[Congressional Record Volume 149, Number 141 (Wednesday, October 8, 2003)]
[Extensions of Remarks]
[Page E2006]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          SMALL BUSINESS INNOVATION GRANTS (SBIR) ELIGIBILITY

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                            HON. SAM GRAVES

                              of missouri

                    in the house of representatives

                       Wednesday, October 8, 2003

  Mr. GRAVES. Mr. Speaker, I rise today to urge the Small Business 
Committee to continue working to restore the eligibility for Small 
Business Innovation Research (SBIR) grants to venture backed 
biotechnology start-up companies. Under the SBIR program, a specific 
percentage of all Federal research and development grant monies are 
reserved for small business applicants. These funds provide critical 
``seed'' money to new business innovators.
  However, recent changes in the Small Business Administration's (SBA) 
interpretation of eligibility standards for SBIR grants now disqualify 
many start-up biotechnology companies with venture capital backing. 
Specifically, SBA regulations require that, in order to be eligible for 
a grant, a small company must be at least 51 percent owned by one or 
more individuals. Recently, the SBA has interpreted ``individuals'' to 
mean only natural persons, resulting in the disqualification of 
companies with venture capital backing from the SBIR program.
  Home to a burgeoning biotech industry, Missouri relies on the SBIR 
program to fund early-stage companies. In addition, venture capital 
plays a vital role in the financial support of the very companies the 
SBIR program has been designed to benefit. However, this interpretation 
will prevent the most innovative small biotech companies in Missouri 
from participating in SBIR grant programs, resulting in an adverse 
impact on the industry as well as the economy.
  Clearly, this new interpretation threatens an important funding 
source for Missouri's start-up biotech companies. Once again, Mr. 
Speaker, I urge the Small Business Committee to restore the eligibility 
for SBIR grants to venture backed biotechnology start-up companies so 
Missourians can take the first steps in this new century to secure a 
sustainable and beneficial future in the biotechnology industry.

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