserved communities
and has positioned STTR to play a far larger role. For example, of the
864 contracts awarded, only 1.5 percent of those went to women-owned
small businesses, and only 2.8 percent were awarded to minority
businesses. This defeats one of the core missions of STTR, to help
small businesses that otherwise do not have access to the tools and
advice they need to take their ideas from the laboratory drawing board
to the marketplace.
The committee has also directed the Small Business Administration to
begin tracking awards to low-income communities. This will give a
measurement of the level of support that STTR is providing to these
areas.
Finally, we are redirecting the Federal and State Technological
Partnership to further emphasize the importance of outreach to low-
income communities in spreading and increasing the benefits of
technological innovation. We created this program last year to
encourage technology development in areas that had limited growth and
success in the past.
An important component of this was supposed to be outreach to low-
income communities. Unfortunately, the implementing regulation failed
to focus on low-income communities. In consultation with the Senate,
the committee changed the statutory language specifically to increase
STTR and Small Business Innovation Research awards to low-income
communities.
With this bill, we expanded the language to focus awards on
businesses owned by women and socially and economically disadvantaged
individuals within each State, as well as small businesses in regions
that have been previously overlooked by STTR and SBIR awards.
I want to make it absolutely clear that outreach is a critical
component to technology development. The enhancements included in this
bill will begin to open access to technology for businesses located in
low-income communities and other underserved regions, and we will
measure the success of this outreach by tracking the number of those
awards in those particular communities.
During the past decade, we saw enormous growth in small business and
technological innovation. The benefits are many, but the gap between
communities who benefit from the economic strength of technological
entrepreneurs and those who are left behind is too wide. STTR is
instrumental in helping more researchers and small businesses build the
next new thing while at the same time bridging the digital divide.
Mr. Speaker, I urge my colleagues to support this measure.
Mr. Speaker, I reserve the balance of my time.
Mr. MANZULLO. Mr. Speaker, I yield 8 minutes to the gentleman from
Michigan (Mr. Ehlers), the primary sponsor of this legislation.
Mr. EHLERS. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, I rise in support of H.R. 1860, the Small Business
Technology Transfer Program Reauthorization Act of 2001. I thank the
gentleman from Illinois (Mr. Manzullo) and the gentleman from Texas
(Mr. Gonzalez) for their supportive comments on this bill.
Approximately 5 years ago, I was chartered by then-Speaker Gingrich
and the gentleman from Wisconsin (Mr. Sensenbrenner), the chairman of
the Committee on Science and Technology, to prepare a report on
updating the science policy of our Nation and outline where we should
be heading. That report came out of the Committee on Science and
Technology, was approved by the House of Representatives, and became
popular enough that it is now in paperback.
In that report, we made a major statement on several issues; one of
which was to bridge the so-called valley of death between basic
research and applied research so that we could have more ideas flowing
out of basic research into applied research and eventually into product
development.
The program we are talking about here today is a program which can
help bridge that valley. We are recommending, based on the success of
this program, that it be reauthorized and, in fact, improved.
Investment in technology, research, and development and this
scientific enterprise is a key component of sustaining the economic
growth of the past decade, much of which is based on developments in
science and technology.
As growth slows, Congress must seek ways to bolster its investment
and renew strong economic performance. I am pleased to rise in support
of this legislation because it will bring research out of the labs and
into the
[[Page H5939]]
marketplace to help our economic engine roar back to life.
{time} 1430
The Federal Government funds a wide range of basic research efforts
which are carried out by our Nation's research institutions, such as
universities, Federal laboratories, and nonprofit research centers.
Bringing the successes of these efforts into the marketplace can be
difficult for a research institution. They are simply not geared up for
this. At the same time, small businesses have a well-earned reputation
for introducing new ideas to the marketplace but often lack the
resources and the personnel to carry out extensive research and
development. The Small Business Technology Transfer program, better
known as STTR, helps bridge this gap.
This program, which is the subject of this bill, stimulates
technology transfer from research institutions to small businesses by
awarding grants for collaborative efforts between small businesses and
nonprofit research institutions. This award process has three phases.
