[Congressional Record (Bound Edition), Volume 157 (2011), Part 3]
[Senate]
[Pages 4000-4025]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 SBIR/STTR REAUTHORIZATION ACT OF 2011

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will proceed to the consideration of S. 493, which the clerk 
will report.
  The assistant legislative clerk read as follows:

       A bill (S. 493) to reauthorize and improve the SBIR and 
     STTR programs, and for other purposes.

  The Senate proceeded to consider the bill, which had been reported 
from the Committee on Small Business and Entrepreneurship, with 
amendments; as follows:
  (The parts of the bill intended to be stricken are shown in boldface 
brackets and the parts of the bill intended to be inserted are shown in 
italic.)

       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 ``SBIR/STTR Reauthorization 
     Act of 2011''.

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Definitions.

         TITLE I--REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension of termination dates.
Sec. 102. Status of the Office of Technology.
Sec. 103. SBIR allocation increase.
Sec. 104. STTR allocation increase.
Sec. 105. SBIR and STTR award levels.
Sec. 106. Agency and program flexibility.
Sec. 107. Elimination of Phase II invitations.
Sec. 108. Participation by firms with substantial investment from 
              multiple venture capital operating companies in a portion 
              of the SBIR program.
Sec. 109. SBIR and STTR special acquisition preference.
Sec. 110. Collaborating with Federal laboratories and research and 
              development centers.
Sec. 111. Notice requirement.
Sec. 112. Express authority for an agency to award sequential Phase II 
              awards for SBIR or STTR funded projects.

          TITLE II--OUTREACH AND COMMERCIALIZATION INITIATIVES

Sec. 201. Rural and State outreach.
[Sec. 202. SBIR-STEM Workforce Development Grant Pilot Program.]
Sec. [203]202. Technical assistance for awardees.
Sec. [204]203. Commercialization Readiness Program at Department of 
              Defense.
Sec. [205]204. Commercialization Readiness Pilot Program for civilian 
              agencies.
Sec. [206]205. Accelerating cures.
Sec. [207]206. Federal agency engagement with SBIR and STTR awardees 
              that have been awarded multiple Phase I awards but have 
              not been awarded Phase II awards.
Sec. [208]207. Clarifying the definition of ``Phase III''.
Sec. [209]208. Shortened period for final decisions on proposals and 
              applications.

                  TITLE III--OVERSIGHT AND EVALUATION

Sec. 301. Streamlining annual evaluation requirements.
Sec. 302. Data collection from agencies for SBIR.
Sec. 303. Data collection from agencies for STTR.
Sec. 304. Public database.
Sec. 305. Government database.
Sec. 306. Accuracy in funding base calculations.
Sec. 307. Continued evaluation by the National Academy of Sciences.
Sec. 308. Technology insertion reporting requirements.
Sec. 309. Intellectual property protections.
Sec. 310. Obtaining consent from SBIR and STTR applicants to release 
              contact information to economic development 
              organizations.
Sec. 311. Pilot to allow funding for administrative, oversight, and 
              contract processing costs.
Sec. 312. GAO study with respect to venture capital operating company 
              involvement.
Sec. 313. Reducing vulnerability of SBIR and STTR programs to fraud, 
              waste, and abuse.
Sec. 314. Interagency policy committee.
Sec. 315. Simplified paperwork requirements.

                      TITLE IV--POLICY DIRECTIVES

Sec. 401. Conforming amendments to the SBIR and the STTR Policy 
              Directives.

                       TITLE V--OTHER PROVISIONS

Sec. 501. Research topics and program diversification.
Sec. 502. Report on SBIR and STTR program goals.
Sec. 503. Competitive selection procedures for SBIR and STTR programs.

     SEC. 3. DEFINITIONS.

       In this Act--
       (1) the terms ``Administration'' and ``Administrator'' mean 
     the Small Business Administration and the Administrator 
     thereof, respectively;
       (2) the terms ``extramural budget'', ``Federal agency'', 
     ``Small Business Innovation Research Program'', ``SBIR'', 
     ``Small Business Technology Transfer Program'', and ``STTR'' 
     have the meanings given such terms in section 9 of the Small 
     Business Act (15 U.S.C. 638); and
       (3) the term ``small business concern'' has the meaning 
     given that term under section 3 of the Small Business Act (15 
     U.S.C. 632).

         TITLE I--REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

     SEC. 101. EXTENSION OF TERMINATION DATES.

       (a) SBIR.--Section 9(m) of the Small Business Act (15 
     U.S.C. 638(m)) is amended--

[[Page 4001]]

       (1) by striking ``Termination.--'' and all that follows 
     through ``the authorization'' and inserting ``Termination.--
     The authorization'';
       (2) by striking ``2008'' and inserting ``2019''; and
       (3) by striking paragraph (2).
       (b) STTR.--Section 9(n)(1)(A) of the Small Business Act (15 
     U.S.C. 638(n)(1)(A)) is amended--
       (1) by striking ``In general.--'' and all that follows 
     through ``with respect'' and inserting ``In general.--With 
     respect'';
       (2) by striking ``2009'' and inserting ``2019''; and
       (3) by striking clause (ii).

     SEC. 102. STATUS OF THE OFFICE OF TECHNOLOGY.

       Section 9(b) of the Small Business Act (15 U.S.C. 638(b)) 
     is amended--
       (1) in paragraph (7), by striking ``and'' at the end;
       (2) in paragraph (8), by striking the period at the end and 
     inserting ``; and'';
       (3) by redesignating paragraph (8) as paragraph (9); and
       (4) by adding at the end the following:
       ``(10) to maintain an Office of Technology to carry out the 
     responsibilities of the Administration under this section, 
     which shall be--
       ``(A) headed by the Assistant Administrator for Technology, 
     who shall report directly to the Administrator; and
       ``(B) independent from the Office of Government Contracting 
     of the Administration and sufficiently staffed and funded to 
     comply with the oversight, reporting, and public database 
     responsibilities assigned to the Office of Technology by the 
     Administrator.''.

     SEC. 103. SBIR ALLOCATION INCREASE.

       Section 9(f) of the Small Business Act (15 U.S.C. 638(f)) 
     is amended--
       (1) in paragraph (1)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``Each'' and inserting ``Except as provided in paragraph 
     (2)(B), each'';
       (B) in subparagraph (B), by striking ``and'' at the end; 
     and
       (C) by striking subparagraph (C) and inserting the 
     following:
       ``(C) not less than 2.5 percent of such budget in fiscal 
     year 2013;
       ``(D) not less than 2.6 percent of such budget in fiscal 
     year 2014;
       ``(E) not less than 2.7 percent of such budget in fiscal 
     year 2015;
       ``(F) not less than 2.8 percent of such budget in fiscal 
     year 2016;
       ``(G) not less than 2.9 percent of such budget in fiscal 
     year 2017;
       ``(H) not less than 3.0 percent of such budget in fiscal 
     year 2018;
       ``(I) not less than 3.1 percent of such budget in fiscal 
     year 2019;
       ``(J) not less than 3.2 percent of such budget in fiscal 
     year 2020;
       ``(K) not less than 3.3 percent of such budget in fiscal 
     year 2021;
       ``(L) not less than 3.4 percent of such budget in fiscal 
     year 2022; and
       ``(M) not less than 3.5 percent of such budget in fiscal 
     year 2023 and each fiscal year thereafter.''; [and]
       (2) in paragraph (2)--
       (A) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and adjusting the margins 
     accordingly;
       (B) by striking ``A Federal agency'' and inserting the 
     following:
       ``(A) In general.--A Federal agency''; and
       (C) by adding at the end the following:
       ``(B) Department of defense and department of energy.--For 
     the Department of Defense and the Department of Energy, to 
     the greatest extent practicable, the percentage of the 
     extramural budget in excess of 2.5 percent required to be 
     expended with small business concerns under subparagraphs (D) 
     through (M) of paragraph (1)--
       ``(i) may not be used for new Phase I or Phase II awards; 
     and
       ``(ii) shall be used for activities that further the 
     readiness levels of technologies developed under Phase II 
     awards, including conducting testing and evaluation to 
     promote the transition of such technologies into commercial 
     or defense products, or systems furthering the mission needs 
     of the Department of Defense or the Department of Energy, as 
     the case may be.''[.]; and
       (3) by adding at the end the following:
       ``(4) Rule of construction.--Nothing in this subsection may 
     be construed to prohibit a Federal agency from expending with 
     small business concerns an amount of the extramural budget 
     for research or research and development of the Federal 
     agency that exceeds the amount required under paragraph 
     (1).''.

     SEC. 104. STTR ALLOCATION INCREASE.

       Section 9(n)(1)(B) of the Small Business Act (15 U.S.C. 
     638(n)(1)(B)) is amended--
       (1) in clause (i), by striking ``and'' at the end;
       (2) in clause (ii), by striking ``thereafter.'' and 
     inserting ``through fiscal year 2012;''; [and]
       (3) by adding at the end the following:
       ``(iii) 0.4 percent for fiscal years 2013 and 2014;
       ``(iv) 0.5 percent for fiscal years 2015 and 2016; and
       ``(v) 0.6 percent for fiscal year 2017 and each fiscal year 
     thereafter.''[.]; and
       (4) by adding at the end the following:
       ``(4) Rule of construction.--Nothing in this subsection may 
     be construed to prohibit a Federal agency from expending with 
     small business concerns an amount of the extramural budget 
     for research or research and development of the Federal 
     agency that exceeds the amount required under paragraph 
     (1).''.

     SEC. 105. SBIR AND STTR AWARD LEVELS.

       (a) SBIR Adjustments.--Section 9(j)(2)(D) of the Small 
     Business Act (15 U.S.C. 638(j)(2)(D)) is amended--
       (1) by striking ``$100,000'' and inserting ``$150,000''; 
     and
       (2) by striking ``$750,000'' and inserting ``$1,000,000''.
       (b) STTR Adjustments.--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 ``$100,000'' and inserting ``$150,000''; 
     and
       (2) by striking ``$750,000'' and inserting ``$1,000,000''.
       (c) Annual Adjustments.--Section 9 of the Small Business 
     Act (15 U.S.C. 638) is amended--
       (1) in subsection (j)(2)(D), by striking ``once every 5 
     years to reflect economic adjustments and programmatic 
     considerations'' and inserting ``every year for inflation''; 
     and
       (2) in subsection (p)(2)(B)(ix), as amended by subsection 
     (b) of this section, by inserting ``(each of which the 
     Administrator shall adjust for inflation annually)'' after 
     ``$1,000,000,''.
       (d) Limitation on Size of Awards.--Section 9 of the Small 
     Business Act (15 U.S.C. 638) is amended by adding at the end 
     the following:
       ``(aa) Limitation on Size of Awards.--
       ``(1) Limitation.--No Federal agency may issue an award 
     under the SBIR program or the STTR program if the size of the 
     award exceeds the award guidelines established under this 
     section by more than 50 percent.
       ``(2) Maintenance of information.--Participating agencies 
     shall maintain information on awards exceeding the guidelines 
     established under this section, including--
       ``(A) the amount of each award;
       ``(B) a justification for exceeding the award amount;
       ``(C) the identity and location of each award recipient; 
     and
       ``(D) whether an award recipient has received any venture 
     capital investment and, if so, whether the recipient is 
     majority-owned by multiple venture capital operating 
     companies.
       ``(3) Reports.--The Administrator shall include the 
     information described in paragraph (2) in the annual report 
     of the Administrator to Congress.
       ``(4) Rule of construction.--Nothing in this subsection 
     shall be construed to prevent a Federal agency from 
     supplementing an award under the SBIR program or the STTR 
     program using funds of the Federal agency that are not part 
     of the SBIR program or the STTR program of the Federal 
     agency.''.

     SEC. 106. AGENCY AND PROGRAM FLEXIBILITY.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(bb) Subsequent Phase II Awards.--
       ``(1) Agency flexibility.--A small business concern that 
     received an award from a Federal agency under this section 
     shall be eligible to receive a subsequent Phase II award from 
     another Federal agency, if the head of each relevant Federal 
     agency or the relevant component of the Federal agency makes 
     a written determination that the topics of the relevant 
     awards are the same and both agencies report the awards to 
     the Administrator for inclusion in the public database under 
     subsection (k).
       ``(2) SBIR and sttr program flexibility.--A small business 
     concern that received an award under this section under the 
     SBIR program or the STTR program may receive a subsequent 
     Phase II award in either the SBIR program or the STTR program 
     and the participating agency or agencies shall report the 
     awards to the Administrator for inclusion in the public 
     database under subsection (k).
       ``(3) Preventing duplicative awards.--Before making an 
     award under paragraph (1) or (2), the head of a Federal 
     agency shall verify that the project to be performed with the 
     award has not been funded under the SBIR program or STTR 
     program of another Federal agency.''.

     SEC. 107. ELIMINATION OF PHASE II INVITATIONS.

       (a) In General.--Section 9(e) of the Small Business Act (15 
     U.S.C. 638(e)) is amended--
       (1) in paragraph (4)(B), by striking ``to further'' and 
     inserting: ``which shall not include any invitation, pre-
     screening, pre-selection, or down-selection process for 
     eligibility for the second phase, that will further''; and
       (2) in paragraph (6)(B), by striking ``to further develop 
     proposed ideas to'' and inserting ``which shall not include 
     any invitation, pre-screening, pre-selection, or down-
     selection process for eligibility for the second phase, that 
     will further develop proposals that''.

     SEC. 108. PARTICIPATION BY FIRMS WITH SUBSTANTIAL INVESTMENT 
                   FROM MULTIPLE VENTURE CAPITAL OPERATING 
                   COMPANIES IN A PORTION OF THE SBIR PROGRAM.

       (a) In General.--Section 9 of the Small Business Act (15 
     U.S.C. 638), as amended by this Act, is amended by adding at 
     the end the following:

[[Page 4002]]

       ``(cc) Participation of Small Business Concerns Majority-
     Owned by Venture Capital Operating Companies in the SBIR 
     Program.--
       ``(1) Authority.--Upon a written determination described in 
     paragraph (2) provided to the Administrator and to the 
     Committee on Small Business and Entrepreneurship of the 
     Senate and the Committee on Small Business of the House of 
     Representatives not later than 30 days before the date on 
     which an award is made--
       ``(A) the Director of the National Institutes of Health, 
     the Secretary of Energy, and the Director of the National 
     Science Foundation may award not more than 25 percent of the 
     funds allocated for the SBIR program of the Federal agency to 
     small business concerns that are owned in majority part by 
     multiple venture capital operating companies through 
     competitive, merit-based procedures that are open to all 
     eligible small business concerns; and
       ``(B) the head of a Federal agency other than a Federal 
     agency described in subparagraph (A) that participates in the 
     SBIR program may award not more than 15 percent of the funds 
     allocated for the SBIR program of the Federal agency to small 
     business concerns that are owned in majority part by multiple 
     venture capital operating companies through competitive, 
     merit-based procedures that are open to all eligible small 
     business concerns.
       ``(2) Determination.--A written determination described in 
     this paragraph is a written determination by the head of a 
     Federal agency that explains how the use of the authority 
     under paragraph (1) will--
       ``(A) induce additional venture capital funding of small 
     business innovations;
       ``(B) substantially contribute to the mission of the 
     Federal agency;
       ``(C) demonstrate a need for public research; and
       ``(D) otherwise fulfill the capital needs of small business 
     concerns for additional financing for the SBIR project.
       ``(3) Registration.--A small business concern that is 
     majority-owned by multiple venture capital operating 
     companies and qualified for participation in the program 
     authorized under paragraph (1) shall--
       ``(A) register with the Administrator on the date that the 
     small business concern submits an application for an award 
     under the SBIR program; and
       ``(B) indicate in any SBIR proposal that the small business 
     concern is registered under subparagraph (A) as majority-
     owned by multiple venture capital operating companies.
       ``(4) Compliance.--
       ``(A) In general.--The head of a Federal agency that makes 
     an award under this subsection during a fiscal year shall 
     collect and submit to the Administrator data relating to the 
     number and dollar amount of Phase I awards, Phase II awards, 
     and any other category of awards by the Federal agency under 
     the SBIR program during that fiscal year.
       ``(B) Annual reporting.--The Administrator shall include as 
     part of each annual report by the Administration under 
     subsection (b)(7) any data submitted under subparagraph (A) 
     and a discussion of the compliance of each Federal agency 
     that makes an award under this subsection during the fiscal 
     year with the maximum percentages under paragraph (1).
       ``(5) Enforcement.--If a Federal agency awards more than 
     the percent of the funds allocated for the SBIR program of 
     the Federal agency authorized under paragraph (1) for a 
     purpose described in paragraph (1), the head of the Federal 
     agency shall transfer an amount equal to the amount awarded 
     in excess of the amount authorized under paragraph (1) to the 
     funds for general SBIR programs from the non-SBIR and non-
     STTR research and development funds of the Federal agency not 
     later than 180 days after the date on which the Federal 
     agency made the award that caused the total awarded under 
     paragraph (1) to be more than the amount authorized under 
     paragraph (1) for a purpose described in paragraph (1).
       ``(6) Final decisions on applications under the sbir 
     program.--
       ``(A) Definition.--In this paragraph, the term `covered 
     small business concern' means a small business concern that--
       ``(i) was not majority-owned by multiple venture capital 
     operating companies on the date on which the small business 
     concern submitted an application in response to a 
     solicitation under the SBIR programs; and
       ``(ii) on the date of the award under the SBIR program is 
     majority-owned by multiple venture capital operating 
     companies.
       ``(B) In general.--If a Federal agency does not make an 
     award under a solicitation under the SBIR program before the 
     date that is 9 months after the date on which the period for 
     submitting applications under the solicitation ends--
       ``(i) a covered small business concern is eligible to 
     receive the award, without regard to whether the covered 
     small business concern meets the requirements for receiving 
     an award under the SBIR program for a small business concern 
     that is majority-owned by multiple venture capital operating 
     companies, if the covered small business concern meets all 
     other requirements for such an award; and
       ``(ii) the head of the Federal agency shall transfer an 
     amount equal to any amount awarded to a covered small 
     business concern under the solicitation to the funds for 
     general SBIR programs from the non-SBIR and non-STTR research 
     and development funds of the Federal agency, not later than 
     90 days after the date on which the Federal agency makes the 
     award.
       ``[(6)](7) Evaluation criteria.--A Federal agency may not 
     use investment of venture capital as a criterion for the 
     award of contracts under the SBIR program or STTR program.
       (b) Technical and Conforming Amendment.--Section 3 of the 
     Small Business Act (15 U.S.C. 632) is amended by adding at 
     the end the following:
       ``(aa) Venture Capital Operating Company.--In this Act, the 
     term `venture capital operating company' means an entity 
     described in clause (i), (v), or (vi) of section 
     121.103(b)(5) of title 13, Code of Federal Regulations (or 
     any successor thereto).''.
       (c) Rulemaking To Ensure That Firms That Are Majority-Owned 
     by Multiple Venture Capital Operating Companies Are Able To 
     Participate in a Portion of the SBIR Program.--
       (1) Statement of congressional intent.--It is the stated 
     intent of Congress that the Administrator should promulgate 
     regulations to carry out the authority under section 9(cc) of 
     the Small Business Act, as added by this section, that--
       (A) permit small business concerns that are majority-owned 
     by multiple venture capital operating companies to 
     participate in the SBIR program in accordance with section 
     9(cc) of the Small Business Act;
       (B) provide specific guidance for small business concerns 
     that are majority-owned by multiple venture capital operating 
     companies with regard to eligibility, participation, and 
     affiliation rules; and
       (C) preserve and maintain the integrity of the SBIR program 
     as a program for small business concerns in the United 
     States, prohibiting large businesses or large entities or 
     foreign-owned businesses or entities from participation in 
     the program established under section 9 of the Small Business 
     Act.
       (2) Rulemaking required.--
       (A) Proposed regulations.--Not later than 4 months after 
     the date of enactment of this Act, the Administrator shall 
     issue proposed regulations to amend section 121.103 (relating 
     to determinations of affiliation applicable to the SBIR 
     program) and section 121.702 (relating to ownership and 
     control standards and size standards applicable to the SBIR 
     program) of title 13, Code of Federal Regulations, for firms 
     that are majority-owned by multiple venture capital operating 
     companies and participating in the SBIR program solely under 
     the authority under section 9(cc) of the Small Business Act, 
     as added by this section.
       (B) Final regulations.--Not later than 1 year after the 
     date of enactment of this Act, and after providing notice of 
     and opportunity for comment on the proposed regulations 
     issued under subparagraph (A), the Administrator shall issue 
     final or interim final regulations under this subsection.
       (3) Contents.--
       (A) In general.--The regulations issued under this 
     subsection shall permit the participation of applicants 
     majority-owned by multiple venture capital operating 
     companies in the SBIR program in accordance with section 
     9(cc) of the Small Business Act, as added by this section, 
     unless the Administrator determines--
       (i) in accordance with the size standards established under 
     subparagraph (B), that the applicant is--

       (I) a large business or large entity; or
       (II) majority-owned or controlled by a large business or 
     large entity; or

       (ii) in accordance with the criteria established under 
     subparagraph (C), that the applicant--

       (I) is a foreign business or a foreign entity or is not a 
     citizen of the United States or alien lawfully admitted for 
     permanent residence; or
       (II) is majority-owned or controlled by a foreign business, 
     foreign entity, or person who is not a citizen of the United 
     States or alien lawfully admitted for permanent residence.

       (B) Size standards.--Under the authority to establish size 
     standards under paragraphs (2) and (3) of section 3(a) of the 
     Small Business Act (15 U.S.C. 632(a)), the Administrator 
     shall, in accordance with paragraph (1) of this subsection, 
     establish size standards for applicants seeking to 
     participate in the SBIR program solely under the authority 
     under section 9(cc) of the Small Business Act, as added by 
     this section.
       (C) Criteria for determining foreign ownership.--The 
     Administrator shall establish criteria for determining 
     whether an applicant meets the requirements under 
     subparagraph (A)(ii), and, in establishing the criteria, 
     shall consider whether the criteria should include--
       (i) whether the applicant is at least 51 percent owned or 
     controlled by citizens of the United States or domestic 
     venture capital operating companies;
       (ii) whether the applicant is domiciled in the United 
     States; and
       (iii) whether the applicant is a direct or indirect 
     subsidiary of a foreign-owned firm, including whether the 
     criteria should include

[[Page 4003]]

     that an applicant is a direct or indirect subsidiary of a 
     foreign-owned entity if--

       (I) any venture capital operating company that owns more 
     than 20 percent of the applicant is a direct or indirect 
     subsidiary of a foreign-owned entity; or
       (II) in the aggregate, entities that are direct or indirect 
     subsidiaries of foreign-owned entities own more than 49 
     percent of the applicant.

