[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[Extensions of Remarks]
[Pages 6597-6598]
[From the U.S. Government Publishing Office, www.gpo.gov]




        CONGRESSIONAL BUDGET OFFICE COST ESTIMATE FOR H.R. 5819

                                 ______
                                 

                        HON. NYDIA M. VELAZQUEZ

                              of new york

                    in the house of representatives

                        Tuesday, April 22, 2008

  Ms. VELAZQUEZ. Madam Speaker, I submit the following CBO cost 
estimate for the bill H.R. 5819.
     H.R. 5819--SBIR/STTR Reauthorization Act
       Summary: H.R. 5819 would extend programs that require 
     certain agencies to set aside portions of their research and 
     development budgets for small businesses. The bill also would 
     authorize appropriations to improve efforts to develop 
     products funded through those programs that can be sold 
     commercially. Finally, the bill would require participating 
     agencies to develop new databases for program evaluation and 
     business development.
       Based on information from the Small Business Administration 
     (SBA) and other agencies, CBO estimates that implementing 
     H.R. 5819 would cost $263 million over the 2009-2013 period, 
     subject to appropriation of the specified and necessary 
     amounts. Enacting the bill would not affect direct spending 
     or revenues.
       H.R. 5819 contains no intergovernmental or private-sector 
     mandates as defined in the Unfunded Mandates Reform Act 
     (UMRA) and would impose no costs on state, local, or tribal 
     governments.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact is shown in the following table. The costs 
     of this legislation fall within budget functions 050 
     (national defense), 250 (general science, space, and 
     technology). 270 (energy), 300 (natural resources and 
     environment), 350 (agriculture), 370 (commerce and housing 
     credit), 400 (transportation), 500 (education, training, 
     employment, and social services), 550 (health), and 750 
     (administration of justice).

 
----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2008     2009     2010     2011     2012     2013
----------------------------------------------------------------------------------------------------------------
                                        SPENDING SUBJECT TO APPROPRIATION
 
SBIR/STTR Spending Under Current Law:
    Estimated Budget Authority a..........................       30        0        0        0        0        0
    Estimated Outlays.....................................       23        5        2        0        0        0
Proposed Changes:
    Reauthorize SBIR/STTR Programs:
        Estimated Authorization Level.....................        0       27       33       25       13       13
        Estimated Outlays.................................        0       21       30       27       16       14
    Increase R&D Budget Set-asides:
        Estimated Authorization Level.....................        0        8        9        7        3        3
        Estimated Outlays.................................        0        7        8        7        4        3
    Commercialization Program:
        Budget Authority..................................        0       28       28       28       28       28
        Estimated Outlays.................................        0        4       16       24       28       28
    FAST Program Reauthorization:
        Budget Authority..................................        0       10       10        0        0        0
        Estimated Outlays.................................        0        2        5        7        5        1
    Additional Agency Activities:
        Estimated Authorization Level.....................        0        6        0        0        0        0
        Estimated Outlays.................................        0        3        3        0        0        0
        Total Proposed Changes:
            Estimated Authorization Level.................        0       79       80       60       44       44
            Estimated Outlays.............................        0       37       62       65       53       46
Total SBIR/STTR Spending Under H.R. 5819:
    Estimated Authorization Level a.......................       30       79       80       60       44       44
    Estimated Outlays.....................................       23       42       64       65       53       46
----------------------------------------------------------------------------------------------------------------
a The 2008 level is the total amount CBO estimates was appropriated for that year for the SBIR and STIR
  programs.
Notes: SBIR = Small Business Innovation Research. STTR = Small Business Technology Transfer; FAST = Federal and
  State Technology Partnership.