Phase one is a testing stage to determine the scientific, technical,
and commercial merit and feasibility of a proposed collaboration
effort. Grants are limited to $100,000 during this stage. Projects that
successfully complete phase one may be further developed in phase two,
with additional funding up to $500,000. Phase three is designed for
final R&D efforts and for commercialization of the idea. However, no
Federal STTR funding is allowed for this stage. At that point it
becomes the responsibility of the company.
This program is currently funded through a set-aside of 0.15 percent
of Federal R&D budgets that exceed the threshold of $1 billion.
Currently, five agencies participate in STTR: Department of Defense;
National Aeronautics and Space Administration; Department of Health and
Human Services, primarily through the National Institutes of Health;
the Department of Energy; and the National Science Foundation.
The General Accounting Office evaluated STTR in 2000-2001 and found
that companies receiving phase one grants felt that both the company
and research counterpart contributed significantly to the expertise and
implementation of the project. They reported a variety of outcomes,
ranging from product sales to project discontinuation. And 99 percent
of the grant recipient companies surveyed believed the STTR program
should continue.
In addition to that, they did a survey of the companies involved to
see what the effects were, and they discovered that there is a
substantial return on investment. Just the six most successful projects
alone accounted for sales of $132 million. That almost covers the cost
of the entire STTR program during the first few years.
In addition, the top two projects had $115 million of sales. Now,
recognize, these sales go on and on for years. These are just the sales
for the first year or two. So it clearly is a program that works. It is
successful and does improve our economy.
This current bill, which I am offering, H.R. 1860, does several
things to improve the program. First, the legislation reauthorizes the
program through fiscal year 2009 and raises the set-aside percentage
from 0.15 percent to 0.3 percent, which will increase the annual awards
by approximately $60 million overall. Second, it increases the ceiling
on the phase two award from $500,000 to $750,000. This simply reflects
the rising costs of doing business since the program's inception in
1992.
Finally, H.R. 1860 will, among other things, strengthen the data
collection and reporting requirements of the agencies and small
businesses participating in STTR and standardize intellectual property
rights agreements between the agencies and their partners. That last
aspect is very important, because the participants reported a
significant amount of their time, money, and effort had gone into
developing the property rights agreements between the agencies and the
business partners. This bill standardizes that process and will save a
considerable amount of time and money, particularly in attorneys' fees
and the time of the participants.
This bill is a cooperative effort between the House Committee on
Science, the House Committee on Small Business and the Senate Small
Business Committee. The three committees have worked in a bipartisan,
bicameral effort to ensure this important program is reauthorized. In
fact, the manager's amendment reflects that cooperation by inserting
the text of Senate bill 856, which is almost identical to our bill, as
the manager's amendment.
I would like to thank the leadership of these committees, Chairman
Boehlert, ranking member Hall, Chairman Manzullo and ranking member
Velazquez, for their efforts in bringing this bill to the floor. This
is a good bill that will improve upon an already successful small
business program. It will strengthen R&D partnerships between research
institutions and small businesses. It will help America's economy by
encouraging new small business ventures, which are a key component of
fueling further economic growth. And it will demonstrate the importance
of funding Federal research efforts by bringing technology developed in
research institutions into the marketplace and creating jobs.
Mr. Speaker, I urge Members to support the bill.
Mr. GONZALEZ. Mr. Speaker, I yield such time as he may consume to the
gentleman from New Mexico (Mr. Udall).
Mr. UDALL of New Mexico. Mr. Speaker, the small business technology
transfer program has been a valuable tool to promote useful
technological innovation since it was first authorized in 1992. Today,
we take the final step toward extending and expanding STTR for the
future. I hope that, if we see the same kind of development in the next
10 years as we have seen in the past decade, many more wonders will
follow to change our lives and bolster our economy, which clearly needs
it at this time.
The Subcommittee on Rural Enterprises, Agriculture, and Technology,
on which I serve, held a hearing on this program on June 20, 2001. The
STTR program is designed to address the lack of capital that small
business research and development firms experience when getting
started. Another unique aspect of the program is that small businesses
can partner for research projects with research institutions, federally
funded research and development centers, or nonprofit organizations.