       (D) Criteria for determining affiliation.--The 
     Administrator shall establish criteria, in accordance with 
     paragraph (1), for determining whether an applicant is 
     affiliated with a venture capital operating company or any 
     other business that the venture capital operating company has 
     financed and, in establishing the criteria, shall specify 
     that--
       (i) if a venture capital operating company that is 
     determined to be affiliated with an applicant is a minority 
     investor in the applicant, the portfolio companies of the 
     venture capital operating company shall not be determined to 
     be affiliated with the applicant, unless--

       (I) the venture capital operating company owns a majority 
     of the portfolio company; or
       (II) the venture capital operating company holds a majority 
     of the seats on the board of directors of the portfolio 
     company;

       (ii) subject to clause (i), the Administrator retains the 
     authority to determine whether a venture capital operating 
     company is affiliated with an applicant, including 
     establishing other criteria;
       (iii) the Administrator may not determine that a portfolio 
     company of a venture capital operating company is affiliated 
     with an applicant based solely on one or more shared 
     investors; and
       (iv) subject to clauses (i), (ii), and (iii), the 
     Administrator retains the authority to determine whether a 
     portfolio company of a venture capital operating company is 
     affiliated with an applicant based on factors independent of 
     whether there is a shared investor, such as whether there are 
     contractual obligations between the portfolio company and the 
     applicant.
       (4) Enforcement.--If the Administrator does not issue final 
     or interim final regulations under this subsection on or 
     before the date that is 1 year after the date of enactment of 
     this Act, the Administrator may not carry out any activities 
     under section 4(h) of the Small Business Act (15 U.S.C. 
     633(h)) (as continued in effect pursuant to the Act entitled 
     ``An Act to extend temporarily certain authorities of the 
     Small Business Administration'', approved October 10, 2006 
     (Public Law 109-316; 120 Stat. 1742)) during the period 
     beginning on the date that is 1 year and 1 day after the date 
     of enactment of this Act, and ending on the date on which the 
     final or interim final regulations are issued.
       (5) Definition.--In this subsection, the term ``venture 
     capital operating company'' has the same meaning as in 
     section 3(aa) of the Small Business Act, as added by this 
     section.
       (d) Assistance for Determining Affiliates.--
       (1) Clear explanation required.--Not later than 30 days 
     after the date of enactment of this Act, the Administrator 
     shall post on the Web site of the Administration (with a 
     direct link displayed on the homepage of the Web site of the 
     Administration or the SBIR and STTR Web sites of the 
     Administration)--
       (A) a clear explanation of the SBIR and STTR affiliation 
     rules under part 121 of title 13, Code of Federal 
     Regulations; and
       (B) contact information for officers or employees of the 
     Administration who--
       (i) upon request, shall review an issue relating to the 
     rules described in subparagraph (A); and
       (ii) shall respond to a request under clause (i) not later 
     than 20 business days after the date on which the request is 
     received.
       (2) Inclusion of affiliation rules for certain small 
     business concerns.--On and after the date on which the final 
     regulations under subsection (c) are issued, the 
     Administrator shall post on the Web site of the 
     Administration information relating to the regulations, in 
     accordance with paragraph (1).

     SEC. 109. SBIR AND STTR SPECIAL ACQUISITION PREFERENCE.

       Section 9(r) of the Small Business Act (15 U.S.C. 638(r)) 
     is amended by adding at the end the following:
       ``(4) Phase iii awards.--To the greatest extent 
     practicable, Federal agencies and Federal prime contractors 
     shall issue Phase III awards relating to technology, 
     including sole source awards, to the SBIR and STTR award 
     recipients that developed the technology.''.

     SEC. 110. COLLABORATING WITH FEDERAL LABORATORIES AND 
                   RESEARCH AND DEVELOPMENT CENTERS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(dd) Collaborating With Federal Laboratories and Research 
     and Development Centers.--
       ``(1) Authorization.--Subject to the limitations under this 
     section, the head of each participating Federal agency may 
     make SBIR and STTR awards to any eligible small business 
     concern that--
       ``(A) intends to enter into an agreement with a Federal 
     laboratory or federally funded research and development 
     center for portions of the activities to be performed under 
     that award; or
       ``(B) has entered into a cooperative research and 
     development agreement (as defined in section 12(d) of the 
     Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 
     3710a(d))) with a Federal laboratory.
       ``(2) Prohibition.--No Federal agency shall--
       ``(A) condition an SBIR or STTR award upon entering into 
     agreement with any Federal laboratory or any federally funded 
     laboratory or research and development center for any portion 
     of the activities to be performed under that award;
       ``(B) approve an agreement between a small business concern 
     receiving a SBIR or STTR award and a Federal laboratory or 
     federally funded laboratory or research and development 
     center, if the small business concern performs a lesser 
     portion of the activities to be performed under that award 
     than required by this section and by the SBIR Policy 
     Directive and the STTR Policy Directive of the Administrator; 
     or
       ``(C) approve an agreement that violates any provision, 
     including any data rights protections provision, of this 
     section or the SBIR and the STTR Policy Directives.
       ``(3) Implementation.--Not later than 180 days after the 
     date of enactment of this subsection, the Administrator shall 
     modify the SBIR Policy Directive and the STTR Policy 
     Directive issued under this section to ensure that small 
     business concerns--
       ``(A) have the flexibility to use the resources of the 
     Federal laboratories and federally funded research and 
     development centers; and
       ``(B) are not mandated to enter into agreement with any 
     Federal laboratory or any federally funded laboratory or 
     research and development center as a condition of an 
     award.''.

     SEC. 111. NOTICE REQUIREMENT.

       (a) SBIR Program.--Section 9(g) of the Small Business Act 
     (15 U.S.C. 638(g)) is amended--
       (1) in paragraph (10), by striking ``and'' at the end;
       (2) in paragraph (11), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following:
       ``(12) provide timely notice to the Administrator of any 
     case or controversy before any Federal judicial or 
     administrative tribunal concerning the SBIR program of the 
     Federal agency; and''.
       (b) STTR Program.--Section 9(o) of the Small Business Act 
     (15 U.S.C. 638(o)) is amended--
       (1) by striking paragraph (15);
       (2) in paragraph (16), by striking the period at the end 
     and inserting ``; and'';
       (3) by redesignating paragraph (16) as paragraph (15); and
       (4) by adding at the end the following:
       ``(16) provide timely notice to the Administrator of any 
     case or controversy before any Federal judicial or 
     administrative tribunal concerning the STTR program of the 
     Federal agency.''.

     SEC. 112. EXPRESS AUTHORITY FOR AN AGENCY TO AWARD SEQUENTIAL 
                   PHASE II AWARDS FOR SBIR OR STTR FUNDED 
                   PROJECTS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(ee) Additional Phase II SBIR and STTR Awards.--A small 
     business concern that receives a Phase II SBIR award or a 
     Phase II STTR award for a project remains eligible to receive 
     an additional Phase II SBIR award or Phase II STTR award for 
     that project.''.

          TITLE II--OUTREACH AND COMMERCIALIZATION INITIATIVES

     SEC. 201. RURAL AND STATE OUTREACH.

       (a) In General.--Section 9 of the Small Business Act (15 
     U.S.C. 638) is amended by inserting after subsection (r) the 
     following:
       ``(s) Federal and State Technology Partnership Program.--
       ``(1) Definitions.--In this subsection, the following 
     definitions apply:
       ``(A) Applicant.--The term `applicant' means an entity, 
     organization, or individual that submits a proposal for an 
     award or a cooperative agreement under this subsection.
       ``(B) FAST program.--The term `FAST program' means the 
     Federal and State Technology Partnership Program established 
     under this subsection.
       ``(C) Recipient.--The term `recipient' means a person that 
     receives an award or becomes party to a cooperative agreement 
     under this subsection.
       ``(D) State.--The term `State' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, and American Samoa.
       ``(E) Definitions relating to mentoring networks.--The 
     terms `business advice and counseling', `mentor', and 
     `mentoring network' have the meanings given those terms in 
     section 34(e).
       ``(2) Establishment of program.--The Administrator shall 
     establish a program to be known as the Federal and State 
     Technology Partnership Program, the purpose of which shall be 
     to strengthen the technological competitiveness of small 
     business concerns in the States.
       ``(3) Grants and cooperative agreements.--

[[Page 4004]]

       ``(A) Joint review.--In carrying out the FAST program, the 
     Administrator and the program managers for the SBIR program 
     and STTR program at the National Science Foundation, the 
     Department of Defense, and any other Federal agency 
     determined appropriate by the Administrator shall jointly 
     review proposals submitted by applicants and may make awards 
     or enter into cooperative agreements under this subsection 
     based on the factors for consideration set forth in 
     subparagraph (B), in order to enhance or develop in a State--
       ``(i) technology research and development by small business 
     concerns;
       ``(ii) technology transfer from university research to 
     technology-based small business concerns;
       ``(iii) technology deployment and diffusion benefitting 
     small business concerns;
       ``(iv) the technological capabilities of small business 
     concerns through the establishment or operation of consortia 
     comprised of entities, organizations, or individuals, 
     including--

       ``(I) State and local development agencies and entities;
       ``(II) representatives of technology-based small business 
     concerns;
       ``(III) industries and emerging companies;
       ``(IV) universities; and
       ``(V) small business development centers; and

       ``(v) outreach, financial support, and technical assistance 
     to technology-based small business concerns participating in 
     or interested in participating in an SBIR program or STTR 
     program, including initiatives--

       ``(I) to make grants or loans to companies to pay a portion 
     or all of the cost of developing SBIR or STTR proposals;
       ``(II) to establish or operate a Mentoring Network within 
     the FAST program to provide business advice and counseling 
     that will assist small business concerns that have been 
     identified by FAST program participants, program managers of 
     participating SBIR agencies, the Administration, or other 
     entities that are knowledgeable about the SBIR and STTR 
     programs as good candidates for the SBIR and STTR programs, 
     and that would benefit from mentoring, in accordance with 
     section 34;
       ``(III) to create or participate in a training program for 
     individuals providing SBIR or STTR outreach and assistance at 
     the State and local levels; and
       ``(IV) to encourage the commercialization of technology 
     developed through funding under the SBIR program or the STTR 
     program.

       ``(B) Selection considerations.--In making awards or 
     entering into cooperative agreements under this subsection, 
     the Administrator and the program managers referred to in 
     subparagraph (A)--
       ``(i) may only consider proposals by applicants that intend 
     to use a portion of the Federal assistance provided under 
     this subsection to provide outreach, financial support, or 
     technical assistance to technology-based small business 
     concerns participating in or interested in participating in 
     the SBIR program or STTR program; and
       ``(ii) shall consider, at a minimum--

       ``(I) whether the applicant has demonstrated that the 
     assistance to be provided would address unmet needs of small 
     business concerns in the community, and whether it is 
     important to use Federal funding for the proposed activities;
       ``(II) whether the applicant has demonstrated that a need 
     exists to increase the number or success of small high-
     technology businesses in the State or an area of the State, 
     as measured by the number of Phase I and Phase II SBIR awards 
     that have historically been received by small business 
     concerns in the State or area of the State;
       ``(III) whether the projected costs of the proposed 
     activities are reasonable;
       ``(IV) whether the proposal integrates and coordinates the 
     proposed activities with other State and local programs 
     assisting small high-technology firms in the State;
       ``(V) the manner in which the applicant will measure the 
     results of the activities to be conducted; and
       ``(VI) whether the proposal addresses the needs of small 
     business concerns--

       ``(aa) owned and controlled by women;
       ``(bb) that are socially and economically disadvantaged 
     small business concerns (as defined in section 8(a)(4)(A));
       ``(cc) that are HUBZone small business concerns;
       ``(dd) located in areas that have historically not 
     participated in the SBIR and STTR programs;
       ``(ee) owned and controlled by service-disabled veterans;
       ``(ff) owned and controlled by Native Americans; and
       ``(gg) located in geographic areas with an unemployment 
     rate that exceeds the national unemployment rate, based on 
     the most recently available monthly publications of the 
     Bureau of Labor Statistics of the Department of Labor.
       ``(C) Proposal limit.--Not more than 1 proposal may be 
     submitted for inclusion in the FAST program under this 
     subsection to provide services in any one State in any 1 
     fiscal year.
       ``(D) Process.--Proposals and applications for assistance 
     under this subsection shall be in such form and subject to 
     such procedures as the Administrator shall establish. The 
     Administrator shall promulgate regulations establishing 
     standards for the consideration of proposals under 
     subparagraph (B), including standards regarding each of the 
     considerations identified in subparagraph (B)(ii).
       ``(4) Cooperation and coordination.--In carrying out the 
     FAST program, the Administrator shall cooperate and 
     coordinate with--
       ``(A) Federal agencies required by this section to have an 
     SBIR program; and
       ``(B) entities, organizations, and individuals actively 
     engaged in enhancing or developing the technological 
     capabilities of small business concerns, including--
       ``(i) State and local development agencies and entities;
       ``(ii) State committees established under the Experimental 
     Program to Stimulate Competitive Research of the National 
     Science Foundation (as established under section 113 of the 
     National Science Foundation Authorization Act of 1988 (42 
     U.S.C. 1862g));
       ``(iii) State science and technology councils; and
       ``(iv) representatives of technology-based small business 
     concerns.
       ``(5) Administrative requirements.--
       ``(A) Competitive basis.--Awards and cooperative agreements 
     under this subsection shall be made or entered into, as 
     applicable, on a competitive basis.
       ``(B) Matching requirements.--
       ``(i) In general.--The non-Federal share of the cost of an 
     activity (other than a planning activity) carried out using 
     an award or under a cooperative agreement under this 
     subsection shall be--

       ``(I) except as provided in clause (iii), 35 cents for each 
     Federal dollar, in the case of a recipient that will serve 
     small business concerns located in 1 of the 18 States 
     receiving the fewest Phase I SBIR awards;
       ``(II) except as provided in clause (ii) or (iii), 1 dollar 
     for each Federal dollar, in the case of a recipient that will 
     serve small business concerns located in 1 of the 16 States 
     receiving the greatest number of Phase I SBIR awards; and
       ``(III) except as provided in clause (ii) or (iii), 50 
     cents for each Federal dollar, in the case of a recipient 
     that will serve small business concerns located in a State 
     that is not described in subclause (I) or (II) that is 
     receiving Phase I SBIR awards.

       ``(ii) Low-income areas.--The non-Federal share of the cost 
     of the activity carried out using an award or under a 
     cooperative agreement under this subsection shall be 35 cents 
     for each Federal dollar that will be directly allocated by a 
     recipient described in clause (i) to serve small business 
     concerns located in a qualified census tract, as that term is 
     defined in section 42(d)(5)(B)(ii)(I) of the Internal Revenue 
     Code of 1986. Federal dollars not so allocated by that 
     recipient shall be subject to the matching requirements of 
     clause (i).
       ``(iii) Rural areas.--

       ``(I) In general.--Except as provided in subclause (II), 
     the non-Federal share of the cost of the activity carried out 
     using an award or under a cooperative agreement under this 
     subsection shall be 35 cents for each Federal dollar that 
     will be directly allocated by a recipient described in clause 
     (i) to serve small business concerns located in a rural area.
       ``(II) Enhanced rural awards.--For a recipient located in a 
     rural area that is located in a State described in clause 
     (i)(I), the non-Federal share of the cost of the activity 
     carried out using an award or under a cooperative agreement 
     under this subsection shall be 15 cents for each Federal 
     dollar that will be directly allocated by a recipient 
     described in clause (i) to serve small business concerns 
     located in the rural area.
       ``(III) Definition of rural area.--In this clause, the term 
     `rural area' has the meaning given that term in section 
     1393(a)(2) of the Internal Revenue Code of 1986.

       ``(iv) Types of funding.--The non-Federal share of the cost 
     of an activity carried out by a recipient shall be comprised 
     of not less than 50 percent cash and not more than 50 percent 
     of indirect costs and in-kind contributions, except that no 
     such costs or contributions may be derived from funds from 
     any other Federal program.
       ``(v) Rankings.--For the first full fiscal year after the 
     date of enactment of the SBIR/STTR Reauthorization Act of 
     2011, and each fiscal year thereafter, based on the 
     statistics for the most recent full fiscal year for which the 
     Administrator has compiled statistics, the Administrator 
     shall reevaluate the ranking of each State for purposes of 
     clause (i).
       ``(C) Duration.--Awards may be made or cooperative 
     agreements entered into under this subsection for multiple 
     years, not to exceed 5 years in total.
       ``(6) Annual reports.--The Administrator shall submit an 
     annual report to the Committee on Small Business of the 
     Senate and the Committee on Science and the Committee on 
     Small Business of the House of Representatives regarding--
       ``(A) the number and amount of awards provided and 
     cooperative agreements entered into under the FAST program 
     during the preceding year;

[[Page 4005]]

       ``(B) a list of recipients under this subsection, including 
     their location and the activities being performed with the 
     awards made or under the cooperative agreements entered into; 
     and
       ``(C) the Mentoring Networks and the mentoring database, as 
     provided for under section 34, including--
       ``(i) the status of the inclusion of mentoring information 
     in the database required by subsection (k); and
       ``(ii) the status of the implementation and description of 
     the usage of the Mentoring Networks.
       ``(7) Program levels.--
       ``(A) In general.--There is authorized to be appropriated 
     to carry out the FAST program, including Mentoring Networks, 
     under this subsection and section 34, $15,000,000 for each of 
     fiscal years 2011 through 2016.
       ``(B) Mentoring database.--Of the total amount made 
     available under subparagraph (A) for fiscal years 2011 
     through 2016, a reasonable amount, not to exceed a total of 
     $500,000, may be used by the Administration to carry out 
     section 34(d).
       ``(8) Termination.--The authority to carry out the FAST 
     program under this subsection shall terminate on September 
     30, 2016.''.
       (b) Technical and Conforming Amendments.--The Small 
     Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) by striking section 34 (15 U.S.C. 657d);
       (2) by redesignating sections 35 through 43 as sections 34 
     through 42, respectively;
       (3) in section 9(k)(1)(D) (15 U.S.C. 638(k)(1)(D)), by 
     striking ``section 35(d)'' and inserting ``section 34(d)'';
       (4) in section 34 (15 U.S.C. 657e), as so redesignated--
       (A) in subsection (c)(1), by striking ``section 
     34(c)(1)(E)(ii)'' and inserting ``section 
     9(s)(3)(A)(v)(II)'';
       (B) by striking ``section 34'' each place it appears and 
     inserting ``section 9(s)''; and
       (C) by adding at the end the following:
       ``(e) Definitions.--In this section, the following 
     definitions apply:
       ``(1) Business advice and counseling.--The term `business 
     advice and counseling' means providing advice and assistance 
     on matters described in subsection (c)(2)(B) to small 
     business concerns to guide them through the SBIR and STTR 
     program process, from application to award and successful 
     completion of each phase of the program.
       ``(2) FAST program.--The term `FAST program' means the 
     Federal and State Technology Partnership Program established 
     under section 9(s).
       ``(3) Mentor.--The term `mentor' means an individual 
     described in subsection (c)(2).
       ``(4) Mentoring network.--The term `Mentoring Network' 
     means an association, organization, coalition, or other 
     entity (including an individual) that meets the requirements 
     of subsection (c).
       ``(5) Recipient.--The term `recipient' means a person that 
     receives an award or becomes party to a cooperative agreement 
     under this section.
       ``(6) SBIR program.--The term `SBIR program' has the same 
     meaning as in section 9(e)(4).
       ``(7) State.--The term `State' means each of the several 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the Virgin Islands, Guam, and American Samoa.
       ``(8) STTR program.--The term `STTR program' has the same 
     meaning as in section 9(e)(6).'';
       (5) in section 36(d) (15 U.S.C. 657i(d)), as so 
     redesignated, by striking ``section 43'' and inserting 
     ``section 42'';
       (6) in section 39(d) (15 U.S.C. 657l(d)), as so 
     redesignated, by striking ``section 43'' and inserting 
     ``section 42''; and
       (7) in section 40(b) (15 U.S.C. 657m(b)), as so 
     redesignated, by striking ``section 43'' and inserting 
     ``section 42''.

     [SEC. 202. SBIR-STEM WORKFORCE DEVELOPMENT GRANT PILOT 
                   PROGRAM.

       [(a) Pilot Program Established.--From amounts made 
     available to carry out this section, the Administrator shall 
     establish a SBIR-STEM Workforce Development Grant Pilot 
     Program to encourage the business community to provide 
     workforce development opportunities for college students, in 
     the fields of science, technology, engineering, and math (in 
     this section referred to as ``STEM college students''), 
     particularly those that are socially and economically 
     disadvantaged individuals, from rural areas, or from areas 
     with high unemployment, as determined by the Administrator, 
     by providing a SBIR bonus grant.
       [(b) Eligible Entities Defined.--In this section the term 
     ``eligible entity'' means a grantee receiving a grant under 
     the SBIR Program on the date of the bonus grant under 
     subsection (a) that provides an internship program for STEM 
     college students.
       [(c) Awards.--An eligible entity shall receive a bonus 
     grant equal to 10 percent of either a Phase I or Phase II 
     grant, as applicable, with a total award maximum of not more 
     than $10,000 per year.
       [(d) Evaluation.--Following the fourth year of funding 
     under this section, the Administrator shall submit to 
     Congress as part of the report under section 9(b)(7) of the 
     Small Business Act (15 U.S.C. 638(b)(7)) the results of the 
     SBIR-STEM Workforce Development Grant Pilot Program.
       [(e) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this section--
       [(1) $1,000,000 for fiscal year 2012;
       [(2) $1,000,000 for fiscal year 2013;
       [(3) $1,000,000 for fiscal year 2014;
       [(4) $1,000,000 for fiscal year 2015; and
       [(5) $1,000,000 for fiscal year 2016.]

     SEC. [203]202. TECHNICAL ASSISTANCE FOR AWARDEES.

       Section 9(q) of the Small Business Act (15 U.S.C. 638(q)) 
     is amended--
       (1) in paragraph (1)--
       (A) by inserting ``or STTR program'' after ``SBIR 
     program''; and
       (B) by striking ``SBIR projects'' and inserting ``SBIR or 
     STTR projects'';
       (2) in paragraph (2), by striking ``3 years'' and inserting 
     ``5 years''; and
       (3) in paragraph (3)--
       (A) in subparagraph (A)--
       (i) by inserting ``or STTR'' after ``SBIR''; and
       (ii) by striking ``$4,000'' and inserting ``$5,000'';
       (B) by striking subparagraph (B) and inserting the 
     following:
       ``(B) Phase ii.--A Federal agency described in paragraph 
     (1) may--
       ``(i) provide to the recipient of a Phase II SBIR or STTR 
     award, through a vendor selected under paragraph (2), the 
     services described in paragraph (1), in an amount equal to 
     not more than $5,000 per year; or
       ``(ii) authorize the recipient of a Phase II SBIR or STTR 
     award to purchase the services described in paragraph (1), in 
     an amount equal to not more than $5,000 per year, which shall 
     be in addition to the amount of the recipient's award.''; and
       (C) by adding at the end the following:
       ``(C) Flexibility.--In carrying out subparagraphs (A) and 
     (B), each Federal agency shall provide the allowable amounts 
     to a recipient that meets the eligibility requirements under 
     the applicable subparagraph, if the recipient requests to 
     seek technical assistance from an individual or entity other 
     than the vendor selected under paragraph (2) by the Federal 
     agency.
       ``(D) Limitation.--A Federal agency may not--
       ``(i) use the amounts authorized under subparagraph (A) or 
     (B) unless the vendor selected under paragraph (2) provides 
     the technical assistance to the recipient; or
       ``(ii) enter a contract with a vendor under paragraph (2) 
     under which the amount provided for technical assistance is 
     based on total number of Phase I or Phase II awards.''.

