[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

[[Page H5941]]

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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