By supporting this legislation, we are taking a big step to
strengthen and improve the STTR program and its delivery program to
women-owned, minority-owned and those companies located in low-income
communities. This program is a valuable tool to assist small business
owners who focus on research and development initiatives.
We have expanded the STTR in a number of ways. We raised the
percentage of Federal agencies' research budgets reserved for STTR from
1.5 percent to 3 percent. We also increased the amount of phase two
awards from $500,000 to $750,000 to help more innovations get to
market. To help small businesses and institutions deal with a blizzard
of different standardized agreements, we are asking the Small Business
Administration to develop a single, standardized model agreement. And
we are asking SBA to make a concerted effort to reach out to
underserved areas of the country with grants for those communities. We
will see how well the agency does by tracking where and to whom STTR
and SBIR grants are awarded. Technology can be the great economic
equalizer, but the digital divide must be bridged first.
In my district in New Mexico, I have a large rural area. Issues of
the digital divide are profound. In fact, one young student recently
won a computer in a school contest but did not have a telephone line to
hook up the computer. We need an aggressive effort at digital
inclusion. The small business technology transfer program will help
bridge this gap through a grant program.
I would like to thank all my colleagues on the Committee on Small
Business for their support and hard work on this bill, which has been 9
years in the making and is needed now more than ever. I would also like
to thank the gentleman from Illinois (Mr. Manzullo). I know that he
brings to this committee a bipartisan approach. We have been very
successful at working together. I congratulate him for all his hard
work and leadership on this bill.
[[Page H5940]]
Mr. GONZALEZ. Mr. Speaker, I yield myself the balance of my time.
The Committee on Small Business, Mr. Speaker, has always been
recognized as a true model of bipartisanship. I commend the chairman of
the committee today for continuing in that tradition. I want to commend
both the chairman of the committee and the ranking member for being
really the guiding light in this as in many other pieces of legislation
that will expand that business universe to all the small business men
and women in this Nation.
H.R. 1860 today presents a greater opportunity than ever before. It
is not only an expansion but it is a monitoring; and it really is an
accountability model to make sure that the legislation that we pass
when it gets down on the ground, in our communities, actually is doing
what it is supposed to.
Again, I commend the chairman and the ranking member for their fine
work. I would ask that all my colleagues join us today in passage of
this fine piece of legislation.
Mr. MANZULLO. Mr. Speaker, I yield myself the balance of my time.
I would urge my colleagues to vote in favor of this bill. We had a
very interesting full committee hearing in New Mexico with regard to
the Los Alamos lab in the district of the gentleman from New Mexico
(Mr. Udall). It became quite apparent that there has to be something
done to make at least that lab come to the table and to include more
local businesses and people involved in technology as part of their
program. If this program is reauthorized, which I hope it will be, we
will stay on top of the progress at Los Alamos and the other labs in
this country to make sure the taxpayers' dollars that they are being
given are used wisely and that the portion that is set aside for small
businesspeople is done exactly for that purpose.
I would urge my colleagues to vote for the bill.
Ms. VELAZQUEZ. Mr. Speaker, as an original co-sponsor of H.R. 1860, I
rise in support of this important legislation to not only reauthorize,
but to make permanent the Small Business Administration's Small
Business Technology Transfer (STTR) Program.
As the Ranking Democratic Member on the Committee on Small Business,
I am well aware of the important role that technology plays in not only
developing small businesses, but in strengthening the Nation's economy.
The economic boom of the 1990's--the longest period of economic
strength in our Nation's history--was fueled by small businesses and,
especially high-tech firms. The strength of the economy, for such an
unprecedented time period, was directly related to the success of the
high-tech sector.
It might surprise my colleagues to know that small businesses are the
leading source of innovations and that small firms produce twice as
many innovations per employee as large firms. In fact, small businesses
were responsible for most of the important innovations in the twentieth
century, including items ranging from such practical consumer products
and services as over-night delivery services and quick-frozen food to
high-tech items such as the personal computer and the high-resolution
x-ray microscope.