     SEC. [204]203. COMMERCIALIZATION READINESS PROGRAM AT 
                   DEPARTMENT OF DEFENSE.

       (a) In General.--Section 9(y) of the Small Business Act (15 
     U.S.C. 638(y)) is amended--
       (1) in the subsection heading, by striking ``Pilot'' and 
     inserting ``Readiness'';
       (2) by striking ``Pilot'' each place that term appears and 
     inserting ``Readiness'';
       (3) in paragraph (1)--
       (A) by inserting ``or Small Business Technology Transfer 
     Program'' after ``Small Business Innovation Research 
     Program''; and
       (B) by adding at the end the following: ``The authority to 
     create and administer a Commercialization Readiness Program 
     under this subsection may not be construed to eliminate or 
     replace any other SBIR program or STTR program that enhances 
     the insertion or transition of SBIR or STTR technologies, 
     including any such program in effect on the date of enactment 
     of the National Defense Authorization Act for Fiscal Year 
     2006 (Public Law 109-163; 119 Stat. 3136).'';
       (4) in paragraph (2), by inserting ``or Small Business 
     Technology Transfer Program'' after ``Small Business 
     Innovation Research Program'';
       (5) by striking paragraphs (5) and (6); and
       (6) by inserting after paragraph (4) the following:
       ``(5) Insertion incentives.--For any contract with a value 
     of not less than $100,000,000, the Secretary of Defense is 
     authorized to--
       ``(A) establish goals for the transition of Phase III 
     technologies in subcontracting plans; and
       ``(B) require a prime contractor on such a contract to 
     report the number and dollar amount of contracts entered into 
     by that prime contractor for Phase III SBIR or STTR projects.
       ``(6) Goal for sbir and sttr technology insertion.--The 
     Secretary of Defense shall--
       ``(A) set a goal to increase the number of Phase II SBIR 
     contracts and the number of Phase II STTR contracts awarded 
     by that Secretary that lead to technology transition into 
     programs of record or fielded systems;
       ``(B) use incentives in effect on the date of enactment of 
     the SBIR/STTR Reauthorization Act of 2011, or create new 
     incentives, to encourage agency program managers and prime 
     contractors to meet the goal under subparagraph (A); and
       ``(C) include in the annual report to Congress the 
     percentage of contracts described in subparagraph (A) awarded 
     by that Secretary, and information on the ongoing status of 
     projects funded through the Commercialization Readiness 
     Program and efforts to transition these technologies into 
     programs of record or fielded systems.''.
       (b) Technical and Conforming Amendment.--Section 9(i)(1) of 
     the Small Business

[[Page 4006]]

     Act (15 U.S.C. 638(i)(1)) is amended by inserting 
     ``(including awards under subsection (y))'' after ``the 
     number of awards''.

     SEC. [205]204. COMMERCIALIZATION READINESS PILOT PROGRAM FOR 
                   CIVILIAN AGENCIES.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(ff) Pilot Program.--
       ``(1) Authorization.--The head of each covered Federal 
     agency may allocate not more than 10 percent of the funds 
     allocated to the SBIR program and the STTR program of the 
     covered Federal agency--
       ``(A) for awards for technology development, testing, and 
     evaluation of SBIR and STTR Phase II technologies; or
       ``(B) to support the progress of research or research and 
     development conducted under the SBIR or STTR programs to 
     Phase III.
       ``(2) Application by federal agency.--
       ``(A) In general.--A covered Federal agency may not 
     establish a pilot program unless the covered Federal agency 
     makes a written application to the Administrator, not later 
     than 90 days before to the first day of the fiscal year in 
     which the pilot program is to be established, that describes 
     a compelling reason that additional investment in SBIR or 
     STTR technologies is necessary, including unusually high 
     regulatory, systems integration, or other costs relating to 
     development or manufacturing of identifiable, highly 
     promising small business technologies or a class of such 
     technologies expected to substantially advance the mission of 
     the agency.
       ``(B) Determination.--The Administrator shall--
       ``(i) make a determination regarding an application 
     submitted under subparagraph (A) not later than 30 days 
     before the first day of the fiscal year for which the 
     application is submitted;
       ``(ii) publish the determination in the Federal Register; 
     and
       ``(iii) make a copy of the determination and any related 
     materials available to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives.
       ``(3) Maximum amount of award.--The head of a covered 
     Federal agency may not make an award under a pilot program in 
     excess of 3 times the dollar amounts generally established 
     for Phase II awards under subsection (j)(2)(D) or 
     (p)(2)(B)(ix).
       ``(4) Registration.--Any applicant that receives an award 
     under a pilot program shall register with the Administrator 
     in a registry that is available to the public.
       ``(5) Report.--The head of each covered Federal agency 
     shall include in the annual report of the covered Federal 
     agency to the Administrator an analysis of the various 
     activities considered for inclusion in the pilot program of 
     the covered Federal agency and a statement of the reasons why 
     each activity considered was included or not included, as the 
     case may be.
       ``(6) Termination.--The authority to establish a pilot 
     program under this section expires at the end of fiscal year 
     2014.
       ``(7) Definitions.--In this subsection--
       ``(A) the term `covered Federal agency'--
       ``(i) means a Federal agency participating in the SBIR 
     program or the STTR program; and
       ``(ii) does not include the Department of Defense; and
       ``(B) the term `pilot program' means the program 
     established under paragraph (1).''.

     SEC. [206]205. ACCELERATING CURES.

       (a) In General.--The Small Business Act (15 U.S.C. 631 et 
     seq.) is amended by inserting after section 42, as 
     redesignated by section 201 of this Act, the following:

     ``SEC. 43. SMALL BUSINESS INNOVATION RESEARCH PROGRAM.

       ``(a) NIH Cures Pilot.--
       ``(1) Establishment.--An independent advisory board shall 
     be established at the National Academy of Sciences (in this 
     section referred to as the `advisory board') to conduct 
     periodic evaluations of the SBIR program (as that term is 
     defined in section 9) of each of the National Institutes of 
     Health (referred to in this section as the `NIH') institutes 
     and centers for the purpose of improving the management of 
     the SBIR program through data-driven assessment.
       ``(2) Membership.--
       ``(A) In general.--The advisory board shall consist of--
       ``(i) the Director of the NIH;
       ``(ii) the Director of the SBIR program of the NIH;
       ``(iii) senior NIH agency managers, selected by the 
     Director of NIH;
       ``(iv) industry experts, selected by the Council of the 
     National Academy of Sciences in consultation with the 
     Associate Administrator for Technology of the Administration 
     and the Director of the Office of Science and Technology 
     Policy; and
       ``(v) owners or operators of small business concerns that 
     have received an award under the SBIR program of the NIH, 
     selected by the Associate Administrator for Technology of the 
     Administration.
       ``(B) Number of members.--The total number of members 
     selected under clauses (iii), (iv), and (v) of subparagraph 
     (A) shall not exceed 10.
       ``(C) Equal representation.--The total number of members of 
     the advisory board selected under clauses (i), (ii), (iii), 
     and (iv) of subparagraph (A) shall be equal to the number of 
     members of the advisory board selected under subparagraph 
     (A)(v).
       ``(b) Addressing Data Gaps.--In order to enhance the 
     evidence-base guiding SBIR program decisions and changes, the 
     Director of the SBIR program of the NIH shall address the 
     gaps and deficiencies in the data collection concerns 
     identified in the 2007 report of the National Academy of 
     Science entitled `An Assessment of the Small Business 
     Innovation Research Program at the NIH'.
       ``(c) Pilot Program.--
       ``(1) In general.--The Director of the SBIR program of the 
     NIH may initiate a pilot program, under a formal mechanism 
     for designing, implementing, and evaluating pilot programs, 
     to spur innovation and to test new strategies that may 
     enhance the development of cures and therapies.
       ``(2) Considerations.--The Director of the SBIR program of 
     the NIH may consider conducting a pilot program to include 
     individuals with successful SBIR program experience in study 
     sections, hiring individuals with small business development 
     experience for staff positions, separating the commercial and 
     scientific review processes, and examining the impact of the 
     trend toward larger awards on the overall program.
       ``(d) Report to Congress.--The Director of the NIH shall 
     submit an annual report to Congress and the advisory board on 
     the activities of the SBIR program of the NIH under this 
     section.
       ``(e) SBIR Grants and Contracts.--
       ``(1) In general.--In awarding grants and contracts under 
     the SBIR program of the NIH each SBIR program manager shall 
     emphasize applications that identify products, processes, 
     technologies, and services that may enhance the development 
     of cures and therapies.
       ``(2) Examination of commercialization and other metrics.--
     The advisory board shall evaluate the implementation of the 
     requirement under paragraph (1) by examining increased 
     commercialization and other metrics, to be determined and 
     collected by the SBIR program of the NIH.
       ``(3) Phase i and ii.--To the greatest extent practicable, 
     the Director of the SBIR program of the NIH shall reduce the 
     time period between Phase I and Phase II funding of grants 
     and contracts under the SBIR program of the NIH to 90 days.
       ``(f) Limit.--Not more than a total of 1 percent of the 
     extramural budget (as defined in section 9 of the Small 
     Business Act (15 U.S.C. 638)) of the NIH for research or 
     research and development may be used for the pilot program 
     under subsection (c) and to carry out subsection (e).''.
       (b) Prospective Repeal.--Effective 5 years after the date 
     of enactment of this Act, the Small Business Act (15 U.S.C. 
     631 et seq.) is amended--
       (1) by striking section 43, as added by subsection (a); and
       (2) by redesignating sections 44 and 45 as sections 43 and 
     44, respectively.

     SEC. [207]206. FEDERAL AGENCY ENGAGEMENT WITH SBIR AND STTR 
                   AWARDEES THAT HAVE BEEN AWARDED MULTIPLE PHASE 
                   I AWARDS BUT HAVE NOT BEEN AWARDED PHASE II 
                   AWARDS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(gg) Requirements Relating to Federal Agency Engagement 
     With Certain Phase I SBIR and STTR Awardees.--
       ``(1) Definition.--In this subsection, the term `covered 
     awardee' means a small business concern that--
       ``(A) has received multiple Phase I awards over multiple 
     years, as determined by the head of a Federal agency, under 
     the SBIR program or the STTR program of the Federal agency; 
     and
       ``(B) has not received a Phase II award--
       ``(i) under the SBIR program or STTR program, as the case 
     may be, of the Federal agency described in subparagraph (A); 
     or
       ``(ii) relating to a Phase I award described in 
     subparagraph (A) under the SBIR program or the STTR program 
     of another Federal agency.
       ``(2) Performance measures.--The head of each Federal 
     agency that participates in the SBIR program or the STTR 
     program shall develop performance measures for any covered 
     awardee relating to commercializing research or research and 
     development activities under the SBIR program or the STTR 
     program of the Federal agency.''.

     SEC. [208]207. CLARIFYING THE DEFINITION OF ``PHASE III''.

       (a) Phase III Awards.--Section 9(e) of the Small Business 
     Act (15 U.S.C. 638(e)) is amended--
       (1) in paragraph (4)(C), in the matter preceding clause 
     (i), by inserting ``for work that derives from, extends, or 
     completes efforts made under prior funding agreements under 
     the SBIR program'' after ``phase'';
       (2) in paragraph (6)(C), in the matter preceding clause 
     (i), by inserting ``for work that derives from, extends, or 
     completes efforts made under prior funding agreements under 
     the STTR program'' after ``phase'';
       (3) in paragraph (8), by striking ``and'' at the end;

[[Page 4007]]

       (4) in paragraph (9), by striking the period at the end and 
     inserting a semicolon; and
       (5) by adding at the end the following:
       ``(10) the term `commercialization' means--
       ``(A) the process of developing products, processes, 
     technologies, or services; and
       ``(B) the production and delivery of products, processes, 
     technologies, or services for sale (whether by the 
     originating party or by others) to or use by the Federal 
     Government or commercial markets;''.
       (b) Technical and Conforming Amendments.--The Small 
     Business Act (15 U.S.C. 631 et seq.) is amended--
       (1) in section 9 (15 U.S.C. 638)--
       (A) in subsection (e)--
       (i) in paragraph (4)(C)(ii), by striking ``scientific 
     review criteria'' and inserting ``merit-based selection 
     procedures'';
       (ii) in paragraph (9), by striking ``the second or the 
     third phase'' and inserting ``Phase II or Phase III''; and
       (iii) by adding at the end the following:
       ``(11) the term `Phase I' means--
       ``(A) with respect to the SBIR program, the first phase 
     described in paragraph (4)(A); and
       ``(B) with respect to the STTR program, the first phase 
     described in paragraph (6)(A);
       ``(12) the term `Phase II' means--
       ``(A) with respect to the SBIR program, the second phase 
     described in paragraph (4)(B); and
       ``(B) with respect to the STTR program, the second phase 
     described in paragraph (6)(B); and
       ``(13) the term `Phase III' means--
       ``(A) with respect to the SBIR program, the third phase 
     described in paragraph (4)(C); and
       ``(B) with respect to the STTR program, the third phase 
     described in paragraph (6)(C).'';
       (B) in subsection (j)--
       (i) in paragraph (1)(B), by striking ``phase two'' and 
     inserting ``Phase II'';
       (ii) in paragraph (2)--

       (I) in subparagraph (B)--

       (aa) by striking ``the third phase'' each place it appears 
     and inserting ``Phase III''; and
       (bb) by striking ``the second phase'' and inserting ``Phase 
     II'';

       (II) in subparagraph (D)--

       (aa) by striking ``the first phase'' and inserting ``Phase 
     I''; and
       (bb) by striking ``the second phase'' and inserting ``Phase 
     II'';

       (III) in subparagraph (F), by striking ``the third phase'' 
     and inserting ``Phase III'';
       (IV) in subparagraph (G)--

       (aa) by striking ``the first phase'' and inserting ``Phase 
     I''; and
       (bb) by striking ``the second phase'' and inserting ``Phase 
     II''; and

       (V) in subparagraph (H)--

       (aa) by striking ``the first phase'' and inserting ``Phase 
     I'';
       (bb) by striking ``second phase'' each place it appears and 
     inserting ``Phase II''; and
       (cc) by striking ``third phase'' and inserting ``Phase 
     III''; and
       (iii) in paragraph (3)--

       (I) in subparagraph (A)--

       (aa) by striking ``the first phase (as described in 
     subsection (e)(4)(A))'' and inserting ``Phase I'';
       (bb) by striking ``the second phase (as described in 
     subsection (e)(4)(B))'' and inserting ``Phase II''; and
       (cc) by striking ``the third phase (as described in 
     subsection (e)(4)(C))'' and inserting ``Phase III''; and

       (II) in subparagraph (B), by striking ``second phase'' and 
     inserting ``Phase II'';

       (C) in subsection (k)--
       (i) by striking ``first phase'' each place it appears and 
     inserting ``Phase I''; and
       (ii) by striking ``second phase'' each place it appears and 
     inserting ``Phase II'';
       (D) in subsection (l)(2)--
       (i) by striking ``the first phase'' and inserting ``Phase 
     I''; and
       (ii) by striking ``the second phase'' and inserting ``Phase 
     II'';
       (E) in subsection (o)(13)--
       (i) in subparagraph (B), by striking ``second phase'' and 
     inserting ``Phase II''; and
       (ii) in subparagraph (C), by striking ``third phase'' and 
     inserting ``Phase III'';
       (F) in subsection (p)--
       (i) in paragraph (2)(B)--

       (I) in clause (vi)--

       (aa) by striking ``the second phase'' and inserting ``Phase 
     II''; and
       (bb) by striking ``the third phase'' and inserting ``Phase 
     III''; and

       (II) in clause (ix)--

       (aa) by striking ``the first phase'' and inserting ``Phase 
     I''; and
       (bb) by striking ``the second phase'' and inserting ``Phase 
     II''; and
       (ii) in paragraph (3)--

       (I) by striking ``the first phase (as described in 
     subsection (e)(6)(A))'' and inserting ``Phase I'';
       (II) by striking ``the second phase (as described in 
     subsection (e)(6)(B))'' and inserting ``Phase II''; and
       (III) by striking ``the third phase (as described in 
     subsection (e)(6)(A))'' and inserting ``Phase III'';

       (G) in subsection (q)(3)--
       (i) in subparagraph (A)--

       (I) in the subparagraph heading, by striking ``First 
     phase'' and inserting ``Phase i''; and
       (II) by striking ``first phase'' and inserting ``Phase I''; 
     and

       (ii) in subparagraph (B)--

       (I) in the subparagraph heading, by striking ``Second 
     phase'' and inserting ``Phase ii''; and
       (II) by striking ``second phase'' and inserting ``Phase 
     II'';

       (H) in subsection (r)--
       (i) in the subsection heading, by striking ``Third Phase'' 
     and inserting ``Phase III'';
       (ii) in paragraph (1)--

       (I) in the first sentence--

       (aa) by striking ``for the second phase'' and inserting 
     ``for Phase II'';
       (bb) by striking ``third phase'' and inserting ``Phase 
     III''; and
       (cc) by striking ``second phase period'' and inserting 
     ``Phase II period''; and

       (II) in the second sentence--

       (aa) by striking ``second phase'' and inserting ``Phase 
     II''; and
       (bb) by striking ``third phase'' and inserting ``Phase 
     III''; and
       (iii) in paragraph (2), by striking ``third phase'' and 
     inserting ``Phase III''; and
       (I) in subsection (u)(2)(B), by striking ``the first 
     phase'' and inserting ``Phase I''; and
       (2) in section 34(c)(2)(B)(vii) (15 U.S.C. 
     657e(c)(2)(B)(vii)), as redesignated by section 201 of this 
     Act, by striking ``third phase'' and inserting ``Phase III''.

     SEC. [209]208. SHORTENED PERIOD FOR FINAL DECISIONS ON 
                   PROPOSALS AND APPLICATIONS.

       (a) In General.--Section 9 of the Small Business Act (15 
     U.S.C. 638) is amended--
       (1) in subsection (g)(4)--
       (A) by inserting ``(A)'' after ``(4)'';
       (B) by adding ``and'' after the semicolon at the end; and
       (C) by adding at the end the following:
       ``(B) make a final decision on each proposal submitted 
     under the SBIR program--
       ``(i) not later than 90 days after the date on which the 
     solicitation closes; or
       ``(ii) if the Administrator authorizes an extension for a 
     solicitation, not later than 180 days after the date on which 
     the solicitation closes;''; and
       (2) in subsection (o)(4)--
       (A) by inserting ``(A)'' after ``(4)'';
       (B) by adding ``and'' after the semicolon at the end; and
       (C) by adding at the end the following:
       ``(B) make a final decision on each proposal submitted 
     under the STTR program--
       ``(i) not later than 90 days after the date on which the 
     solicitation closes; or
       ``(ii) if the Administrator authorizes an extension for a 
     solicitation, not later than 180 days after the date on which 
     the solicitation closes;''.
       (b) NIH Peer Review Process.--
       (1) In general.--Section 9 of the Small Business Act (15 
     U.S.C. 638), as amended by this Act, is amended by adding at 
     the end the following:
       ``(hh) NIH Peer Review Process.--The Director of the 
     National Institutes of Health may make an award under the 
     SBIR program or the STTR program of the National Institutes 
     of Health if the application for the award has undergone 
     technical and scientific peer review under section 492 of the 
     Public Health Service Act (42 U.S.C. 289a).''.
       (2) Technical and conforming amendments.--Section 105 of 
     the National Institutes of Health Reform Act of 2006 (42 
     U.S.C. 284n) is amended--
       (A) in subsection (a)(3)--
       (i) by striking ``A grant'' and inserting ``Except as 
     provided in section 9(hh) of the Small Business Act (15 
     U.S.C. 638(hh)), a grant''; and
       (ii) by striking ``section 402(k)'' and all that follows 
     through ``Act)'' and inserting ``section 402(l) of such 
     Act''; and
       (B) in subsection (b)(5)--
       (i) by striking ``A grant'' and inserting ``Except as 
     provided in section 9(hh) of the Small Business Act (15 
     U.S.C. 638(hh)), a grant''; and
       (ii) by striking ``section 402(k)'' and all that follows 
     through ``Act)'' and inserting ``section 402(l) of such 
     Act''.

                  TITLE III--OVERSIGHT AND EVALUATION

     SEC. 301. STREAMLINING ANNUAL EVALUATION REQUIREMENTS.

       Section 9(b) of the Small Business Act (15 U.S.C. 638(b)), 
     as amended by section 102 of this Act, is amended--
       (1) in paragraph (7)--
       (A) by striking ``STTR programs, including the data'' and 
     inserting the following: ``STTR programs, including--
       ``(A) the data'';
       (B) by striking ``(g)(10), (o)(9), and (o)(15), the 
     number'' and all that follows through ``under each of the 
     SBIR and STTR programs, and a description'' and inserting the 
     following: ``(g)(8) and (o)(9); and
       ``(B) the number of proposals received from, and the number 
     and total amount of awards to, HUBZone small business 
     concerns and firms with venture capital investment (including 
     those majority-owned by multiple venture capital operating 
     companies) under each of the SBIR and STTR programs;
       ``(C) a description of the extent to which each Federal 
     agency is increasing outreach and awards to firms owned and 
     controlled by women and social or economically disadvantaged 
     individuals under each of the SBIR and STTR programs;

[[Page 4008]]

       ``(D) general information about the implementation of, and 
     compliance with the allocation of funds required under, 
     subsection (cc) for firms owned in majority part by venture 
     capital operating companies and participating in the SBIR 
     program;
       ``(E) a detailed description of appeals of Phase III awards 
     and notices of noncompliance with the SBIR Policy Directive 
     and the STTR Policy Directive filed by the Administrator with 
     Federal agencies; and
       ``(F) a description''; and
       (2) by inserting after paragraph (7) the following:
       ``(8) to coordinate the implementation of electronic 
     databases at each of the Federal agencies participating in 
     the SBIR program or the STTR program, including the technical 
     ability of the participating agencies to electronically share 
     data;''.

     SEC. 302. DATA COLLECTION FROM AGENCIES FOR SBIR.