       Basis of estimate: Under current law, the Small Business 
     Innovation Research (SBIR) program requires federal agencies 
     with extramural budgets for research and development (R&D) 
     that exceed $100 million to set aside 2.5 percent of that 
     budget for contracts with small businesses. (Extramural 
     expenditures are expenditures for activities not performed by 
     agency employees.) Likewise, the Small Business Technology 
     Transfer (STTR) program requires federal agencies with 
     extramural budgets for research and development that exceed 
     $1 billion to set aside 0.3 percent of that budget for 
     cooperative research between small businesses and a federal 
     laboratory or nonprofit research institution. SBA is 
     authorized to coordinate and monitor activities under both 
     programs. Eleven agencies currently participate in one or 
     both programs, including the Department of Defense, the 
     Department of Health and Human Services, the Department of 
     Energy, the Department of Agriculture, the National 
     Aeronautics and Space Administration, the National Science 
     Foundation, and the Environmental Protection Agency.
       The cost of these programs to the participating agencies 
     consists primarily of personnel and associated overhead costs 
     to solicit applications, prepare reports, and track outcomes. 
     The organizational structures of such program offices vary. 
     Some agencies have a full-time staff member devoted to the 
     SBIR and STIR programs, with other staff assisting as part of 
     their other duties; some have employees working part-time on 
     the program.
       Under current law, the SBIR program is scheduled to 
     terminate at the end of fiscal year 2008. and the STIR 
     program is scheduled to terminate at the end of fiscal year 
     2009.
       Based on information from SBA and participating agencies. 
     CBO estimates that implementing H.R. 5819 would cost $41 
     million in 2009 and $263 million over the 2009-2013 period, 
     assuming appropriation of the specified and necessary 
     amounts.
     Reauthorization of the SBIR and STTR programs
       The bill would extend both the SBIR and the STTR programs 
     through fiscal year 2010. Based on information from SBA and 
     participating agencies, CBO estimates that administering the 
     two programs will cost about $30 million this year (about $2 
     million of that amount will be for SBA). CBO expects that 
     federal agencies would continue to make extramural research 
     expenditures under current law regardless of the SBIR and 
     STTR programs and that participating agencies would continue 
     to incur costs to administer existing contracts with small 
     businesses for several years after the programs expire. CBO 
     estimates that extending the current SBIR and STTR programs 
     through 2010 would cost $108 million over the 2009-2013 
     period. assuming appropriation of the necessary amounts.
     Increase in R&D budget set-asides for small businesses
       The bill also would increase the amount of each agency's 
     R&D budget to be set aside for

[[Page 6598]]

     the programs starting in fiscal year 2009: for SBIR, the set-
     aside would be increased to 3 percent; for STTR, the amount 
     reserved for small businesses would be increased to 0.6 
     percent. Based on information from SBA and participating 
     agencies, CBO expects that the expansion would lead to an 
     increase in the number of applications received under both 
     programs by more than a third. Assuming appropriation of the 
     necessary amounts, CBO estimates that processing the 
     additional applications would cost $29 million over the 2009-
     2013 period.
     Commercialization program
       H.R. 5819 would authorize appropriations of $28 million a 
     year for a program to support agency efforts to assist small 
     businesses participating in the SBIR program in developing 
     products or services that could be sold to the government or 
     in commercial markets. SBA would oversee this 
     commercialization program--each agency participating in the 
     SBIR program would be required to request funds from SBA to 
     support its commercialization activities. Based on 
     information from SBA and participating agencies, CBO 
     estimates that implementing this provision would cost $100 
     million over the 2009-2013 period, subject to appropriation 
     of the specified amounts.
     FAST program reauthorization
       H.R. 5819 would reauthorize the Federal and State 
     Technology (FAST) Partnership program to conduct outreach and 
     provide technical assistance so as to increase the number 
     small businesses participating in the SBIR program. The 
     outreach activities would be directed to geographic areas 
     that are under-represented in the SBIR program and to small 
     businesses owned by women, veterans, and minorities. The bill 
     would authorize the appropriation of $10 million for each of 
     fiscal years 2009 and 2010 to implement the program. Based on 
     historical spending patterns of SBA's other business 
     assistance programs, CBO estimates that implementing this 
     provision would cost $20 million over the 2009-2013 period, 
     assuming appropriation of the specified amounts.
     Additional agency activities
       H.R. 5819 would require each agency participating in the 
     SBIR or STTR program to develop two databases, one to be used 
     by the agency for program evaluation, the other, which would 
     be available to the public, to be used to help businesses 
     participating in the SBIR or STTR program to attract 
     customers for the products or services created under the 
     program. Based on information from the participating 
     agencies, CBO estimates that developing new databases for 
     each participating agency would cost about $6 million over 
     the 2009-2013 period.
       Intergovernmental and private-sector impact: H.R. 5819 
     contains no intergovernmental or private-sector mandates as 
     defined in UMRA. The bill would reauthorize the FAST program, 
     a matching-grant program to encourage states to assist in the 
     development of high-technology small businesses. Any costs to 
     state governments of providing matching funds to participate 
     in the FAST program would be incurred voluntarily.
       Estimate prepared by: Federal Costs: Susan Willie; Impact 
     on State, Local, and Tribal Governments: Elizabeth Cove; and 
     Impact on the Private Sector: Jacob Kuipers.
       Estimate approved by: Peter H. Fontaine, Assistant Director 
     for Budget Analysis.
                                                   April 22, 2008.
     Hon. Nydia M. Velazquez,
     Chairwoman, Committee on Small Business, House of 
         Representatives, Washington, DC.
       Dear Madam Chairwoman: The Congressional Budget Office has 
     prepared the enclosed cost estimate for H.R. 5819, the SBIR/
     STTR Reauthorization Act.
       If you wish further details on this estimate, we will be 
     pleased to provide them. The CBO staff contact is Susan 
     Willie.
           Sincerely,
                                                  Peter R. Orszag.
       Enclosure.

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