The STTR Program that we are authorizing today increases small
business participation in the high-tech industry. Established in 1992,
the STTR Program works by allowing small businesses to partner with
universities, non-profit organizations, and research institutions.
These research partners bring important capabilities that small
businesses might not possess on their own. The partnership submits a
proposal for necessary Federal research requirements.
With this reauthorization legislation, we have removed the pilot
status of the STTR Program, and have extended the Program through
fiscal year 2009.
We have also taken important steps to increase the amount of Federal
research that will be performed by small businesses by increasing the
percentage of agency's extra-mural research budgets to be devoted to
the STTR Program from .15 percent to .3 percent beginning in fiscal
year 2004. This action doubles the amount of research that the
government will be devoting to small firms.
We have increased the grant amount of Phase I awards from the current
$500,000 to $750,000. This provision allows small businesses more fund
with which to conduct their research, thereby increasing the likelihood
that their research will result in useful items that will make it to
the marketplace.
Additionally, the bill contains provisions that will assist with the
assessment of the STTR program, by requiring the collection and
maintaining of pertinent data, that can later be used to evaluate the
program's strengths and weaknesses.
Democratic Members included three important provisions to this
reauthorization to encourage the growth of high-tech businesses. These
changes include developing an STTR Program-wide model agreement,
increasing awards to low-income areas, and tracking low income awards.
The partnership between small businesses and research institutions is
a cornerstone of the STTR Program. Included in the formalization of
these teams, is the development of an agreement outlining the rights
and responsibilities of each partner, and addressing the intellectual
property rights and rights to carry out follow-on research, development
or commercialization, if any, that are assigned to each partner.
It has come to the Committee's attention that each participating
agency has a model agreement, and many universities and non-profits
have model agreements. The result is an exercise in which the small
business and its research partner must come to an agreement, and have
that agreement parallel the agency's agreement. The scenario often
occurs wherein a small business doing work for the same agency, but
with multiple research partners, must have multiple agreements, none of
which are standard. Ultimately, this results in time devoted to
developing partnership agreements when that time would be more
effectively used to actually conduct research.
Therefore, Committee Democrats have included language that requires
the Small Business Administration (SBA) to go through a rule-making
process to develop a single model agreement that can be acceptably used
by all small businesses, agencies, and research partners. It is
intended that this rule-making process involve commentary from affected
agencies, small business owners, research institutions, and other
interested parties. The resulting model agreement shall be used by all
agencies as their model agreement so that small research firms can
devote their time to that which they do best--research.
During last year's reauthorization of the Small Business Innovation
Research (SBIR) Program--the sister program to the STTR Program--
important language was included to increase awards to businesses
located in low-income areas. Language was included in this Federal and
State Technology (FAST) Partnership Program by House Democrats on the
Committee on Small Business that allows a 50 cents private for each
federal dollar for assistance directed to low-income areas--even if the
state is a high-volume state as far as SBIR awards. We were concerned
when this language was included, that it would not be implemented
properly, and that not enough emphasis would be placed on this issue.
This has become a reality in that the SBA did not include any reference
to low-income area assistance under the FAST Program in its recent
Policy Directive.
As a result of the SBA not being able to properly implement the low-
income area assistance of the FAST Program in accordance with our
intent, Committee Democrats included language in the STTR
reauthorization legislation to require that a separate evaluation
criteria for FAST proposals be developed to ensure that these proposals
address how they are going to increase STTR and SBIR awards to
businesses located in low-income areas. When we consulted with the
Senate Small Business Committee on this language, they expressed
concern that states not having substantive amounts of low-income areas
could be penalized in an evaluation criteria totally devoted to
increasing opportunities in these areas. Therefore, compromise language
was developed to establish an evaluation criteria to ensure that
proposals address how they are going to increase STTR and SBIR awards
to (1) businesses owned and controlled by women, (2) businesses owned
by minorities, and (3) businesses located in areas of high unemployment
and low-income--all of which have historically not participated in the
SBIR and STTR Programs. It is our intent that the SBA go through a
rule-making process to determine the weight that this criteria should
have compared to other criteria, and to determine the standards by
which these proposals shall be evaluated. It is our understanding that
the term ``minorities'' will encompass all socially and economically
disadvantaged individuals.