       Section 9(g) of the Small Business Act (15 U.S.C. 638(g)) 
     is amended--
       (1) by striking paragraph (10);
       (2) by redesignating paragraphs (8) and (9) as paragraphs 
     (9) and (10), respectively; and
       (3) by inserting after paragraph (7) the following:
       ``(8) collect annually, and maintain in a common format in 
     accordance with the simplified reporting requirements under 
     subsection (v), such information from awardees as is 
     necessary to assess the SBIR program, including information 
     necessary to maintain the database described in subsection 
     (k), including--
       ``(A) whether an awardee--
       ``(i) has venture capital or is majority-owned by multiple 
     venture capital operating companies, and, if so--

       ``(I) the amount of venture capital that the awardee has 
     received as of the date of the award; and
       ``(II) the amount of additional capital that the awardee 
     has invested in the SBIR technology;

       ``(ii) has an investor that--

       ``(I) is an individual who is not a citizen of the United 
     States or a lawful permanent resident of the United States, 
     and if so, the name of any such individual; or
       ``(II) is a person that is not an individual and is not 
     organized under the laws of a State or the United States, and 
     if so the name of any such person;

       ``(iii) is owned by a woman or has a woman as a principal 
     investigator;
       ``(iv) is owned by a socially or economically disadvantaged 
     individual or has a socially or economically disadvantaged 
     individual as a principal investigator;
       ``(v) received assistance under the FAST program under 
     section 34, as in effect on the day before the date of 
     enactment of the SBIR/STTR Reauthorization Act of 2011, or 
     the outreach program under subsection (s);
       ``(vi) is a faculty member or a student of an institution 
     of higher education, as that term is defined in section 101 
     of the Higher Education Act of 1965 (20 U.S.C. 1001); or
       ``(vii) is located in a State described in subsection 
     (u)(3); and
       ``(B) a justification statement from the agency, if an 
     awardee receives an award in an amount that is more than the 
     award guidelines under this section;''.

     SEC. 303. DATA COLLECTION FROM AGENCIES FOR STTR.

       Section 9(o) of the Small Business Act (15 U.S.C. 638(o)) 
     is amended by striking paragraph (9) and inserting the 
     following:
       ``(9) collect annually, and maintain in a common format in 
     accordance with the simplified reporting requirements under 
     subsection (v), such information from applicants and awardees 
     as is necessary to assess the STTR program outputs and 
     outcomes, including information necessary to maintain the 
     database described in subsection (k), including--
       ``(A) whether an applicant or awardee--
       ``(i) has venture capital or is majority-owned by multiple 
     venture capital operating companies, and, if so--

       ``(I) the amount of venture capital that the applicant or 
     awardee has received as of the date of the application or 
     award, as applicable; and
       ``(II) the amount of additional capital that the applicant 
     or awardee has invested in the SBIR technology;

       ``(ii) has an investor that--

       ``(I) is an individual who is not a citizen of the United 
     States or a lawful permanent resident of the United States, 
     and if so, the name of any such individual; or
       ``(II) is a person that is not an individual and is not 
     organized under the laws of a State or the United States, and 
     if so the name of any such person;

       ``(iii) is owned by a woman or has a woman as a principal 
     investigator;
       ``(iv) is owned by a socially or economically disadvantaged 
     individual or has a socially or economically disadvantaged 
     individual as a principal investigator;
       ``(v) received assistance under the FAST program under 
     section 34 or the outreach program under subsection (s);
       ``(vi) is a faculty member or a student of an institution 
     of higher education, as that term is defined in section 101 
     of the Higher Education Act of 1965 (20 U.S.C. 1001); or
       ``(vii) is located in a State in which the total value of 
     contracts awarded to small business concerns under all STTR 
     programs is less than the total value of contracts awarded to 
     small business concerns in a majority of other States, as 
     determined by the Administrator in biennial fiscal years, 
     beginning with fiscal year 2008, based on the most recent 
     statistics compiled by the Administrator; and
       ``(B) if an awardee receives an award in an amount that is 
     more than the award guidelines under this section, a 
     statement from the agency that justifies the award amount;''.

     SEC. 304. PUBLIC DATABASE.

       Section 9(k)(1) of the Small Business Act (15 U.S.C. 
     638(k)(1)) is amended--
       (1) in subparagraph (D), by striking ``and'' at the end;
       (2) in subparagraph (E), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(F) for each small business concern that has received a 
     Phase I or Phase II SBIR or STTR award from a Federal agency, 
     whether the small business concern--
       ``(i) has venture capital and, if so, whether the small 
     business concern is registered as majority-owned by multiple 
     venture capital operating companies as required under 
     subsection (cc)(4);
       ``(ii) is owned by a woman or has a woman as a principal 
     investigator;
       ``(iii) is owned by a socially or economically 
     disadvantaged individual or has a socially or economically 
     disadvantaged individual as a principal investigator;
       ``(iv) received assistance under the FAST program under 
     section 34, as in effect on the day before the date of 
     enactment of the SBIR/STTR Reauthorization Act of 2011, or 
     the outreach program under subsection (s); or
       ``(v) is owned by a faculty member or a student of an 
     institution of higher education, as that term is defined in 
     section 101 of the Higher Education Act of 1965 (20 U.S.C. 
     1001).''.

     SEC. 305. GOVERNMENT DATABASE.

       Section 9(k) of the Small Business Act (15 U.S.C. 638(k)) 
     is amended--
       (1) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``Not later'' and all that follows through ``Act of 2000'' 
     and inserting ``Not later than 90 days after the date of 
     enactment of the SBIR/STTR Reauthorization Act of 2011'';
       (B) by striking subparagraph (C);
       (C) by redesignating subparagraphs (A) and (B) as 
     subparagraphs (B) and (C), respectively;
       (D) by inserting before subparagraph (B), as so 
     redesignated, the following:
       ``(A) contains, for each small business concern that 
     applies for, submits a proposal for, or receives an award 
     under Phase I or Phase II of the SBIR program or the STTR 
     program--
       ``(i) the name, size, and location, and an identifying 
     number assigned by the Administration of the small business 
     concern;
       ``(ii) an abstract of the project;
       ``(iii) the specific aims of the project;
       ``(iv) the number of employees of the small business 
     concern;
       ``(v) the names of key individuals that will carry out the 
     project;
       ``(vi) the percentage of effort each individual described 
     in clause (iv) will contribute to the project;
       ``(vii) whether the small business concern is majority-
     owned by multiple venture capital operating companies; and
       ``(viii) the Federal agency to which the application is 
     made, and contact information for the person or office within 
     the Federal agency that is responsible for reviewing 
     applications and making awards under the SBIR program or the 
     STTR program;'';
       (E) by redesignating subparagraphs (D), and (E) as 
     subparagraphs (E) and (F), respectively;
       (F) by inserting after subparagraph (C), as so 
     redesignated, the following:
       ``(D) includes, for each awardee--
       ``(i) the name, size, location, and any identifying number 
     assigned to the awardee by the Administrator;
       ``(ii) whether the awardee has venture capital, and, if 
     so--

       ``(I) the amount of venture capital as of the date of the 
     award;
       ``(II) the percentage of ownership of the awardee held by a 
     venture capital operating company, including whether the 
     awardee is majority-owned by multiple venture capital 
     operating companies; and
       ``(III) the amount of additional capital that the awardee 
     has invested in the SBIR technology, which information shall 
     be collected on an annual basis;

       ``(iii) the names and locations of any affiliates of the 
     awardee;
       ``(iv) the number of employees of the awardee;
       ``(v) the number of employees of the affiliates of the 
     awardee; and
       ``(vi) the names of, and the percentage of ownership of the 
     awardee held by--

       ``(I) any individual who is not a citizen of the United 
     States or a lawful permanent resident of the United States; 
     or
       ``(II) any person that is not an individual and is not 
     organized under the laws of a State or the United States;'';

[[Page 4009]]

       (G) in subparagraph (E), as so redesignated, by striking 
     ``and'' at the end;
       (H) in subparagraph (F), as so redesignated, by striking 
     the period at the end and inserting ``; and''; and
       (I) by adding at the end the following:
       ``(G) includes a timely and accurate list of any individual 
     or small business concern that has participated in the SBIR 
     program or STTR program that has committed fraud, waste, or 
     abuse relating to the SBIR program or STTR program.''; and
       (2) in paragraph (3), by adding at the end the following:
       ``(C) Government database.--Not later than 60 days after 
     the date established by a Federal agency for submitting 
     applications or proposals for a Phase I or Phase II award 
     under the SBIR program or STTR program, the head of the 
     Federal agency shall submit to the Administrator the data 
     required under paragraph (2) with respect to each small 
     business concern that applies or submits a proposal for the 
     Phase I or Phase II award.''.

     SEC. 306. ACCURACY IN FUNDING BASE CALCULATIONS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, and every year thereafter until the 
     date that is 5 years after the date of enactment of this Act, 
     the Comptroller General of the United States shall--
       (1) conduct a fiscal and management audit of the SBIR 
     program and the STTR program for the applicable period to--
       (A) determine whether Federal agencies comply with the 
     expenditure amount requirements under subsections (f)(1) and 
     (n)(1) of section 9 of the Small Business Act (15 U.S.C. 
     638), as amended by this Act;
       (B) assess the extent of compliance with the requirements 
     of section 9(i)(2) of the Small Business Act (15 U.S.C. 
     638(i)(2)) by Federal agencies participating in the SBIR 
     program or the STTR program and the Administration;
       (C) assess whether it would be more consistent and 
     effective to base the amount of the allocations under the 
     SBIR program and the STTR program on a percentage of the 
     research and development budget of a Federal agency, rather 
     than the extramural budget of the Federal agency; and
       (D) determine the portion of the extramural research or 
     research and development budget of a Federal agency that each 
     Federal agency spends for administrative purposes relating to 
     the SBIR program or STTR program, and for what specific 
     purposes, including the portion, if any, of such budget the 
     Federal agency spends for salaries and expenses, travel to 
     visit applicants, outreach events, marketing, and technical 
     assistance; and
       (2) submit a report to the Committee on Small Business and 
     Entrepreneurship of the Senate and the Committee on Small 
     Business of the House of Representatives regarding the audit 
     conducted under paragraph (1), including the assessments 
     required under subparagraphs (B) and (C), and the 
     determination made under subparagraph (D) of paragraph (1).
       (b) Definition of Applicable Period.--In this section, the 
     term ``applicable period'' means--
       (1) for the first report submitted under this section, the 
     period beginning on October 1, 2005, and ending on September 
     30 of the last full fiscal year before the date of enactment 
     of this Act for which information is available; and
       (2) for the second and each subsequent report submitted 
     under this section, the period--
       (A) beginning on October 1 of the first fiscal year after 
     the end of the most recent full fiscal year relating to which 
     a report under this section was submitted; and
       (B) ending on September 30 of the last full fiscal year 
     before the date of the report.

     SEC. 307. CONTINUED EVALUATION BY THE NATIONAL ACADEMY OF 
                   SCIENCES.

       Section 108 of the Small Business Reauthorization Act of 
     2000 (15 U.S.C. 638 note) is amended by adding at the end the 
     following:
       ``(e) Extensions and Enhancements of Authority.--
       ``(1) In general.--Not later than 6 months after the date 
     of enactment of the SBIR/STTR Reauthorization Act of 2011, 
     the head of each agency described in subsection (a), in 
     consultation with the Small Business Administration, shall 
     cooperatively enter into an agreement with the National 
     Academy of Sciences for the National Research Council to, not 
     later than 4 years after the date of enactment of the SBIR/
     STTR Reauthorization Act of 2011, and every 4 years 
     thereafter--
       ``(A) continue the most recent study under this section 
     relating to--
       ``(i) the issues described in subparagraphs (A), (B), (C), 
     and (E) of subsection (a)(1); and
       ``(ii) the effectiveness of the government and public 
     databases described in section 9(k) of the Small Business Act 
     (15 U.S.C. 638(k)) in reducing vulnerabilities of the SBIR 
     program and the STTR program to fraud, waste, and abuse, 
     particularly with respect to Federal agencies funding 
     duplicative proposals and business concerns falsifying 
     information in proposals;
       ``(B) make recommendations with respect to the issues 
     described in subparagraph (A)(ii) and subparagraphs (A), (D), 
     and (E) of subsection (a)(2)[.]; and
       ``(C) estimate, to the extent practicable, the number of 
     jobs created by the SBIR program or STTR program of the 
     agency.
       ``(2) Consultation.--An agreement under paragraph (1) shall 
     require the National Research Council to ensure there is 
     participation by and consultation with the small business 
     community, the Administration, and other interested parties 
     as described in subsection (b).
       ``(3) Reporting.--An agreement under paragraph (1) shall 
     require that not later than 4 years after the date of 
     enactment of the SBIR/STTR Reauthorization Act of 2011, and 
     every 4 years thereafter, the National Research Council shall 
     submit to the head of the agency entering into the agreement, 
     the Committee on Small Business and Entrepreneurship of the 
     Senate, and the Committee on Small Business of the House of 
     Representatives a report regarding the study conducted under 
     paragraph (1) and containing the recommendations described in 
     paragraph (1).''.

     SEC. 308. TECHNOLOGY INSERTION REPORTING REQUIREMENTS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(ii) Phase III Reporting.--The annual SBIR or STTR report 
     to Congress by the Administration under subsection (b)(7) 
     shall include, for each Phase III award made by the Federal 
     agency--
       ``(1) the name of the agency or component of the agency or 
     the non-Federal source of capital making the Phase III award;
       ``(2) the name of the small business concern or individual 
     receiving the Phase III award; and
       ``(3) the dollar amount of the Phase III award.''.

     SEC. 309. INTELLECTUAL PROPERTY PROTECTIONS.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study of the SBIR program to assess 
     whether--
       (1) Federal agencies comply with the data rights 
     protections for SBIR awardees and the technologies of SBIR 
     awardees under section 9 of the Small Business Act (15 U.S.C. 
     638);
       (2) the laws and policy directives intended to clarify the 
     scope of data rights, including in prototypes and mentor-
     protege relationships and agreements with Federal 
     laboratories, are sufficient to protect SBIR awardees; and
       (3) there is an effective grievance tracking process for 
     SBIR awardees who have grievances against a Federal agency 
     regarding data rights and a process for resolving those 
     grievances.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General shall submit 
     to the Committee on Small Business and Entrepreneurship of 
     the Senate and the Committee on Small Business of the House 
     of Representatives a report regarding the study conducted 
     under subsection (a).

     SEC. 310. OBTAINING CONSENT FROM SBIR AND STTR APPLICANTS TO 
                   RELEASE CONTACT INFORMATION TO ECONOMIC 
                   DEVELOPMENT ORGANIZATIONS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(jj) Consent To Release Contact Information to 
     Organizations.--
       ``(1) Enabling concern to give consent.--Each Federal 
     agency required by this section to conduct an SBIR program or 
     an STTR program shall enable a small business concern that is 
     an SBIR applicant or an STTR applicant to indicate to the 
     Federal agency whether the Federal agency has the consent of 
     the concern to--
       ``(A) identify the concern to appropriate local and State-
     level economic development organizations as an SBIR applicant 
     or an STTR applicant; and
       ``(B) release the contact information of the concern to 
     such organizations.
       ``(2) Rules.--The Administrator shall establish rules to 
     implement this subsection. The rules shall include a 
     requirement that a Federal agency include in the SBIR and 
     STTR application a provision through which the applicant can 
     indicate consent for purposes of paragraph (1).''.

     SEC. 311. PILOT TO ALLOW FUNDING FOR ADMINISTRATIVE, 
                   OVERSIGHT, AND CONTRACT PROCESSING COSTS.

       (a) In General.--Section 9 of the Small Business Act (15 
     U.S.C. 638), as amended by this Act, is amended by adding at 
     the end the following:
       ``(kk) Assistance for Administrative, Oversight, and 
     Contract Processing Costs.--
       ``(1) In general.--Subject to paragraph (2), for the 3 full 
     fiscal years beginning after the date of enactment of this 
     subsection, the Administrator shall allow each Federal agency 
     required to conduct an SBIR program to use not more than 3 
     percent of the funds allocated to the SBIR program of the 
     Federal agency for--
       ``(A) the administration of the SBIR program or the STTR 
     program of the Federal agency;
       ``(B) the provision of outreach and technical assistance 
     relating to the SBIR program or STTR program of the Federal 
     agency, including technical assistance site visits and 
     personnel interviews;

[[Page 4010]]

       ``(C) the implementation of commercialization and outreach 
     initiatives that were not in effect on the date of enactment 
     of this subsection;
       ``(D) carrying out the program under subsection (y);
       ``(E) activities relating to oversight and congressional 
     reporting, including the waste, fraud, and abuse prevention 
     activities described in section 313(a)(1)(B)(ii) of the SBIR/
     STTR Reauthorization Act of 2011;
       ``(F) targeted reviews of recipients of awards under the 
     SBIR program or STTR program of the Federal agency that the 
     head of the Federal agency determines are at high risk for 
     fraud, waste, or abuse, to ensure compliance with 
     requirements of the SBIR program or STTR program, 
     respectively;
       ``(G) the implementation of oversight and quality control 
     measures, including verification of reports and invoices and 
     cost reviews;
       ``(H) carrying out subsection (cc);
       ``(I) carrying out subsection (ff);
       ``(J) contract processing costs relating to the SBIR 
     program or STTR program of the Federal agency; and
       ``(K) funding for additional personnel and assistance with 
     application reviews.
       ``(2) Performance criteria.--A Federal agency may not use 
     funds as authorized under paragraph (1) until after the 
     effective date of performance criteria, which the 
     Administrator shall establish, to measure any benefits of 
     using funds as authorized under paragraph (1) and to assess 
     continuation of the authority under paragraph (1).
       ``(3) Rules.--Not later than 180 days after the date of 
     enactment of this subsection, the Administrator shall issue 
     rules to carry out this subsection.''.
       (b) Technical and Conforming Amendments.--
       (1) In general.--Section 9 of the Small Business Act (15 
     U.S.C. 638) is amended--
       (A) in subsection (f)(2)(A), as so designated by section 
     103(2) of this Act, by striking ``shall not'' and all that 
     follows through ``make available for the purpose'' and 
     inserting ``shall not make available for the purpose''; and
       (B) in subsection (y), as amended by section [204] 203--
       (i) by striking paragraph (4);
       (ii) by redesignating paragraphs (5) and (6) as paragraphs 
     (4) and (5), respectively.
       (2) Transitional rule.--Notwithstanding the amendments made 
     by paragraph (1), subsection (f)(2)(A) and (y)(4) of section 
     9 of the Small Business Act (15 U.S.C. 638), as in effect on 
     the day before the date of enactment of this Act, shall 
     continue to apply to each Federal agency until the effective 
     date of the performance criteria established by the 
     Administrator under subsection (kk)(2) of section 9 of the 
     Small Business Act, as added by subsection (a).
       (3) Prospective repeal.--Effective on the first day of the 
     fourth full fiscal year following the date of enactment of 
     this Act, section 9 of the Small Business Act (15 U.S.C. 
     638), as amended by paragraph (1) of this section, is 
     amended--
       (A) in subsection (f)(2)(A), by striking ``shall not make 
     available for the purpose'' and inserting the following: 
     ``shall not--
       ``(i) use any of its SBIR budget established pursuant to 
     paragraph (1) for the purpose of funding administrative costs 
     of the program, including costs associated with salaries and 
     expenses; or
       ``(ii) make available for the purpose''; and
       (B) in subsection (y)--
       (i) by redesignating paragraphs (4) and (5) as paragraphs 
     (5) and (6), respectively; and
       (ii) by inserting after paragraph (3) the following:
       ``(4) Funding.--
       ``(A) In general.--The Secretary of Defense and each 
     Secretary of a military department may use not more than an 
     amount equal to 1 percent of the funds available to the 
     Department of Defense or the military department pursuant to 
     the Small Business Innovation Research Program for payment of 
     expenses incurred to administer the Commercialization Pilot 
     Program under this subsection.
       ``(B) Limitations.--The funds described in subparagraph 
     (A)--
       ``(i) shall not be subject to the limitations on the use of 
     funds in subsection (f)(2); and
       ``(ii) shall not be used to make Phase III awards.''.

     SEC. 312. GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING 
                   COMPANY INVOLVEMENT.

       Not later than 3 years after the date of enactment of this 
     Act, and every 3 years thereafter, the Comptroller General of 
     the United States shall--
       (1) conduct a study of the impact of requirements relating 
     to venture capital operating company involvement under 
     section 9(cc) of the Small Business Act, as added by section 
     108 of this Act; and
       (2) submit to Congress a report regarding the study 
     conducted under paragraph (1).

     SEC. 313. REDUCING VULNERABILITY OF SBIR AND STTR PROGRAMS TO 
                   FRAUD, WASTE, AND ABUSE.

       (a) Fraud, Waste, and Abuse Prevention.--
       (1) Guidelines for fraud, waste, and abuse prevention.--
       (A) Amendments required.--Not later than 90 days after the 
     date of enactment of this Act, the Administrator shall amend 
     the SBIR Policy Directive and the STTR Policy Directive to 
     include measures to prevent fraud, waste, and abuse in the 
     SBIR program and the STTR program.
       (B) Content of amendments.--The amendments required under 
     subparagraph (A) shall include--
       (i) definitions or descriptions of fraud, waste, and abuse;
       (ii) a requirement that the Inspectors General of each 
     Federal agency that participates in the SBIR program or the 
     STTR program cooperate to--

       (I) establish fraud detection indicators;
       (II) review regulations and operating procedures of the 
     Federal agencies;
       (III) coordinate information sharing between the Federal 
     agencies; and
       (IV) improve the education and training of, and outreach 
     to--

       (aa) administrators of the SBIR program and the STTR 
     program of each Federal agency;
       (bb) applicants to the SBIR program or the STTR program; 
     and
       (cc) recipients of awards under the SBIR program or the 
     STTR program;
       (iii) guidelines for the monitoring and oversight of 
     applicants to and recipients of awards under the SBIR program 
     or the STTR program; and
       (iv) a requirement that each Federal agency that 
     participates in the SBIR program or STTR program include the 
     telephone number of the hotline established under paragraph 
     (2)--

       (I) on the Web site of the Federal agency; and
       (II) in any solicitation or notice of funding opportunity 
     issued by the Federal agency for the SBIR program or the STTR 
     program.

       (2) Fraud, waste, and abuse prevention hotline.--
       (A) Hotline established.--The Administrator shall establish 
     a telephone hotline that allows individuals to report fraud, 
     waste, and abuse in the SBIR program or STTR program.
       (B) Publication.--The Administrator shall include the 
     telephone number for the hotline established under 
     subparagraph (A) on the Web site of the Administration.
       (b) Study and Report.--
       (1) Study.--Not later than 1 year after the date of 
     enactment of this Act, and every 3 years thereafter, the 
     Comptroller General of the United States shall--
       (A) conduct a study that evaluates--
       (i) the implementation by each Federal agency that 
     participates in the SBIR program or the STTR program of the 
     amendments to the SBIR Policy Directive and the STTR Policy 
     Directive made pursuant to subsection (a);
       (ii) the effectiveness of the management information system 
     of each Federal agency that participates in the SBIR program 
     or STTR program in identifying duplicative SBIR and STTR 
     projects;
       (iii) the effectiveness of the risk management strategies 
     of each Federal agency that participates in the SBIR program 
     or STTR program in identifying areas of the SBIR program or 
     the STTR program that are at high risk for fraud;
       (iv) technological tools that may be used to detect 
     patterns of behavior that may indicate fraud by applicants to 
     the SBIR program or the STTR program;
       (v) the success of each Federal agency that participates in 
     the SBIR program or STTR program in reducing fraud, waste, 
     and abuse in the SBIR program or the STTR program of the 
     Federal agency; and
       (vi) the extent to which the Inspector General of each 
     Federal agency that participates in the SBIR program or STTR 
     program effectively conducts investigations of individuals 
     alleged to have submitted false claims or violated Federal 
     law relating to fraud, conflicts of interest, bribery, 
     gratuity, or other misconduct; and
       (B) submit to the Committee on Small Business and 
     Entrepreneurship of the Senate, the Committee on Small 
     Business of the House of Representatives, and the head of 
     each Federal agency that participates in the SBIR program or 
     STTR program a report on the results of the study conducted 
     under subparagraph (A).

     SEC. 314. INTERAGENCY POLICY COMMITTEE.

       (a) Establishment.--The Director of the Office of Science 
     and Technology Policy (in this section referred to as the 
     ``Director''), in conjunction with the Administrator, shall 
     establish an Interagency SBIR/STTR Policy Committee (in this 
     section referred to as the ``Committee'') comprised of 1 
     representative from each Federal agency with an SBIR program 
     or an STTR program and 1 representative of the Office of 
     Management and Budget.
       (b) Cochairpersons.--The Director and the Administrator 
     shall serve as cochairpersons of the Committee.
       (c) Duties.--The Committee shall review, and make policy 
     recommendations on ways to improve the effectiveness and 
     efficiency of, the SBIR program and the STTR program, 
     including--
       (1) reviewing the effectiveness of the public and 
     government databases described in section 9(k) of the Small 
     Business Act (15 U.S.C. 638(k));
       (2) identifying--

[[Page 4011]]

       (A) best practices for commercialization assistance by 
     Federal agencies that have significant potential to be 
     employed by other Federal agencies; and
       (B) proposals by Federal agencies for initiatives to 
     address challenges for small business concerns in obtaining 
     funding after a Phase II award ends and before 
     commercialization; and
       (3) developing and incorporating a standard evaluation 
     framework to enable systematic assessment of the SBIR program 
     and STTR program, including through improved tracking of 
     awards and outcomes and development of performance measures 
     for the SBIR program and STTR program of each Federal agency.
       (d) Reports.--The Committee shall submit to the Committee 
     on Small Business and Entrepreneurship of the Senate and the 
     Committee on Science and Technology and the Committee on 
     Small Business of the House of Representatives--
       (1) a report on the review by and recommendations of the 
     Committee under subsection (c)(1) not later than 1 year after 
     the date of enactment of this Act;
       (2) a report on the review by and recommendations of the 
     Committee under subsection (c)(2) not later than 18 months 
     after the date of enactment of this Act; and
       (3) a report on the review by and recommendations of the 
     Committee under subsection (c)(3) not later than 2 years 
     after the date of enactment of this Act.

     SEC. 315. SIMPLIFIED PAPERWORK REQUIREMENTS.

       Section 9(v) of the Small Business Act (15 U.S.C. 638(v)) 
     is amended--
       (1) in the subsection heading, by striking ``Simplified 
     Reporting Requirements'' and inserting ``Reducing Paperwork 
     and Compliance Burden'';
       (2) by striking ``The Administrator'' and inserting the 
     following:
       ``(1) Standardization of reporting requirements.--The 
     Administrator''; and
       (3) by adding at the end the following:
       ``(2) Simplification of application and award process.--Not 
     later than one year after the date of enactment of this 
     paragraph, and after a period of public comment, the 
     Administrator shall issue regulations or guidelines, taking 
     into consideration the unique needs of each Federal agency, 
     to ensure that each Federal agency required to carry out an 
     SBIR program or STTR program simplifies and standardizes the 
     program proposal, selection, contracting, compliance, and 
     audit procedures for the SBIR program or STTR program of the 
     Federal agency (including procedures relating to overhead 
     rates for applicants and documentation requirements) to 
     reduce the paperwork and regulatory compliance burden on 
     small business concerns applying to and participating in the 
     SBIR program or STTR program.''.

                      TITLE IV--POLICY DIRECTIVES

     SEC. 401. CONFORMING AMENDMENTS TO THE SBIR AND THE STTR 
                   POLICY DIRECTIVES.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, the Administrator shall promulgate 
     amendments to the SBIR Policy Directive and the STTR Policy 
     Directive to conform such directives to this Act and the 
     amendments made by this Act.
       (b) Publishing SBIR Policy Directive and the STTR Policy 
     Directive in the Federal Register.--Not later than 180 days 
     after the date of enactment of this Act, the Administrator 
     shall publish the amended SBIR Policy Directive and the 
     amended STTR Policy Directive in the Federal Register.

                       TITLE V--OTHER PROVISIONS

     SEC. 501. RESEARCH TOPICS AND PROGRAM DIVERSIFICATION.

       (a) SBIR Program.--Section 9(g) of the Small Business Act 
     (15 U.S.C. 638(g)) is amended--
       (1) in paragraph (3)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``broad research topics and to topics that further 1 or more 
     critical technologies'' and inserting ``applications to the 
     Federal agency for support of projects relating to 
     nanotechnology, rare diseases, security, energy, 
     transportation, or improving the security and quality of the 
     water supply of the United States, and the efficiency of 
     water delivery systems and usage patterns in the United 
     States (including the territories of the United States) 
     through the use of technology (to the extent that the 
     projects relate to the mission of the Federal agency), broad 
     research topics, and topics that further 1 or more critical 
     technologies or research priorities'';
       (B) in subparagraph (A), by striking ``or'' at the end; and
       (C) by adding at the end the following:
       ``(C) the National Academy of Sciences, in the final report 
     issued by the `America's Energy Future: Technology 
     Opportunities, Risks, and Tradeoffs' project, and in any 
     subsequent report by the National Academy of Sciences on 
     sustainability, energy, or alternative fuels;
       ``(D) the National Institutes of Health, in the annual 
     report on the rare diseases research activities of the 
     National Institutes of Health for fiscal year 2005, and in 
     any subsequent report by the National Institutes of Health on 
     rare diseases research activities;
       ``(E) the National Academy of Sciences, in the final report 
     issued by the `Transit Research and Development: Federal Role 
     in the National Program' project and the report entitled 
     `Transportation Research, Development and Technology 
     Strategic Plan (2006-2010)' issued by the Research and 
     Innovative Technology Administration of the Department of 
     Transportation, and in any subsequent report issued by the 
     National Academy of Sciences or the Department of 
     Transportation on transportation and infrastructure; or
       ``(F) the national nanotechnology strategic plan required 
     under section 2(c)(4) of the 21st Century Nanotechnology 
     Research and Development Act (15 U.S.C. 7501(c)(4)) and in 
     any report issued by the National Science and Technology 
     Council Committee on Technology that focuses on areas of 
     nanotechnology identified in such plan;''; and
       (2) by adding after paragraph (12), as added by section 
     111(a) of this Act, the following:
       ``(13) encourage applications under the SBIR program (to 
     the extent that the projects relate to the mission of the 
     Federal agency)--
       ``(A) from small business concerns in geographic areas 
     underrepresented in the SBIR program or located in rural 
     areas (as defined in section 1393(a)(2) of the Internal 
     Revenue Code of 1986);
       ``(B) small business concerns owned and controlled by 
     women;
       ``(C) small business concerns owned and controlled by 
     veterans;
       ``(D) small business concerns owned and controlled by 
     Native Americans; and
       ``(E) small business concerns located in a geographic area 
     with an unemployment rates that exceed the national 
     unemployment rate, based on the most recently available 
     monthly publications of the Bureau of Labor Statistics of the 
     Department of Labor.''.
       (b) STTR Program.--Section 9(o) of the Small Business Act 
     (15 U.S.C. 638(o)), as amended by section 111(b) of this Act, 
     is amended--
       (1) in paragraph (3)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``broad research topics and to topics that further 1 or more 
     critical technologies'' and inserting ``applications to the 
     Federal agency for support of projects relating to 
     nanotechnology, security, energy, rare diseases, 
     transportation, or improving the security and quality of the 
     water supply of the United States (to the extent that the 
     projects relate to the mission of the Federal agency), broad 
     research topics, and topics that further 1 or more critical 
     technologies or research priorities'';
       (B) in subparagraph (A), by striking ``or'' at the end; and
       (C) by adding at the end the following:
       ``(C) the National Academy of Sciences, in the final report 
     issued by the `America's Energy Future: Technology 
     Opportunities, Risks, and Tradeoffs' project, and in any 
     subsequent report by the National Academy of Sciences on 
     sustainability, energy, or alternative fuels;
       ``(D) the National Institutes of Health, in the annual 
     report on the rare diseases research activities of the 
     National Institutes of Health for fiscal year 2005, and in 
     any subsequent report by the National Institutes of Health on 
     rare diseases research activities;
       ``(E) the National Academy of Sciences, in the final report 
     issued by the `Transit Research and Development: Federal Role 
     in the National Program' project and the report entitled 
     `Transportation Research, Development and Technology 
     Strategic Plan (2006-2010)' issued by the Research and 
     Innovative Technology Administration of the Department of 
     Transportation, and in any subsequent report issued by the 
     National Academy of Sciences or the Department of 
     Transportation on transportation and infrastructure; or
       ``(F) the national nanotechnology strategic plan required 
     under section 2(c)(4) of the 21st Century Nanotechnology 
     Research and Development Act (15 U.S.C. 7501(c)(4)) and in 
     any report issued by the National Science and Technology 
     Council Committee on Technology that focuses on areas of 
     nanotechnology identified in such plan;'';
       (2) in paragraph (15), by striking ``and'' at the end;
       (3) in paragraph (16), by striking the period at the end 
     and inserting ``; and''; and
       (4) by adding at the end the following:
       ``(17) encourage applications under the STTR program (to 
     the extent that the projects relate to the mission of the 
     Federal agency)--
       ``(A) from small business concerns in geographic areas 
     underrepresented in the STTR program or located in rural 
     areas (as defined in section 1393(a)(2) of the Internal 
     Revenue Code of 1986);
       ``(B) small business concerns owned and controlled by 
     women;
       ``(C) small business concerns owned and controlled by 
     veterans;
       ``(D) small business concerns owned and controlled by 
     Native Americans; and
       ``(E) small business concerns located in a geographic area 
     with an unemployment rates that exceed the national 
     unemployment rate, based on the most recently available 
     monthly publications of the Bureau of Labor Statistics of the 
     Department of Labor.''.
       (c) Research and Development Focus.--Section 9(x) of the 
     Small Business Act (15 U.S.C. 638(x)) is amended--

[[Page 4012]]

       (1) by striking paragraph (2); and
       (2) by redesignating paragraph (3) as paragraph (2).

     SEC. 502. REPORT ON SBIR AND STTR PROGRAM GOALS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(ll) Annual Report on SBIR and STTR Program Goals.--
       ``(1) Development of metrics.--The head of each Federal 
     agency required to participate in the SBIR program or the 
     STTR program shall develop metrics to evaluate the 
     effectiveness, and the benefit to the people of the United 
     States, of the SBIR program and the STTR program of the 
     Federal agency that--
       ``(A) are science-based and statistically driven;
       ``(B) reflect the mission of the Federal agency; and
       ``(C) include factors relating to the economic impact of 
     the programs.
       ``(2) Evaluation.--The head of each Federal agency 
     described in paragraph (1) shall conduct an annual evaluation 
     using the metrics developed under paragraph (1) of--
       ``(A) the SBIR program and the STTR program of the Federal 
     agency; and
       ``(B) the benefits to the people of the United States of 
     the SBIR program and the STTR program of the Federal agency.
       ``(3) Report.--
       ``(A) In general.--The head of each Federal agency 
     described in paragraph (1) shall submit to the appropriate 
     committees of Congress and the Administrator an annual report 
     describing in detail the results of an evaluation conducted 
     under paragraph (2).
       ``(B) Public availability of report.--The head of each 
     Federal agency described in paragraph (1) shall make each 
     report submitted under subparagraph (A) available to the 
     public online.
       ``(C) Definition.--In this paragraph, the term `appropriate 
     committees of Congress' means--
       ``(i) the Committee on Small Business and Entrepreneurship 
     of the Senate; and
       ``(ii) the Committee on Small Business and the Committee on 
     Science and Technology of the House of Representatives.''.

     SEC. 503. COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR 
                   PROGRAMS.

       Section 9 of the Small Business Act (15 U.S.C. 638), as 
     amended by this Act, is amended by adding at the end the 
     following:
       ``(mm) Competitive Selection Procedures for SBIR and STTR 
     Programs.--All funds awarded, appropriated, or otherwise made 
     available in accordance with subsection (f) or (n) must be 
     awarded pursuant to competitive and merit-based selection 
     procedures.''.

  Ms. LANDRIEU. Madam President, I ask unanimous consent that in 
proceeding to the consideration of S. 493 there be a period of debate 
until noon.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Ms. LANDRIEU. Madam President, I appreciate the cooperation of both 
leaders to help us get to the floor this morning for a debate on this 
very important piece of legislation and one that we have actually and, 
unfortunately, struggled with for the last two Congresses.
  The Acting President pro tempore knows, as a member of the Small 
Business Committee and as a Senator from New Hampshire, how important 
this piece of legislation is as we continue to fight--and that is what 
the word is, ``fight''--to create jobs right here at home in America, 
not just on Wall Street, not just in the fancy places, but on Main 
Street in our hometowns all over America.
  Senator Snowe and I are on the Senate floor today together, happily, 
to talk about a bill into which she has put a tremendous amount of time 
and effort before as the chair of the committee. I serve as the chair 
of the committee, and she is my very able ranking member. Together our 
staffs have worked very closely for a long period of time to try to 
fashion the compromise that is before the Senate today.
  I thank the 84, I believe, Members of the Senate who voted for 
cloture last night. I know the rules of the Senate are strange, still, 
to many Americans. But we cannot operate without unanimous consent. So 
it takes an extra special level of cooperation. While we did not get 
everyone last night to go on the record, we did get the prerequisite 
number--above 60--to move to this debate. I am hoping our amendment 
process can be very smooth, that we stay focused on small business-
related amendments, that we work in good faith, and, hopefully, in the 
next couple of days we can get this bill off the floor because this is 
a job creator.
  One of the Senators was here earlier this morning talking about 
creating an atmosphere for job growth and development. Tax codes do 
some of that, Federal investments in infrastructure do that, 
investments in education do that. But one other thing that does it is 
fashioning Federal programs that work for the job creators of America, 
and that is what the SBIR Program does and the STTR Program does. It is 
the Federal Government's largest research and development investment 
program for small businesses. It was created actually 30 years ago, and 
the idea developed from one of our outstanding Federal workers.
  Roland Tibbetts was a staffer at the National Science Foundation. He 
took the lead in 1976 in directing a greater and more significant share 
of the research and development budget of the National Science 
Foundation and directed it to small business in a new innovation 
program.
  Why did he do this? He did it because from his position, directing a 
very established and strong research component, he saw the Federal 
Government giving most of its awards to large businesses. I think--
although I have not spoken to him personally; but I most certainly 
intend to because he has testified before former committees--I am 
imagining he probably had a heart for actually wanting to find cures 
for some diseases and realized that not all of that technology and 
innovation rested with the large companies; that, in fact, there might 
be small pharmaceutical companies or brilliant scientists in Maine or 
in New Hampshire or in Louisiana who had discovered or had the 
potential to discover something that could be transformative. So this 
staffer said: Let's set aside or direct a small portion, but an 
important portion, to small businesses. That is how this program began.
  I am so pleased with this funding, which only government can do. Only 
government can do this. There are certain things the private sector 
does well. They do venture capital when an idea has been proven or when 
the potential has clearly been established or when the potential is at 
least clearly established in the mind of one or two individuals--such 
as the guy who created Facebook or Bill Gates with Microsoft. But 
mostly great ideas need early, patient capital--very risky, but when it 
hits, it hits big.
  That is what this program does. It sets aside 2.5 to 3 percent of all 
the research and development budgets of all the Federal agencies 
ranging from the Department of Defense, which is about $1 billion that 
would be contributed to this program, down to the smaller agencies, 
which have maybe up to a couple million dollars in their research 
budgets. But out of that very pilot-like initiative back in 1976, that 
was focused on discovering, funding, and evaluating the initial highest 
risk, most cost-cutting exploratory research that is necessary to 
achieve significant technological innovations and breakthroughs, this 
program was created.
  Let me share with you what a gentleman who testified before our 
committee--we have had several hearings on this particular program, and 
no program is perfect. Let me begin with this: This program is not 
perfect. But we are perfecting it as we bring this bill to you. We have 
looked at its weaknesses. We have tried in our reauthorization to 
correct those, to firm those up. But the gentleman who is actually 
probably the leading expert on this program, Dr. Wessner, of the 
National Research Council, recently testified before our committee. He 
said:

       An important point to keep in mind is [that] you can have 
     really good ideas that die. They will die because they do not 
     have funding.

  Not because they do not have potential but because they do not have 
funding. I would add to this, particularly in this time of recession 
and tightening back on capital and the closing down of credit card 
lending: If you think it is normally tough for entrepreneurs and 
innovators and discoverers and inventors to get capital, it has been a 
very rocky road in the last year or two. So he said these ideas just 
die.
  He said:

       SBIR brings capital to transform those ideas into 
     innovations. You are not done

[[Page 4013]]

     then . . . but that gets you the innovation and product 
     development and the start of the uptake. . . . The rest of 
     the world thinks this is the greatest thing since sliced 
     bread. . . . The rest of the world is copying it, putting it 
     on steroids, while we are debating it.

  That is the point I want to make. We have debated the reauthorization 
of this legislation for 6 years. The time has come to stop the debate, 
pass the bill, and recognize this is a world model. No program is 
perfect. But the wisdom and the importance of setting aside a small 
portion of the research and development programs of all the Federal 
agencies, and then to train our workforce and our managers to look out, 
seek, and find some of the interesting technologies that could be 
created and grow into big businesses is very forward thinking, and we 
should be very grateful to Roland Tibbetts and the Senators and 
Representatives who started this program.
  Senator Warren Rudman took this idea, saw this pilot program, and 
made it a national program. We have him and others to thank for the 
jobs, the businesses that have been created.
  Let me give you one example. The founder of Qualcomm came and 
testified before our committee. Qualcomm is a very famous business. It 
developed a lot of technologies that made wireless communications 
possible. It started 25 years ago in the den of its founder, Dr. 
Jacobs. He testified before the committee and said basically Qualcomm 
was just at one time, 25 years ago, an exciting new idea. It was not a 
company. It was not a business. He and 35 of his colleagues consulted 
and talked about the new technologies they were seeing. They got an 
SBIR grant of $150,000, and then they were subsequently awarded, 
because they developed the idea, to $1.5 million. They got another 
grant, which are the limits of the program. This program has limits. 
You have to test your idea, and then you come back for phase II 
funding.
  Well, Qualcomm now employs 17,500 people. They are operating in 22 
countries. They paid more in taxes last year to local, State, and 
Federal governments than 50 percent of the cost of this entire program. 
So that is one success story. That is what I mean when I say: When it 
hits, it hits big.
  Now, not every company will turn into Qualcomm. But without programs 
like this, there is what they call a valley of death. There are ideas 
that are created out of the minds and hearts of Americans who have been 
well educated, raised to believe that dreams come true, and are 
encouraged to risk. We are natural risk takers. We have these ideas and 
these innovations. But what happens is, if there is not that important, 
early funding to develop that kind of science and technology, in large 
measure some of these ideas just fall into the valley of death. We are 
going to catch them. That is what this bill does. It is what it 
attempts to do.
  So as it has grown and developed--and we have reauthorized it over 
the years--there have been some important changes and improvements.
  I am going to recognize the ranking member, but I want to finish up 
in just a few minutes.
  In 1980, the White House Conference on Small Business echoed these 
sentiments, recognized the value of the program. The end result of the 
recommendation was this program, as I said, first authored by Senator 
Warren Rudman. It had 84 cosponsors, 8 of whom are still serving in the 
Senate: Senator Baucus, Senator Cochran, Senator Grassley, Senator 
Hatch, Senator Inouye, Senator Leahy, Senator Levin, and Senator Lugar. 
They all were original sponsors of this bill. I hope they are proud. In 
their careers they have sponsored many bills. I hope they are proud of 
this one because it has done its job and it has helped America to 
continue to honor our entrepreneurs and our inventors.
  As I mentioned, Senator Rudman, a Republican from New Hampshire, and 
once a member of our committee, was the Senate champion for the 
creation of the SBIR and STTR Programs. He was a true statesman--a man 
of vision with regard to the importance of technology to our economy. I 
wish to quote him as we begin this debate:

       The issue addressed in Senate bill 881--

  The bill at the time--

     is one which plays an underlying role in the ability of this 
     Nation to maintain its security to achieve energy 
     independence, increase productivity, and preserve the quality 
     of life we all enjoy. Our national strength and confidence in 
     these areas depend upon maintaining a leading role in 
     technological superiority.

  That is what he said in his opening statement at the Senate 
Subcommittee on Innovation and Technology on June 30, 1981.
  Senator Snowe was in the House at the time. She was a Congresswoman 
when President Reagan signed this legislation, creating it in 1982. She 
quoted from President Reagan. I know she will probably remember this 
and I think it is worth repeating:

       Our nation is blessed with two important qualities that are 
     often missing in other societies, our spirit of 
     entrepreneurship and our capacity for invention and 
     innovation. These two elements are combined in the small 
     businesses that dot our land.