This important change to the FAST Program will address the grim
reality that of the 864 STTR awards from 1994 through 1998, only 1.5
percent went to women-owned businesses, and only 2.8 percent went to
minority owned businesses.
Lastly, we included language in the STTR reauthorization to require
that the SBA report to Congress, on an annual basis, on the number of
SBIR and STTR awards made to small businesses located in HUBZones.
These ``Historically Underutilized Business'' Zones are specifically
defined as areas of high unemployment and low income. These locations
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have been out of the mainstream of economic growth that the nation has
experienced over the past 10 years, and, as such, would benefit greatly
from the economic strength that technology provides to a community.
Further, tracking awards made to these businesses will assist in
evaluating the success of the FAST Program.
To conclude, I join my colleagues on the Committee on Small Business
who are committed to ensuring that small businesses across the country
are able to grow and expand their technology capabilities. We know that
not only do small businesses, in general, employ more than half of the
non-farm workforce, but small businesses account for 38 percent of the
private sector workforce in the high tech industry. We believe the STTR
and SBIR Programs are critical to increasing the capacity of small
business technology companies, and that these Programs should continue
to be monitored and evaluated, and given the appropriate resources to
ensure their continued success.
Mr. BOEHLERT. Mr. Speaker, I support the Small Business Technology
Transfer Program Reauthorization Act of 2001.
The Small Business Technology Transfer Program (STTR) was created in
1992 as an offshoot of the larger Small Business Innovation Research
Program (SBIR). Both programs are designed to tap into the innovation
of high technology small businesses and foster the commercialization of
their research capabilities.
Specifically, the STTR program funds cooperative research projects
between a small business and a non-profit research institution, such as
a university or Federally funded laboratory. There are currently five
participating agencies: Department of Defense, Department of Energy,
National Aeronautics and Space Administration, Department of Health and
Human Services, and the National Science Foundation. These agencies
make R&D awards to the small business collaboration in the hopes of
bringing new technology or technology that may have been ``on the
shelf'' of a research institution into the marketplace.
Since its inception, the STTR program has made approximately $300
million in awards to small businesses and research institutions. As GAO
recently reported, the return on our investment has been more than
satisfactory. Out of the 102 responses from companies participating in
the STTR program from fiscal years 1995-97, $132 million in sales and
$53 million in additional development funding was reported. In
addition, future sales for those projects are expected to be about $900
million dollars by December 2005. These successful results are so
encouraging since most of the R&D efforts have yet to reach the stage
where they are ready for the marketplace.
H.R. 1860 will continue this successful R&D program by reauthorizing
it through fiscal year 2009, and doubling the set-aside of the
participating agencies to .3 percent. The bill also makes important
improvements to the program. One of those is the establishment of an
electronic database that will better enable the Small Business
Administration to evaluate the program's progress.
Finally Mr. Speaker, I would like to commend the bipartisan effort to
ensure this important program continues it successful efforts of
technology transfer and innovation. I would like to thank Mr. Ehlers,
Chairman of the Subcommittee on Environment, Technology and Standards,
the Ranking Member of that Subcommittee Mr. Barcia, the Chairman of the
House Small Business Committee Mr. Manzullo, and the Ranking Members
Ms. Velazquez for their efforts in crafting the legislation before the
House.
H.R. 1860 will strengthen this country's research and development
community by investing in our nation's innovative small businesses and
I ask all Members to support its passage.
The SPEAKER pro tempore (Mr. Miller of Florida). The question is on
the motion offered by the gentleman from Illinois (Mr. Manzullo) that
the House suspend the rules and pass the bill, H.R. 1860, as amended.
The question was taken; and (two-thirds having voted in favor
thereof) the rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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