  I am proud to bring this bill to the floor. It has had 
extraordinarily positive and noble champions since its beginning. As I 
said, no program is perfect, but we have tried in this reauthorization 
to look at the places where the program is weak and strengthen it. I 
will go through some of those details in the latter part of the 
afternoon. But for an overview this morning, I wanted to give more of a 
historical context of this bill, and to thank the Members for moving so 
quickly at our request to the bill.
  I look forward to the debate. I hope Members will be responsible in 
offering their amendments. I know the time for debate on the floor is 
precious. We wish to limit debate to be focused around the principles, 
at least, and the details of this bill as best we can so we can get 
this program reauthorized. Then we can continue to be the leaders in 
cutting-edge innovation, and the Federal Government can do its part--an 
important part--that venture capitalists can't do, big banks don't want 
to do, investment bankers aren't made to do, and small community banks 
don't do in this kind of lending. Only patient, directed capital can 
give that boost over the valley of death and create that bridge so 
small businesses and our scientists and engineers can walk over it 
safely.
  I wish to recognize at this time my ranking member and thank her for 
her support of this legislation from its beginning and her championship 
to this day.
  For clarification purposes, the time until noon will be for debate 
only and no amendments until after lunch.
  I yield to Senator Snowe.
  The PRESIDING OFFICER (Mr. Tester). The Senator from Maine.
  Ms. SNOWE. Mr. President, first I wish to commend the Chair of the 
Small Business Committee. She has done an extraordinary job in bringing 
this legislation to the floor in a bipartisan fashion, which I think is 
so essential to ensuring the passage of this legislation which, suffice 
it to say, has been long overdue. It has been on a long journey since 
2008 in terms of extensions and reextensions, but we have never been 
able to accomplish a reauthorization for a variety of reasons which I 
will explain later in my statement. But I do wish to congratulate the 
Chair for working mightily on both sides of the aisle and in the 
committee, accommodating bipartisanship by allowing the new members of 
the committee--particularly on our side of the aisle where we have five 
new members of the committee--who were not able to have the opportunity 
to review this legislation as new Members of the Senate because we had 
passed this unanimously in the last session of Congress. So she did 
hold a hearing and a markup to accommodate those views and give them a 
chance to review this legislation as well as to amend it in the 
committee. I know some of the Members will have amendments they will 
offer on the floor as well. So I wish to thank the Chair for 
accommodating those various issues and the members of the committee as 
they attempted their new duties as members of the Small Business 
Committee.
  I also wish to thank the Chair for working through these issues 
diligently, because these are two critical programs, as she indicated 
in her opening statement, that are crucial to

[[Page 4014]]

small businesses, but also important to innovation in America.
  Reauthorizing both the SBIR and the STTR Programs represents a 
profound opportunity for us to reaffirm the truth in the optimistic 
vision of America that indeed it is small businesses that are going to 
make the contributions not only for job creation but through their 
innovation and inventions, as the Chair mentioned, with President 
Reagan's comments many years ago. That is why I am very excited about 
reauthorizing these programs, which foster an environment of innovative 
entrepreneurship by directing more than $2 billion annually in Federal 
research and development funding to the Nation's small firms most 
likely to create jobs and commercialize their products.
  Small businesses are our Nation's job generators, employing more than 
half of all private-sector employees and creating 64 percent of the net 
new jobs over the past 15 years. They also represent 99.7 percent of 
all employer firms. Furthermore, small businesses are our Nation's most 
effective innovators, producing roughly 13 times more patents per 
employee than large firms--patents which are at least two times as 
likely to be among the top 1 percent of high-impact patents. Recipients 
of both of these programs have produced more than 85,000 patents and 
have generated millions of well-paying jobs across all 50 States. It is 
crucial, then, that both of these programs--one of the strongest 
examples of a successful public-private partnership--be a key part of 
our job creation agenda.
  The SBIR program got its start at the National Science Foundation 
back in 1976 following growing concerns that small businesses were not 
receiving an adequate share of Federal research and development funding 
despite their prominent role in innovation. It was officially 
established in law as part of the Small Business Innovation Development 
Act of 1982. As the Chair indicated, I was an original cosponsor in the 
House--hopefully that is not dating myself too much--which set four 
goals for the program: stimulate technological innovation; use small 
business to meet Federal R&D funds; foster and encourage participation 
by minority and disadvantaged persons in the technological innovation; 
and increase private-sector commercialization of innovation derived 
from Federal R&D.
  The STTR program was established in 1992 to complement the SBIR 
program by stimulating partnerships between small businesses and 
nonprofit research institutions such as universities and research 
laboratories. Together, these vital job creation programs have provided 
small firms with over $28 billion during their lifespans.
  These programs have been front and center in improving our Nation's 
capacity to be innovative. According to a report by the Information 
Technology and Innovation Foundation, SBIR-backed firms have been 
responsible for roughly 25 percent of the Nation's most crucial 
innovations over the past decade--``a powerful indication that the SBIR 
program has become a key force in the innovation economy of the United 
States.''
  Furthermore, a comprehensive 2008 National Academy of Sciences study 
of the SBIR program noted that more than 20 percent of companies 
responding to their survey noted they were founded entirely, or at 
least in part, because of a prospective SBIR award, and a full two-
thirds said the projects they performed would not have taken place 
without the funding. Just under half of the projects pursued in the 
SBIR program reached the marketplace, bringing countless new 
innovations to our everyday lives. Additionally, the study noted that 
over one-third of the companies awarded SBIR funding participate in the 
program for the first time each year, thus . . . ``encouraging 
innovation across a broad spectrum of firms.'' It concludes that SBIR 
is ``sound in concept and effective in practice.''
  In fact, there is a wide range of remarkable success stories 
associated with the SBIR program, including Qualcomm, which the Chair 
mentioned, which is a remarkable story. Qualcomm received roughly $1.5 
billion in SBIR grants to pursue several innovative programs and 
develop breakthrough technologies. Now it employs 17,500 individuals 
worldwide with an annual revenue of $11 billion. In fiscal year 2010 
alone, Qualcomm paid $1.4 billion in Federal, State, and local taxes--a 
significant return on investment.
  Another example of SBIR's success is LASIK eye surgery. The company 
behind the technology for the procedure received SBIR awards from both 
NASA and the Department of Defense. In the 1980s, NASA awarded funding 
for a project developing technology for docking of space vehicles to 
satellites by pointing laser beams. This concept was then applied to 
develop LASIK, which corrects vision problems.
  The technology that went into the Sonicare electronic toothbrush was 
funded by an SBIR award. According to NIH, which made the award, SBIR 
funding allowed the firm that developed the technology to create a $300 
million business, employing over 500 individuals.
  In my home State of Maine, Tex Tech Industries has researched and 
developed high-tech textiles that are used in body armor for U.S. 
troops and bulletproof vests for public safety personnel. Tex Tech also 
developed a fire-resistant material to be used as the primary fire 
barrier in the seating cabins of new commercial aircraft.
  Additionally, BioSciCon in Maryland is responsible for the MarkPap 
system, which is a diagnostic device that tests for cervical cancer and 
can be used as a research tool to improve cervical cancer screening.
  Other companies such as Symantec, which makes antivirus software for 
computers, and Genzyme, one of the world's leading biotechnology firms, 
all received SBIR funding at some point during their formative years. 
Some of these firms are now household names; others are still small 
businesses with a plethora of novel ideas.
  As these examples demonstrate, SBIR funding has helped small 
businesses nationwide develop incredible breakthrough technologies for 
a whole host of applications. These are innovations we use in our 
everyday lives, that help strengthen our national defense, improve our 
health, and boost our competitiveness. Regrettably the SBIR program 
expired in September 2008 and has been subject to a series of 10 short-
term, temporary extensions since then, plaguing the programs with 
uncertainty and potentially dissuading some of our Nation's most 
promising firms from participating in them. This is legislation that 
our committee has worked to have signed into law for nearly 6 years--
since the time, in fact, when I was chair of the committee. Indeed, we 
passed legislation out of the Small Business Committee unanimously in 
2006 to preempt this stalemate by making improvements to the program 
and doubling the SBIR allocation from 2.5 percent to 5 percent over 5 
years, and doubling the STTR allocation immediately.
  Last Congress, with our Chair, we once again passed legislation out 
of our committee unanimously which was very similar to the bill we 
reported out in the previous Congress. Specifically, it maintained the 
allocation increases spread out incrementally that had been developed 
in the previous Congress as a compromise, as well as the 18-and-8 
compromise on the venture capital issue. This time, the full Senate 
passed the legislation unanimously and sent it to the House of 
Representatives, where the bill sat.
  The legislation we are debating today is very similar to the bill we 
passed out unanimously 3 months ago. But we have already wasted too 
much time over the past several years, and it is now vitally critical 
that we act now and pass this legislation to provide these crucial 
innovation initiatives with certainty for the future. As the U.S. 
Chamber of Commerce has noted:

       [E]ven though this important program for the small business 
     has a proven track record of success, its full potential has 
     been held hostage by a series of short-term reauthorizations 
     which has created uncertainty for SBIR program managers and 
     limitations for potential small business grant recipients.

  As in the previous two Congresses, our legislation increases the 
allocation for SBIR from 2.5 percent of an agency's extramural research 
and development to 3.5 percent for over 10 years,

[[Page 4015]]

and doubles the STTR allocations from 0.3 to 0.6 percent over 5 years. 
This means the Federal Government can make more awards to a greater 
number of small businesses out of its existing research and development 
budget. It would also codify increased award sizes of $150,000 for 
phase I and $1 million for phase II in the SBIR program, and apply 
those levels to the STTR program as well to adjust for inflation. The 
last statutory increase in award sizes for the SBIR program was 19 
years ago as part of the 1992 reauthorization.
  It is critical that we bring the program into the 21st century to 
acknowledge the growing costs of quality research.
  Furthermore, in December, Chair Landrieu and I sent a letter to SBA 
Administrator Karen Mills stating that rooting out fraud and abuse in 
the agency's program will be our committee's first priority this 
Congress. To that end, this bill includes stringent oversight and fraud 
prevention measures, requiring inspectors general of participating 
Federal agencies to establish fraud detection measures.
  In a similar vein, the legislation includes a series of data-
collection provisions that we worked on with Senator Coburn to ensure 
we have a better base of information to use when considering future 
policy changes to the programs and engaging in necessary oversight.
  This reauthorization act contains an unprecedented compromise on the 
venture capital issue which has long bogged down any serious progress 
in reauthorizing these valuable programs. It would make firms majority 
owned by multiple venture capital companies eligible for up to 25 
percent of SBIR funds at the National Institute of Health, National 
Science Foundation, and Department of Energy, and up to 15 percent of 
the funds at the remaining agencies. My longstanding guiding principle 
on reauthorization of these programs has been simple: These are small 
business programs, not big business programs or venture capital 
programs. I have worked closely with Chair Landrieu to ensure changes 
we make to these programs keep it squarely as a small business program. 
The unprecedented landmark compromise on the venture capital issue 
passes this test. Our compromise has the backing of diverse 
stakeholders, from the U.S. Chamber of Commerce, NFIB, Small Business 
Technology Council, to the Biotechnology Industry Organization, the 
National Venture Capital Association, and a whole host of other 
organizations, as we can see on this chart.
  It is critical to note that funding for both of these programs is 
meant to serve as early-stage seed capital for eligible small 
businesses. In general, venture capital companies invest in firms that 
are further along in their development and commercialization, and they 
focus on larger investments that are easier to manage than is normally 
appropriate for many small, innovative technology firms. Nonetheless, 
particularly for firms in the biotechnology industry, venture capital 
investment is essentially a necessity to commercialize their 
technology.
  Here is what some of the groups endorsing our legislation have to say 
about the compromise we arrived at. Mr. President, I ask unanimous 
consent to have printed in the Record letters of support we have 
received regarding this legislation, as well as the report from the 
Information Technology and Innovation Foundation I referenced earlier.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                        Chamber of Commerce of the


                                     United States of America,

                                    Washington, DC, March 8, 2011.
     Hon. Mary L. Landrieu,
     Chairwoman, Committee on Small Business and Entrepreneurship, 
         U.S. Senate, Washington, DC.
     Hon. Olympia J. Snowe,
     Ranking Member, Committee on Small Business and 
         Entrepreneurship, U.S. Senate, Washington, DC.
       Dear Chairwoman Landrieu and Ranking Member Snowe: The U.S. 
     Chamber of Commerce, the world's largest business federation 
     representing the interests of more than three million 
     businesses and organizations of every size, sector, and 
     region, strongly supports S. 493, the ``SBIR/STTR 
     Reauthorization Act of 2011,'' which, if enacted into law, 
     would unleash the innovative talents of our nation's 
     entrepreneurs to help create jobs and revive the economy.
       The Small Business Innovative Research Program (SBIR) 
     serves as an important avenue by which agencies harness the 
     creativity and ingenuity of small business to meet specific 
     research and development needs of the Federal government. In 
     effect, this program requires federal agencies with a certain 
     level of research dollars to give a small percentage of those 
     dollars to small businesses through a competitive grant 
     process.
       Even though this important program for small business has a 
     proven track record of success, its full potential has been 
     held hostage by a series of short-term reauthorizations which 
     has created uncertainty for SBIR program managers and 
     limitations for potential small business grant recipients. 
     This landmark compromise bill, if passed into law, would 
     unlock the door for entry for businesses that acquire equity 
     funding through venture capital firms without diminishing the 
     programs effectiveness for traditional small businesses, thus 
     setting the stage for a robust and revitalized SBIR program.
       Ninety-six percent of the Chamber's members are small 
     businesses with fewer than one-hundred employees. On behalf 
     of our smaller members, we thank you for introducing the 
     ``SBIR/STTR Reauthorization Act of 2011'' and look forward to 
     working with you to expeditiously pass it into law.
           Sincerely,
     R. Bruce Josten.
                                  ____



                                                      CONNECT,

                                    Washington, DC, March 8, 2011.
     Hon. Mary Landrieu,
     Hon. Olympia Snowe,
     U.S. Senate, Small Business and Entrepreneurship Committee, 
         Russell Senate Office Building, Washington, DC.
       Dear Chair Landrieu and Ranking Member Snowe: As the 
     Committee meets to markup S. 493--the SBIR/STTR 
     Reauthorization Act of 2011, I write to introduce you to 
     CONNECT and to encourage the Committee's support of S. 493 
     since the bill will have a positive impact in the formation 
     of start-up technology companies. The formation of such 
     companies will create jobs and help rejuvenate the American 
     economy. We appreciate your strong and consistent leadership 
     in shepherding previous versions of this reauthorization 
     through the Committee and the Senate floor.
       CONNECT is an innovation accelerator with the mission to 
     assist entrepreneurs in their efforts to propel creative 
     ideas and emerging technologies to the marketplace. As a 
     regional innovation development organization, our 
     commercialization efforts in Southern California span the 
     spectrum of technologies from IT, wireless health, software, 
     clean energy, environmental, life sciences/biotech, defense 
     and security, and sports/action technologies. Over the last 
     25 years, CONNECT's commercialization capacity-building model 
     has helped over 2,000 start-ups and has been replicated in 
     numerous U.S. cities, states and regions, as well as 
     overseas.
       From our experience, CONNECT knows that the Small Business 
     Innovation Research and Small Business Technology Transfer 
     programs can be advantageous to start-up formation, thus 
     CONNECT's interest in S. 493 is profound. Because acquiring 
     funding through traditional lending sources continues to 
     prove difficult in today's tight credit market, SBIR/STTR 
     grants provide tech start-up companies another viable chance 
     to compete for early-stage funding.
       We recognize the delicate balance that S. 493 strikes 
     related to the issue of venture- backed applicants and are 
     grateful for the efforts made to reach an agreement. However, 
     we encourage the Committee to explore a more robust approach 
     that would increase the percentage of funds available to VC-
     backed applicants because such applicants provide extra value 
     to the American taxpayer. Given that venture capital firms 
     conduct extensive due diligence reviews before investing, 
     venture-backed applicants have already demonstrated a strong 
     business plan by which to break into an industry sector. In 
     this time when the federal dollar needs to return revenues to 
     the Treasury, allowing for more VC-backed applicants 
     increases the likelihood that SBIR/STTR funds will create new 
     jobs and grow companies in a way that will generate new tax 
     revenue.
       The Committee is right on point in proposing to increase 
     award amounts and adding new data collection, reporting 
     requirements, and performance metrics to ensure the SBIR/STTR 
     missions are being upheld. Although the SBIR program 
     allocation increase of 1% is critically important, such 
     allocation presents another opportunity for the Committee to 
     explore a more robust expansion. Because the 1% increase is 
     spread evenly over 10 years, further adjusting the increase 
     would give stakeholders plenty of notice to plan accordingly.
       As the bill moves to the floor, we'd like to suggest one 
     new proposal that could be added to a Manager's Amendment. We 
     continue to

[[Page 4016]]

     hear that one of the major costs that start-ups face are the 
     legal costs to secure intellectual property rights through 
     the patent and trademark application process. Because IP is 
     indispensable for a start-up's growth, the Committee should 
     consider allowing a percentage of Phase I awards (possibly up 
     to one third) to be directed toward IP acquisition.
       Again, thank you for your work to advance the cause of 
     SBIR/STTR reauthorization. We are ready to assist you, your 
     staff, and other Committee members as the bill moves onto the 
     Senate floor.
           Best wishes,
                                                Timothy Tardibono,
     Director of Public Policy.
                                  ____



                                                  DAWNBREAKER

                               Rochester, New York, March 8, 2011.
     Hon. Mary L. Landrieu,
     Chairwoman, U.S. Senate, Committee on Small Business and 
         Entrepreneurship, Russell Senate Office Bldg., 
         Washington, DC.
     Hon. Olympia J. Snowe,
     Ranking Member, U.S. Senate, Committee on Small Business and 
         Entrepreneurship, Russell Senate Office Bldg., 
         Washington, DC.
       Dear Chairwoman Landrieu and Ranking Member Snowe: I am 
     writing to express my support for S. 493, the ``SBIR and STTR 
     Reauthorization Act of 2011.'' In 2008, the National Research 
     Council completed a comprehensive assessment of the SBIR 
     program and found the program to be, ``sound in concept and 
     effective in practice.'' Reflecting the sentiment of the NRC 
     study, S. 493 preserves the program's concept and improves 
     its effectiveness.
       This legislation ensures the economic engine of our 
     nation--small businesses--will have access to a larger share 
     of federal research funding. This is timely and necessary 
     given the fragile state of our economy. These programs play a 
     critical role in our innovation ecosystem by providing 
     important competitively awarded seed funding for promising 
     innovative ideas. With proper nurturing, these ideas will 
     grow into engines of economic growth and the solutions for 
     tomorrow's most pressing technological challenges.
       Dawnbreaker is a small women-owned business and we have had 
     the great fortune to work side-by-side with more than 3,000 
     SBIR recipients since 1992. We consistently hear from SBIR 
     awardees about the need for increased award levels so they 
     can further the maturation of their technologies; more 
     efficient program management across the agencies; and, the 
     need for additional commercialization support--this bill 
     remedies these concerns and accomplishes a lot more.
       S. 493 ensures that our nation's most important small 
     business research and development program will continue while 
     operating more efficiently. Dawnbreaker supports S. 493, and 
     we thank you both for your efforts to see this deserving 
     program reauthorized and improved.
           Sincerely,
                                                   Jenny C. Servo,
     President.
                                  ____



                                    Small Business California,

                                 San Francisco, CA, March 8, 2011.
     Hon. Mary Landrieu,
     Dirksen Senate Office Building,
     Washington, DC.
       Dear Senator Landrieu: Small Business California supports 
     greater private sector participation in the market for 
     Federal Research and Development, and especially increased 
     engagement of small businesses through open, merit-based, and 
     competitive bidding.
       The R&D dollars spent at small business deliver outsized 
     returns. As of 2005, the Small Business Innovation Research 
     (SBIR) program has created over 87,000 patents. Overhead 
     rates at many small companies are 1/2 to 1/3rd of the 
     administrative costs typical of larger organizations.
       The employment of scientists and engineers at small 
     companies has grown rapidly over the last 20 years, now 
     accounting for more than 50% of scientists and engineers in 
     the United States. Nothing could be more critical to the 
     competitiveness of the United States than to open the Federal 
     marketplace to participation by the fastest growing and the 
     most productive sector of the economy, America's small 
     businesses.
       Small Business California is therefore pleased to support 
     S. 493 to reauthorize the highly successful SBIR program.
           Sincerely,
                                                      Scott Hauge,
     President.
                                  ____

                                       National Defense Industrial


                                                  Association,

                                     Arlington, VA, March 8, 2011.
     Hon. Mary L. Landrieu,
     United States Senate, Senate Committee on Small Business and 
         Entrepreneurship,
     Washington, DC.
       Dear Madam Chairwoman: On behalf of the 1,743 corporate 
     members and over 87,755 individual members of the National 
     Defense Industrial Association (NDIA), I am writing to 
     express our support for S. 493, the SBIR/STIR Reauthorization 
     Act of 2011.
       Small business represents about two thirds of NDIA's total 
     membership and we regard the SBIR program as the nation's 
     most viable tool in leveraging small business resources that 
     employ about half of the U.S. workforce. American small 
     businesses currently employ more than half of all U.S. 
     scientists and engineers, yet have access to less than five 
     percent of government research and development funds. One 
     critical access point to those funds is the SBIR Program. 
     SBIR awards have led to important developments in 
     technologies that directly supported our war fighters.
       As I have previously testified before Congress, NDIA has a 
     laser focus on American competitiveness in a global defense 
     industry that increasingly challenges our members for 
     primacy. We have therefore concluded that small business 
     resources offer our defense industry the competitive 
     advantages needed in these especially difficult economic 
     times.
       Madam Chairwoman, NDIA and its member companies support S. 
     493 and urge the Senate to consider this bill as promptly as 
     possible. We thank you for your leadership and commitment to 
     work in support of small businesses.
       If NDIA can be of any further assistance, please feel free 
     to have a member of your staff contact Mr. Peter Steffes, 
     Vice President Government Policy for NDIA.
           Sincerely and respectfully,

                                     Lawrence P. Farrell, Jr.,

                                          Lt. General, USAF (Ret),
     President and CEO.
                                  ____

                                                   The New England


                                          Innovation Alliance,

                                                   March, 7, 2011.
     Hon. Mary L. Landrieu,
     Chair, Committee on Small Business & Entrepreneurship, United 
         States Senate, Washington, DC.
       Dear Senator Landrieu: The New England Innovation Alliance 
     represents scores of small high technology businesses with a 
     vital interest in the SBIR and STTR programs. We know that 
     you understand how important this program is in creating 
     advanced technologies, products and jobs. However, SBIR and 
     STTR have been operating under ten continuing resolutions 
     since 2008. It is scheduled to expire on May 31, 2011. This 
     uncertainty has adversely affected small business and the 
     SBIR/STTR program, and it needs to be reauthorized 
     immediately.
       It should be noted that NEIA companies have worked closely 
     with university researchers across the country, providing 
     over $50M in subcontracts to more than 60 universities over 
     the past five years. We believe that small high tech 
     companies and the SBIR/STTR program provide the ideal bridge 
     from academia to the marketplace, while providing future 
     employment to tens of thousands of science and engineering 
     graduates.
       The New England Innovation Alliance supports the passage of 
     Senate Bill S. 493.
           Respectfully,
                                                  Robert F. Weiss,
     Chairman.
                                  ____

                                                  National Venture


                                          Capital Association,

                                                    March 8, 2011.
     Hon. Mary L. Landrieu,
     Chairwoman, Senate Small Business Committee, U.S. Senate, 
         Russell Senate Office Building, Washington, DC.
     Hon. Olympia J. Snowe,
     Ranking Minority Member, Senate Small Business Committee, 
         U.S. Senate, Russell Senate Office Building, Washington, 
         DC.
       Dear Senators Landrieu and Snowe: On behalf of the National 
     Venture Capital Association (NVCA) and its members, I am 
     writing in support of Senate passage of S. 493, the SBIR/STTR 
     Reauthorization Act of 2011, which reauthorizes the Small 
     Business Innovation Research (SBIR) and Small Business 
     Technology Transfer (STTR) programs. This legislation 
     represents a fair compromise to ensure that America's most 
     innovative small businesses can once again have access to 
     existing government incentives to grow jobs by 
     commercializing new discoveries.
       In particular, NVCA supports the bill's provisions allowing 
     greater access to SBIR funds for majority owned venture-
     backed small businesses and fixing the affiliation rules to 
     ensure these companies will be able to once again participate 
     in the program. Many small businesses that are developing 
     truly disruptive innovations rely on venture capital 
     investment to help bring breakthrough products to market and 
     grow U.S. jobs. The legislation will correct a regulatory 
     interpretation made by SBA in 2003 which revoked the 
     eligibility of many venture-backed companies from 
     participating in the program. This compromise will help to 
     ensure that small U.S. venture-backed companies have 
     increased access to capital for meritorious cutting-edge 
     early-stage research.
       At a time when our country needs to build new businesses, 
     the venture capital industry believes that the best use of 
     government dollars is to leverage public/private partnerships 
     and we are committed to working with the government to bring 
     a steady stream of innovation and economic value to market. 
     S. 493 is a positive step forward to allow venture-backed 
     companies to have a fair chance to thrive under the SBIR 
     program alongside non-venture-backed counterparts. Doing so 
     will only strengthen the future success of the program.

[[Page 4017]]

       For these reasons, I hope the Senate will move quickly and 
     pass S. 493, the SBIR/STTR Reauthorization Act of 2011, and 
     work with the House on an appropriate compromise prior to the 
     May 31, 2011 reauthorization deadline.
           Sincerely,
                                                   Mark G. Heesen,
     President.
                                  ____

                                                    Small Business


                                           Technology Council,

                                                    March 7, 2011.
     Hon. Mary Landrieu,
     U.S. Senate, Dirksen Senate Office Building, Washington, DC.
       Dear Senator Landrieu: As the nation's largest tech-
     oriented small business organization representing diverse 
     industries, the Small Business Technology Council (SBTC) 
     would like to express its support on behalf of its members 
     for S. 493, ``The SBIR/STTR Reauthorization Act of 2011''. 
     This bipartisan legislation is the result of years of 
     negotiations and compromise between both parties and the many 
     organizations that have a stake in this program. It is thanks 
     to the hard work and leadership of yourself and Ranking 
     Member Snowe that an agreement between those stakeholders was 
     finally reached.
       The Small Business Innovation Research (SBIR) Program is 
     one of the most successful innovation programs in the 
     country, providing technology-oriented small businesses with 
     seed-stage R&D funding that they otherwise would not have 
     access to. It has been praised by multiple studies from the 
     National Academies of Science, and has inspired similar 
     programs in foreign countries such as the UK, Japan, South 
     Korea, and the Netherlands. Not only does this program spur 
     technological innovation and entrepreneurship, it helps 
     create high-tech jobs, and does so without increasing Federal 
     spending.
       This program is currently under its 10th continuing 
     resolution, and is set to expire on May 31, 2011. While most 
     agree this is a good program that deserves to be 
     reauthorized, disputes over what should be in the 
     reauthorization legislation and proposed changes to the 
     program have held it up until now. Those disputes have 
     finally been resolved, and the current legislation is 
     supported by all stakeholders. It has been over two years 
     since the last reauthorization period ended, and after years 
     of uncertainty and short-term continuing resolutions, the 
     SBTC asks all Senators to support S. 493, and urges the swift 
     passage of this important legislation.
           Sincerely,
                                                   Jere W. Glover,
     Executive Director.
                                  ____

                                                     Biotechnology


                                        Industry Organization,

                                    Washington, DC, March 7, 2011.
     Hon. Mary Landrieu,
     Chair, U.S. Senate Committee on Small Business and 
         Entrepreneurship, Russell Senate Office Building, 
         Washington, DC.
     Hon. Olympia Snowe,
     Ranking Member, U.S. Senate Committee on Small Business and 
         Entrepreneurship, Russell Senate Office Building, 
         Washington, DC.
       Dear Chair Landrieu and Ranking Member Snowe: On behalf of 
     the Biotechnology Industry Organization (BIO) and our more 
     than 1,100 biotechnology companies, academic institutions, 
     state biotechnology centers and related organizations, I am 
     writing in support of S. 493, legislation to reauthorize the 
     Small Business Innovation Research (SBIR) and Small Business 
     Technology Transfer Program (STTR) programs. This bill 
     represents a balanced approach to ensure that America's most 
     innovative small businesses can access existing incentives to 
     grow jobs by commercializing new discoveries. As such, I 
     commend you for your introduction of S. 493 and I urge the 
     committee to favorably report the legislation to the full 
     Senate for prompt consideration.
       In particular, I am writing in support of the bill's 
     provisions allowing greater access to SBIR funds for small 
     businesses reliant upon venture capital financing. Small 
     biotechnology, medical device and other life sciences firms 
     increasingly rely on venture capital investments to fund 
     research and development. The legislation will correct a 
     regulatory interpretation made by SBA in 2003 which revoked 
     the eligibility of many venture capital-reliant small 
     companies from participating in the SBIR and STTR programs 
     over the last several years. This provision will ensure that 
     many of America's most innovative small businesses are not 
     excluded simply because of how they raise capital and can 
     once again compete in the SBIR and STTR programs based on 
     scientific merit. The legislation will help to ensure that 
     small, U.S. biotech companies have increased access to 
     capital for meritorious cutting-edge, early-stage research.
       Small biotechnology companies face the constant challenge 
     of raising sufficient capital to fund biomedical research. 
     This funding shortage is most acute for research projects at 
     the earliest stages, exactly the point at which SBIR funds 
     can be most productive in fostering science and innovation. 
     By filling this market gap, SBIR funds have helped small 
     biotechnology companies continue lines of medical research 
     that might otherwise go unfunded. The legislation will 
     increase access to critical, early-stage sources of funding 
     for small businesses, including small biotechnology firms, 
     thus facilitating economic growth, job creation, new 
     breakthrough therapies for patients in need, and American 
     economic competitiveness in the global economy. This is 
     exactly the intent of the SBIR program, as created in 1982.
       S. 493 represents a compromise to ensure that America's 
     small businesses remain at the forefront of global 
     innovation. While the legislation does not give any single 
     interested party in the debate over reauthorization all that 
     it might want, the legislation creates a framework that will 
     help move the process forward and will hopefully ensure that 
     SBIR reauthorization is enacted into law this year. The bill 
     recognizes that the Small Business Innovation Research (SBIR) 
     Program--last reauthorized in 2000--plays an important role 
     in the development of new breakthrough therapies to improve 
     human health, and must be updated to reflect the new 
     realities facing America's small businesses in the 21st 
     Century.
       For these reasons, I urge the committee to favorably 
     discharge S. 493 so that it can be passed promptly by the 
     Senate.
           Sincerely,
                                               James C. Greenwood,
     President and CEO.
                                  ____


 Where Do Innovations Come From? Transformations in the U.S. National 
                      Innovation System, 1970-2006

                 (By Fred Block and Matthew R. Keller)

       How should the United States craft policies that 
     effectively spur technological innovation? With increasing 
     competitive challenges from other nations, particularly in 
     technology and innovation-based sectors once thought to be 
     largely immune from foreign competition, there is increasing 
     interest in crafting policies to help spur innovation. But if 
     innovation policies are to be effective, it's critical that 
     they be based on an accurate understanding of the U.S. 
     innovation system--in particular, an understanding of where 
     U.S. innovations come from. This report does this by 
     analyzing the sources of award-winning innovations over the 
     past few decades. It finds that the sources of these 
     innovations have changed in two key ways. First, large firms 
     acting on their own account for a much smaller share of 
     award-winning innovations, while innovations stemming from 
     collaborations with spin-offs from universities and federal 
     laboratories make up a much larger share. Second, the number 
     of innovations that are federally-funded has increased 
     dramatically. These findings suggest that the U.S. innovation 
     system has become much more collaborative in nature. Federal 
     innovation policy needs to reflect this fact.


               Analysis of Data on Funding of Innovations

       The growing weight of public institutions as the source of 
     U.S. innovations that win R&D 100 Awards and the growing role 
     of interorganizational collaboration in U.S. innovations are 
     suggestive that public fund- ing has become steadily more 
     important to the U.S. innovation process in recent years. 
     Nevertheless, it is necessary to probe a bit further, because 
     the U.S. firms coded as ``private'' are sometimes recipients 
     of federal funding--sometimes for the precise R&D activity 
     that wins the award.
       Back in the 1970s, for example, some of the laboratories of 
     the Fortune 500 firms that were frequent R&D 100 Award 
     winners received substantial amounts of direct federal 
     funding. And in the more recent period, there has been a 
     proliferation of programs through which government agencies 
     support private sector R&D. An example of the latter is the 
     growing importance of Small Business Innovation Research 
     (SBIR) firms among the award winners.
       The SBIR program, established in the 1980s, is one of the 
     most important mechanisms through which the federal 
     government supports smaller innovative firms, including the 
     firms that we have labeled as supported spinoffs. The SBIR 
     program is a set-aside program; all government agencies that 
     finance a large amount of R&D must set aside 2.5 percent of 
     their R&D budgets for projects that originate with small 
     businesses. The program awards up to $750,000 in no strings 
     support for projects in Phase I and up to $1.5 million for 
     Phase II projects that have shown significant progress in 
     meeting the initial objectives. Some of the SBIR firms have 
     now been in existence for 20 or more years, and at least one 
     has grown to become a Fortune 500 firm.
       Figure 6 shows the total number of past and present SBIR 
     winners among winners of R&D 100 Awards.
       The results show that these SBIR-nurtured firms 
     consistently account for a quarter of all U.S. R&D 100 Award 
     winners--a powerful indication that the SBIR program has 
     become a key force in the innovation economy of the United 
     States.
       Figure 7 shows a more comprehensive measure of the role of 
     federal financing of R&D 100 Award winners in the United 
     States in 1975 and in 2006. The bottom part of the bar graph 
     for each year shows the number of award-winning innovations 
     from public sector entities in the United States that rely

[[Page 4018]]

     heavily on federal funding. As indicated earlier, the number 
     of award-winning innovations from public sector entities 
     increased dramatically from 14 in 1975 to 61 in 2006.
       The top part of the bar graph for each year in Figure 7 
     shows the number of Fortune 500 and ``other'' U.S. firms that 
     received at least 1 percent of their revenues from the 
     federal government. The 1 percent screen picks up both large 
     defense contractors and firms that have received substantial 
     federal grants to support their R&D efforts. In 1975, 23 
     innovations that won R&D 100 Awards were developed by private 
     firms in the United States that received at least 1 percent 
     of their revenues from federal support. Prominent among these 
     firms was General Electric, which developed nine of the 
     award-winning innovations that year.
       There is evidence that in 2006. the federal government 
     directly funded three of the five private collaborations in 
     the United States that produced innovations that received R&D 
     100 Awards. Of the 20 ``other firms'' that won awards in 
     2006, 13 had federal support above the 1 percent threshold 
     and we were able to link the federal money directly to the 
     specific innovation that received the award. Hence, 16 of 
     these ``private'' innovations count as federally funded. The 
     overall result in Figure 7 is that the number of federally 
     funded innovations rises from 41 in 1975 to 77 in 2066.
       In 2006, only 11 of the U.S. entities that produced award-
     winning innovations were not beneficiaries of federal 
     funding. And even among this group of 11, there were some 
     ambiguous cases. Dow Automotive won an R&D 100 Award for its 
     work in developing an adhesive used with composite auto parts 
     that was installed in Volkswagen cars. But a few years 
     earlier, Dow had been a beneficiary of a substantial grant 
     from the Advanced Technology Program in the Department of 
     Commerce that was designed to accelerate the use of 
     composites in automobiles. Two other winning firms--Brion 
     Tech and MMR Technologies--were recent spinoffs from Stanford 
     University, but since the firms had not received federal 
     support, they were not coded as ``supported spinoff''; 
     however, it is likely that the professors behind the 
     companies received federal research grants while at Stanford. 
     Finally, we were unable to ascertain whether any of those 
     remaining firms received research support from federal 
     laboratories.
       In short, Figure 7 probably understates the magnitude of 
     the expansion in federal funding for innovations in the 
     United States that R&D 100 Awards between 1975 and 2006. 
     After all, in 1975, we counted innovations as federally 
     funded even if support was not going to the specific unit of 
     the firm that was working on a particular innovation. For 
     2006, however, a demonstration of federal support required 
     showing that the federal funds were going to the same unit 
     that was responsible for the particular technology that won 
     the award.
       The fundamental point is that even in the period that 
     Fortune 500 corporations dominated the U.S. innovation 
     process, they drew heavily on federal funding support. If one 
     is looking for a golden age in which the private sector did 
     most of the innovating on its own with federal help, one has 
     to go back to the era before World War II. Nevertheless, over 
     the last 40 years, the R&D 100 Awards indicate a dramatic 
     increase in the federal government's centrality to the 
     innovation economy in the United States. In the earlier 
     period, U.S. technology policies were almost entirely 
     monopolized by the military and space programs. More 
     recently, a wide range of federal agencies that are not part 
     of the Department of Defense are involved in supporting 
     private sector R&D initiatives. Key agencies now include the 
     Department of Commerce, Department of Energy, National 
     Institutes of Health, Department of Agriculture, National 
     Science Foundation, and Department of Homeland Security. In 
     addition, over the last 20 years, state governments have 
     become much more involved in technology policy, with many, if 
     not all states funding technology-based economic development 
     activities. To the extent that state programs help small 
     firms or university and federal lab innovations, their role 
     would not be picked up in this analysis.


                               DISCUSSION

       Back in 1887, Thomas Edison built an invention factory that 
     has long been seen as the inspiration for the rise of the 
     corporate research labs established by large U.S. firms 
     during the 20th century. Our analysis suggests that although 
     large corporations in the United States emulated Edison's 
     model for decades, this pattern became much weaker after the 
     corporate reorganizations of the 1970s and 1980s. Thus, the 
     ``era of Edison'' did not last the full century.
       It is not clear why the relative role of Fortune 500 
     companies in the U.S. innovation system has declined. We can 
     hypothesize three factors. First, it seems likely that big 
     corporations facing relentless pressures from the financial 
     markets have been forced to cut back on expenditures that do 
     not immediately strengthen the bottom line. In some cases, 
     corporate cutbacks have meant eliminating laboratories 
     altogether; in other cases, such cutbacks have meant reducing 
     expenditures on early stage technology development that is 
     often both expensive and risky and is more likely to lead to 
     the kind of radical breakthroughs that win awards like the 
     ones analyzed here
       A second factor that may be involved in the decline in 
     Fortune 500 companies in the U.S. innovation system is that 
     several factors, including the rise of computers and the 
     Internet, have made it much easier for small firms to enter 
     markets previously dominated by large firms. Many 
     technologies today require less capital-intensive production 
     processes (e.g., software), making it possible for small 
     firms to innovate the technologies for which they received 
     R&D 100 Awards. In other industries (e.g., 
     biopharmaceuticals), small, innovative companies can contract 
     out manufacturing (e.g., of new drugs). Because small and 
     mid-sized firms can now better compete in product markets, 
     they have dramatically increased their R&D investments. In 
     fact, while the ratio of R&D investments to U.S. gross 
     domestic product more than doubled between 1980 and 2000, 
     almost all of that increase was due to increased R&D 
     investments by small and mid-sized firms with fewer than 
     5,000 employees. Moreover, large firm R&D may now be more 
     focused on improving existing product lines, as opposed to 
     generating radically new innovations.
       The third factor that may have contributed to the decline 
     of Fortune 500 companies dynamic is a change in the 
     employment preferences of scientists and engineers. As the 
     employment landscape has shifted, it seems quite possible 
     that many talented scientists and engineers have voted with 
     their feet and have left work in corporate labs in favor of 
     work at government labs, university labs, or smaller firms. 
     More research is necessary to tease out the causes.
       But returning to the history of the Edison lab suggests a 
     longer term and more structural explanation for the recent 
     shifts in the U.S. innovation system that we have uncovered. 
     Revisionist scholars have discovered that Edison's laboratory 
     actually operated differently from the corporate labs of the 
     20th century. It is true that Edison assembled a team of 
     scientists and engineers that had built up considerable 
     expertise in working with electrical devices--but Edison's 
     team divided its time between internal projects and external 
     projects. The Edison laboratory did extensive contract work 
     for other firms, helping them develop solutions to particular 
     problems that their industry faced. Edison's employees worked 
     closely with employees with technical knowledge from those 
     other firms.
       The argument by revisionist historians is that the 
     extraordinary productivity of the Edison labs was a result of 
     the systematic interaction between Edison's team and other 
     groups of experts with very specific types of knowledge. When 
     U.S. corporations sought to emulate Edison's model in the 
     20th century, though, they built elaborate laboratories that 
     tended to cut their in-house technologists off from these 
     systematic encounters with experts in other organizations. 
     This choice fit with the model of the corporation that was 
     exemplified by Henry Ford's decision to produce his own steel 
     at the River Rouge plant. The idea was that bringing these 
     activities, including R&D, fully in-house maximized 
     management's ability to deploy the organization's resources.
       What we have found in the United States at the end of the 
     20th century, though, is basically a return to Edison's 
     model--with successful research organizations; public. or 
     private, developing a highly productive mix of internal and 
     external projects. There appear to be an increasing number of 
     private sector research laboratories that combine their own 
     internal projects--often funded with federal money--with 
     contracted research for other firms. Some of their 
     innovations show up as a winners of R&D 100 Awards.


                               CONCLUSION

       These findings suggest that the U.S. federal government's 
     role in fostering innovation--both in terms of 
     organizational, auspices and funding--across the U.S. economy 
     has significantly expanded in the last several decades. But 
     the federal government's role is not to act as the agent of 
     centrally planned technological change.
       In Chalmers Johnson's classic account of the Japanese model 
     of industrial policy, he shows how government officials, 
     working at the Ministry of Trade and Industry, operated as 
     both coordinators and financiers for the conquest by Japanese 
     firms of new markets. Japanese government officials were 
     implementing a shared plan that linked investments in 
     particular technologies with specific business strategies to 
     win in particular markets--both domestically and 
     internationally. That strategy may have allowed Japan to 
     catch up the leading nations in an array of industries, but 
     it did not and does not fit the new innovation environment 
     where cutting-edge innovation produced in a new collaborative 
     and dispersed models is the key to success. It is for that 
     reason that many other nations have shifted their innovation 
     policies to be less directed.
       In the United States, there is no central plan for 
     innovation, and different federal agencies engage in support 
     for new technologies often in direct competition with other 
     agencies. The federal government had created a decentralized 
     network of publicly funded laboratores where technologists 
     will

[[Page 4019]]

     have incentives to work with private firms and find ways to 
     turn their disoveries into commercial products. Moreover, an 
     alphabet soup of different federal programs provides agencies 
     with opportunities to help fund some of these more compelling 
     technological possibilities, just as there has been 
     increasing support, at both the federal and state levels, for 
     industry-university research collaboration.
       Complementing these decentralized efforts are, more 
     targeted federal government programs that are designed to 
     accelerate progress across specific technological barriers. 
     Today, for example, the. Advanced Research Projects Agency in 
     the Department of Defense is prioritizing support for 
     computer scientists to find ways to overcome the obstacles to 
     creating.ever more powerful microchips for computers. It is 
     also helping biological scientists find ways to accelerate 
     the production of large batches of vaccine, which would be 
     useful to protect the population both against biological 
     weapons and a global pandemic of a deadly influenza. For 
     these targeted efforts, officials in these government offices 
     decide to renew grant support to one research group because 
     it has made progress, withhold it from another research group 
     that appears to be heading towards a dead end, and encourage 
     connections with still another research group--working on a 
     seemingly unrelated problem--because they suspect that the-
     third group's, findings might have relevance for solving the 
     targeted problem.
       Both types of U.S. government innovation initiatives--
     decentralized and targeted--are increasingly described with 
     the language of venture capital. Private sector venture 
     capitalists, such as the famous firms in Silicon Valley, have 
     an open door policy for scientists and engineers who have a 
     bright idea for a new business. Of every hundred pitches they 
     hear, they might decide to invest in 20 with the idea that if 
     even one or two of the 20 are successful, then they make vast 
     amounts of money that they can recycle into new rounds of 
     initial investments. But the key assumption behind venture 
     capital is that even after careful screening, most of these 
     new business ventures will fail. Some won't be able.to 
     develop the promised technology, some won't find a market for 
     their particular innovation, and some won't be able to build 
     an organization capable of exploiting the Market. 
     Nevertheless, the enormous gains from the small percentage of 
     winners are more than enough to cover the bases from the 
     others.
       Many U.S. government officials, now use the same rhetoric. 
     They know that most new startups begun by scientists and 
     engineers at universities or government laboratories will 
     fail, but the minority that succeed will create jobs and 
     advance new technologies. With the decentralized approach, 
     they may provide support to several hundred firms with the 
     idea that 20 to 50 might actually flourish. With the more 
     targeted efforts, they realize that in each funding cycle, 
     only a minority of the researchers will make any significant 
     headway on the key problems. But the idea is that over time, 
     a few incremental advances will eventually set the stage for 
     the big breakthrough that they are looking for.
       The largest federal government program that fits this 
     venture capital model is the Small Business Innovation 
     Research (SBIR) program. In 2004, the SBIR program gave out 
     more than $2 billion for some 6,300 separate research 
     projects. The success of programs such as SBIR helps to 
     explain what is perhaps the most surprising turn in federal 
     innovation policy of the last decade.
       Starting with the Central Intelligence Agency (CIA) in 
     1999, a number of government agencies have now set up their 
     own venture capital operations. The CIA's venture capital 
     arm, In-Q-Tel, maintains its own Website and lists 90 recent 
     startup firms in which it has invested. Congress provided a 
     $500 million initial fund, and just as with private sector 
     venture capital, the idea is that the initial fund will be 
     replenished and expanded as In-Q-Tel sells its stake in those 
     firms that have been successful. The Department of the Army 
     has followed the CIA model, and the Department of Energy has 
     partnered with Battelle--the large nonprofit organization 
     that manages several of the department's labs--which has now 
     created its own not-for-profit venture capital arm with an 
     emphasis on supporting startup firms that originated in the 
     laboratories.
       Although this explicit turn towards venture capital by U.S. 
     government agencies is understandable, it will not, by 
     itself, solve what we see as the main weaknesses in the 
     current system of federal support for innovation in the 
     United States. In our view, the system of federal support for 
     innovation has enormous strengths, but it also suffers from 
     three major, interconnected weaknesses. First, the system 
     carries decentralization to an unproductive extreme. Under 
     current arrangements, it is entirely possible that five 
     different government agencies might be supporting 30 
     different teams of technologists working on an identical 
     problem without a full awareness of the duplication of 
     efforts. This situation is a particular problem if different 
     groups are unable to learn from each other in a timely 
     fashion. Second, because the importance of the federal role 
     in fostering innovation is not widely recognized, federal 
     programs in support of innovation lack the broad public 
     support that would be commensurate with their economic 
     importance. Third, the budgetary support for the current 
     system is inadequate and uncertain. Funding for more 
     collaborative research and commercialization efforts are 
     relatively limited, and total federal levels of R&D spending 
     have been declining in real terms since 2003. These declines 
     put the entire U.S. innovation system at risk.
       This analysis has shown a dramatic shift in the locus of 
     innovation in the U.S. economy that has occurred over the 
     last three decades. We hope these findings spur a broad 
     debate about the changing role of the federal government in 
     our national innovation system.

  Ms. SNOWE. Mr. President, the Biotechnology Industry Organization 
noted:

       [t]his bill represents a balanced approach to ensure that 
     America's most innovative small businesses can access 
     existing incentives to grow jobs by commercializing new 
     discoveries.

  The U.S. Chamber of Commerce said:

       [t]his landmark compromise bill, if passed into law, would 
     unlock the door for entry for businesses that acquire equity 
     funding through venture capital firms without diminishing the 
     programs effectiveness for traditional small businesses, thus 
     setting the stage for a robust and revitalized SBIR program.

  That is really our goal--a modern program that recognizes the reality 
of today's innovative small businesses and provides the appropriate 
environment in which they can flourish.
  Given the nature of the compromise we have reached--from increasing 
allocations over a number of years to allowing limited participation by 
majority-owned venture capital firms--we must allow time for these 
provisions to take shape and enhance these programs. That is why our 
legislation reauthorizes these measures for 8 years, through 2019. 
Indeed, the past two reauthorizations of the SBIR program have been for 
8 years each--in 1992 and 2000--as was the last reauthorization for the 
STTR program in 2001.
  This long-term reauthorization will allow more small businesses to 
access this funding without the fear of constant interruptions based on 
whims of whether Congress will extend these programs for an indefinite 
period of time. Indeed, a company's life cycle in either of these 
programs is by nature a multiyear process--a phase I award will last 6 
months, while a phase II award will last for 2 years. That timeframe 
does not include the time it takes for businesses to apply for funding 
and await a decision, as well as the time between three phases waiting 
for new solicitations from agencies.
  It will also allow the Government Accountability Office to 
effectively study the venture capital compromise over time to see if it 
is serving its intended purpose of allowing promising small businesses 
to utilize these resources. We include a provision in the bill 
mandating that the GAO issue a report on the subject 3 years after 
enactment and every 3 years thereafter. By reducing the length of the 
reauthorization, we would be allowing this delicate compromise to be 
relitigated immediately without the benefit of studying its impact, and 
we would effectively negate any modicum of certainty provided in the 
pending legislation.
  Finally, on the matter of procedure, I am very pleased the majority 
leader has indicated he will be allowing an open amendment process to 
this legislation. That is also important as well as necessary for 
working through these issues and others that are critical to our 
consideration.
  Mr. President, I thank you for the consideration, but I most 
especially thank the chair of the Small Business Committee for 
providing the kind of leadership that has been so essential to bringing 
this legislation forward. After 10 reauthorizations and for about 6 
years in the process, to bring it to this point will be critical for 
the innovation that is so essential to creating new products and to 
also creating new jobs we desperately need in our economy.
  Ms. LANDRIEU. Mr. President, I thank Senator Snowe. I could not have 
a better partner on this committee. Her expertise is noted and admired 
among the Members. She has served as a member of this committee--
oftentimes its chair--for many years. I appreciate her help and the 
help of her staff as well.

[[Page 4020]]

  In the 10 minutes we have left, I wish to add a couple of specifics 
of the compromise Senator Snowe has outlined.
  It is true that this program has been sputtering along on very 
uncertain terrain because of every 3-month or 6-month reauthorization 
hastily put forward because there has been no agreement on a few of the 
details. We finally reached an agreement on some of those details, the 
largest of which had to do with the percentage of awards that could be 
given or funded to companies that are owned by venture capitalists.
  This program was started as a small business program. Senator Snowe 
and I feel very strongly and the same to try to keep it as a small 
business entrepreneurial program but to obviously recognize the changes 
and opportunities for capital presented by some venture capitalists. 
That has been the subject of the largest piece of negotiation. I am 
happy to say we have letters of support from the Bay Area Innovation 
Alliance, the BioDistrict from New Orleans, just to name one, the 
Biotechnology Council. They are all very supportive of this compromise.
  Mr. President, I ask unanimous consent to have printed in the Record 
these letters of support.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     Hon. Mary L. Landrieu,
     Committee on Small Business & Entrepreneurship, U.S. Senate, 
         Washington, DC.
     Subject: Senate Bill S. 493
       Dear Senator Landrieu: The Bay Area Innovation Alliance, 
     representing more than 60 technology companies in the San 
     Francisco Bay Area who participate extensively in the SBIR/
     STTR programs, is pleased to support compromise legislation 
     for SBIR reauthorization.
       We urge a timely passage of Senate Bill S. 493.
           Sincerely,
                                                Christopher White.
     Bay Area Innovation Alliance,
                                  ____



                                      Biodistrict New Orleans,

                                   New Orleans, LA, March 9, 2011.
     Hon. Mary Landrieu,
     Chair, Senate Committee on Small Business and 
         Entrepreneurship, U.S. Senate, Washington, DC.
       Dear Chairwoman Landrieu: BioDistrict New Orleans is 
     pleased to support your compromise Small Business Innovation 
     Research (SBIR) and Small Business Technology Transfer (STTR) 
     programs reauthorization legislation. Rebuilding the New 
     Orleans economy around the biotech, digital media and other 
     knowledge-based industries is our #1 priority.
       As you know, SBIR is the nation's largest source of early-
     stage research and development funding. Providing more than 
     50,000+ patents since its inception, SBIR has successfully 
     harnessed the proven innovative power of small, technology-
     based businesses to meet the nation's technology needs, and 
     New Orleans needs to become a center of such activity.
       Unfortunately, the reauthorization of this demonstrably 
     effective program has been beset by various tribulations, 
     court interpretations and special interests. This has lead to 
     nine short-term reauthorizations since 2008. These repeated, 
     temporary extensions have wreaked havoc on agencies' ability 
     to make strategic decisions in regard to the programs. The 
     uncertain future of the program has also deterred potential 
     participants and investors.
       Thankfully, S.B. 493 allows for increased venture-capital 
     participation but retains the small-business integrity of the 
     program. This bill has been endorsed by the Biotechnology 
     Industry Organization and the Small Business Technology 
     Council, the nation's largest tech-oriented small business 
     organization from diverse industries.
       The BioDistrict also fully supports this legislation and 
     urges its swift adoption. We wish to thank you for your 
     unflagging and indispensable efforts to protect the small-
     business focus of the SBIR and STTR programs and achieve this 
     balanced and fair compromise reauthorization package.
           Sincerely,
                                              Bonita A. Robertson,
     Special Counsel.
                                  ____

                                           National Small Business


                                                  Association,

                                    Washington, DC, March 7, 2011.
     Hon. Mary Landrieu,
     U.S. Senate,
     Washington, DC.
     Hon. Olympia Snowe,
     U.S. Senate,
     Washington, DC.
       Dear Chairwoman Landrieu and Ranking Member Snowe: The 
     National Small Business Association is pleased to support the 
     SBIR/STTR Reauthorization Act of 2011 (S. 493). Reaching 
     150,000 small-business owners across the nation, NSBA is the 
     country's oldest small-business advocacy organization and a 
     longtime supporter of the Small Business Innovation Research, 
     SBIR, program.
       As you both know, the SBIR program is the nation's largest 
     source of early-stage research and development funding. 
     Providing more than 50,000 patents since its inception, SBIR 
     has successfully harnessed the proven innovative power of 
     small, technology-based businesses to meet the nation's 
     technology needs. On average, SBIR generates seven new 
     patents per day--which is far more than all U.S. universities 
     combined, at less than one-twelfth their level of federal 
     research and development funding.
       Unfortunately, the reauthorization of this demonstrably-
     effective program has been beset by various tribulations. 
     This has led to ten short-term reauthorizations since 2008. 
     These repeated, temporary extensions have wreaked havoc on 
     agencies' ability to make strategic decisions in regard to 
     the programs. The uncertain future of the program also has 
     deterred potential participants and investors.
       Thankfully, a compromise reauthorization package--which 
     allows for increased venture-capital participation but 
     retains the small-business integrity of the program--has been 
     forged. This compromise has been endorsed by the 
     Biotechnology Industry Organization, the National Venture 
     Capital Association, and the Small Business Technology 
     Council, the nation's largest tech-oriented small business 
     organization from diverse industries.
       NSBA also fully supports S. 493 and urges its swift 
     adoption. NSBA thanks you both for your unflagging and 
     indispensable efforts to protect the small-business focus of 
     the SBIR and STTR programs and achieve this balanced and fair 
     compromise reauthorization package.
           Sincerely,
                                                Todd O. McCracken,
     President.
                                  ____

                                      Smaller Business Association


                                               of New England,

                                       Waltham, MA, March 8, 2011.
     U.S. Senator Mary Landrieu, 
     Chairman, Senate Small Business & Entrepreneurship, Russell 
         Building, Washington, DC.
       Dear Senator Landrieu: The Smaller Business Association of 
     New England fully supports S. 493, which reauthorizes the 
     Small Business Research Innovation program for the next eight 
     years. Life sciences, defense, high technology and the energy 
     sectors in Massachusetts have been tremendous beneficiaries 
     of the SBIR/STTR programs averaging almost one quarter of a 
     billion dollars per year. This research and development 
     engine has spawned new revolutionary products that have been 
     utilized in an innovative way by the military and commercial 
     markets.
       The proposed incremental increases in the SBIR/STTR 
     formulas will only enhance the technology readiness of the 
     program and will provide incentives for further innovation.
       We think your compromise on the sticky venture capital 
     issue is an equitable one, particularly if it is inextricably 
     linked to the increase in the SBIR formula from 2.5 percent 
     to 3.5 percent. Secondly, the increased-size limits on Phase 
     I and Phase II and allowance of sequential phasing from I to 
     II appears to be reasonable and permits program flexibility 
     for both the agency and recipient.
       In summary, we think you and your staff have crafted an 
     excellent compromise in order to satisfy divergent interests 
     and most importantly, preserve the integrity of the SBIR/STTR 
     programs. Please let us know if there is anything else SBANE 
     can do to facilitate Senate 493. Thank you very much.
           Sincerely,
                                                  Robert A. Baker,
     President.
                                  ____



                                                  V-LABS, Inc.

                                     Covington, LA, March 8, 2011.
     Senator Mary Landrieu,
     U.S. Senate Building,
     Washington, DC.
       Dear Senator Landrieu: I am writing to give my support for 
     SBIR/STTR Reauthorization Bill (S. 493). I am also a 
     supporter of Senator Landrieu as a Louisiana resident. She 
     has worked tirelessly for the business community in 
     Louisiana. I have a small high tech company in Covington LA 
     and have received several SBIR grants that enabled us to do 
     research that we could not have afforded. I have worked many 
     years in support of the development of biotechnology in 
     Louisiana.
       I am Councilor of the Division of Small Chemical 
     Businesses, SCHB, of the American Chemical Society. The SBIR/
     STTR program is very important to our members. We offer 
     symposia to our membership at national and regional meeting 
     to share the opportunities of the SBIR/STTR program. The 
     Division supports reauthorization of the SBIR/STTR program.
       I have campaigned for support of the program by the 
     American Chemical Society, ACS, for a number of years. The 
     American Chemical Society has 163,000 members; it is the 
     largest scientific society in the world. The support of the 
     program was announced

[[Page 4021]]

     by the ACS Board of Directors in December, 2010 in a position 
     statement, ``A Competitive U.S. Business Climate: The Role of 
     Chemistry'', on creating new U.S. based science jobs. The 
     complete publication is on the ACS webpage under policy, 
     www.acs.org/policy The last paragraph of this statement 
     reads: ``Recommendations: Small Business and 
     Entrepreneurship--ACS supports policies that foster the 
     growth of small research and development businesses and 
     encourage entrepreneurship: Expanding funding for the Small 
     Business Innovation Research (SBIR), Small Business 
     Technology Transfer (STTR), and Small Business Investment 
     Companies (SBIC) programs and reforming these programs to 
     make direct research funding for small businesses more easily 
     available Providing incentives for larger companies to expand 
     investments in start-up research and development businesses''
       I thank you for your work as well as the Committee on Small 
     Business in introducing this bill S. 493 for the 
     Reauthorization of the SBIR/STTR program.
           Yours truly,
                                            Sharon V. Vercellotti,
                                                        President.

  Ms. LANDRIEU. Mr. President, CONNECT, which is out of the University 
of California, is another important player in this particular field, 
and Dawnbreaker, a commercialization company. They were part of helping 
us forge this important compromise.
  I also note that the guidelines of the awards have been raised in the 
first stage from $100,000 to $150,000 and from $750,000 to $1 million 
for phase II and allows for sequential phase II awards--another 
important change.
  I particularly thank Senator Coburn for agreeing to an 8-year 
extension. We think, for a program such as this which is dealing with 
technologies that sometimes take years to develop, that can be very 
promising, but it takes some planning, it takes patience. This is not a 
program that lends itself readily to 2- to 4-year reauthorizations. 
That is too much uncertainty for a program such as this. Maybe other 
programs in the Federal Government should go through 4-year and 5-year 
authorizations. Both Senator Snowe and I pressed for a longer time. 
Senator Coburn is somewhat reluctant, but we are very grateful that he 
and others stepped up and said 8 years would be a good compromise in 
that way. We are grateful. This will be a very important authorization 
because it will set the direction for the next 8 years for our Federal 
agencies.
  We have also made an important change--and I am very pleased about 
this because I think you can have the greatest programs in the world, 
but if you are not focused on quality, if you are not focused on 
exchanging best practices, if you are not focused on good management of 
those programs, even some of the best intentions fall apart or the 
taxpayers' money is wasted. We do not want to see that happen here. So 
we have set aside a small portion for administration, which was 
recommended by this study of oversight, so that the managers in each of 
these departments can be better trained to actually identify promising 
technologies, make sure they are requesting in the right areas the 
kinds of technologies they are looking for, and receive that 
information in a more professional way. That is an important component 
of this compromise--the 3-percent allocation for administration and 
oversight.
  As I said, it reauthorizes it for 8 years, and the arrangement 
between venture capital and small businesses--that kind of capsulizes 
the major changes.
  I do wish to recognize Senator Rockefeller's amendment that he put on 
in the 111th Congress which is a policy directive against waste, fraud, 
and abuse. Senator Rockefeller has been very helpful in this regard. 
His amendment, along with others, requires inspectors general in 
participating Federal agencies to establish fraud-detection measures, 
coordinate fraud information sharing between agencies, and provide 
fraud prevention related to education and training of the 
administration.
  In addition to all of this, it actually gets even better because 
Senator Snowe and I have figured out a way to reduce the cost from the 
last Congress to this Congress from $229 million over 5 years to $150 
million. We are being as efficient with taxpayers' dollars as we can, 
strengthening administration and fraud detection, giving a longer lead 
time and runway for some of these technologies.
  Again, we think this is a model program in the world. We do not 
think, we know that because of the research and review that has been 
done of this program and from what we hear from other countries. They 
wonder: How does your system work? This is one important aspect. The 
government does have a role to play--not the most significant role 
potentially but a portion of one of the most significant roles to play 
in promoting entrepreneurship, creativity, innovations, and expanding 
the number of patents that are issued in the United States by providing 
programs that give an open door, access, and level playing field to the 
smallest businesses in America to give them a chance to compete against 
some of the big guys. That is really what this is all about.
  Mr. President, let me see if the ranking member has anything else to 
add. We have a few minutes left. She may have one or two points to add 
as we close out before the lunch period.
  Ms. SNOWE. Mr. President, I thank the chairman. The points she raised 
are very critical because of the contributions these programs have made 
to our economy, most especially because much of the innovation that 
occurs in America comes from small businesses. In fact, this report by 
the Information and Innovation Technology Foundation underscores this 
point, that the innovations coming from big companies is actually on 
the decline. We really do depend on the entrepreneurial spirit of small 
businesses to create the kind of innovation we require in America if we 
are going to be on the vanguard of change and vanguard of technologies 
and which is so crucial in moving forward as a nation.
  The SBIR program in particular has played a very crucial role in that 
regard. I think this report truly does emphasize the degree to which it 
has played a paramount role over the years since the program was 
created in 1982. It certainly has had an extraordinary history in that 
regard.
  We talk about a lot of programs that we underwrite at the Federal 
level, but I can say this is a good use of taxpayers' dollars when we 
are thinking about how we maximize taxpayers' dollars within the 
Federal agencies that are now utilizing these programs, of which we 
have 11 different agencies that are setting aside the research and 
development funds specifically to ensure that small business has an 
allocation among the research and development dollars so they get their 
fair share because that is from where the innovation is derived in the 
final analysis. That certainly has been the indication of the many 
results we have achieved due to these programs, and that is what makes 
them outstanding in that regard.
  You can draw a cause and effect. Certainly, there is a correlation 
between the effectiveness of these programs among the agencies that 
award them to small businesses that then become the true laboratories 
for the innovation. That transformation, as this report indicated, has 
been central to the types of technologies that have emerged over the 
last three decades.
  We want to continue to advance these programs because they are 
undeniably beneficial and well worth the investments that are made by 
these agencies because of their required set-asides for these programs 
and to ensure that small businesses are part of the research and 
development funding that is in the billions of dollars at the Federal 
level, if you look at the collective budgets of just these 11 agencies. 
We want to make sure small businesses are key to our technological 
growth and, therefore, having these types of programs becomes a major 
force in developing our innovative economy, as this report indicated 
recently.
  Again, I wish to thank the Chair for her efforts in that regard.
  Ms. LANDRIEU. Mr. President, I thank Ranking Member Snowe and, 
according to the previous agreement, I think we are going to move to a 
quorum call at this point. Within a short period of time, I think the 
leadership is going to lay down two amendments and then, after lunch, 
of course,

[[Page 4022]]

we will be open to consider others. We are hoping they will be limited 
to the subject matter before us, but it is an open debate on this bill.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that the committee-
reported amendments be agreed to en bloc; the motions to reconsider be 
considered made and laid upon the table en bloc; the amended version of 
S. 493 be considered original text for the purposes of further 
amendment; that Senator Nelson of Nebraska then be recognized to offer 
an amendment to S. 493; that following the reporting of the Nelson 
amendment, the amendment be set aside and the Republican leader be 
recognized to offer a first-degree amendment to the bill; and following 
the reporting of the McConnell amendment, the Republican leader be 
recognized for up to 5 minutes for debate only relative to his 
amendment; that following the Republican leader's remarks, the Senate 
resume consideration of the Nelson amendment and Senator Nelson be 
recognized for up to 10 minutes for debate only relative to his 
amendment.
  Mr. President, I ask unanimous consent this be modified to allow the 
Republican leader to speak for whatever time he needs.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The committee-reported amendments were agreed to en bloc.)
  The PRESIDING OFFICER. The Senator from Nebraska.


                           Amendment No. 182

  Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent to 
call up the amendment I just sent to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The bill clerk read as follows:

       The Senator from Nebraska [Mr. Nelson] proposes an 
     amendment No. 182.

  Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent to 
dispense with further reading of the amendment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       At the appropriate place, insert the following:
       It is the sense of the Senate that it supports reducing its 
     budget by at least 5 percent. The Senate has made the 
     findings that:
       Finding that, Congress must pursue comprehensive deficit 
     reduction,
       Finding that, the nation is deeply involved in military 
     action on two fronts
       Finding that, Admiral Mullen has noted the most significant 
     threat to national security is the national debt
       Finding that, the nation is in fragile recovery from an 
     economic downturn that has spanned two administrations
       Finding that, the offices and agencies that serve Members 
     of Congress must be reduced along with the rest of the budget
       Finding that, in order to address the Nation's fiscal 
     crisis, the Senate should lead by example and reduce its own 
     legislative budget
       It is the sense of the Senate, that it should lead by 
     example and reduce the budget of the Senate by at least 5 
     percent.


                           Amendment No. 183

  The PRESIDING OFFICER. The Republican leader.
  Mr. McCONNELL. Mr. President, with gas prices on the rise, Americans 
want to know what Washington is going to do about it. So let me provide 
a little update: The White House has responded by locking up domestic 
energy supplies and pushing an energy tax that will drive gas prices up 
even higher and Democrats in Congress aren't doing anything at all.
  So we have a total disconnect right now between Democrats in 
Washington when it comes to gas prices. Both the White House and 
Democrats in Congress are acting as if they haven't seen a nightly 
newscast or driven by a gas station in weeks.
  Senator Inhofe, Senator Murkowski, and Senator Barrasso have done a 
terrific job of raising the alarm on the administration's efforts to 
lock up domestic energy, even as it continues to push costly new 
regulations at the Environmental Protection Agency. I wish to commend 
them for their efforts on this most important and timely issue. They 
have shown how American families are getting a double whammy right now. 
Refiners would pass the costs related to these regulations on to 
consumers, and the White House's efforts to lock up domestic energy 
production puts even more pressure on gas prices.
  If you are just tuning in, let's review what the White House has been 
up to on that front: They have resisted our push for American 
production offshore, onshore and in Alaska and the jobs that go along 
with it. They have canceled existing drilling permits and the jobs that 
come with them. They have needlessly delayed offshore leases, which 
even former President Clinton has referred to as ridiculous. They have 
imposed a moratorium on oil and gas drilling, which amounts to a 
moratorium on domestic energy-related jobs. They have proposed a tax on 
domestic energy production that might be called a ``minivan tax.'' Now 
they are trying to impose a backdoor national energy tax through the 
EPA.
  It is a strange way to respond to rising gas prices. But it is 
perfectly consistent with the current Energy Secretary's previously 
stated desire to get gas prices in the United States up to where they 
are in Europe.
  These new regulations would destroy jobs at a time when Americans 
need them the most, and they would be especially devastating for States 
such as Kentucky and other coal States. EPA regulations resulting in 
dramatic energy price increases would jeopardize the livelihoods of the 
18,000 miners in Kentucky and the additional 200,000 jobs that depend 
on coal production and the low cost of electricity that Kentuckians 
enjoy.
  They would raise the price of everything from electricity, gasoline, 
fertilizer, to the food we eat, and that is why farmers, builders, 
manufacturers, small businesses, and the U.S. Chamber of Commerce 
oppose them and support an effort to stop them.
  But the White House is determined to get its way, and that is why 
they are attempting to do through regulation what they couldn't do 
through legislation regardless of whether the American people want it. 
In my view, it is an insult to the millions of Americans who are 
already struggling to make ends meet and to find a job.
  Fourteen million Americans are looking for work, gas prices are 
approaching $4 a gallon, and the Obama administration wants unelected 
and unaccountable bureaucrats to impose new regulations that will 
destroy even more jobs and drive gas prices even higher.
  If you want proof that common sense is taking a backseat to ideology 
in the White House, look no further: This plan is bad for jobs and bad 
for the economy and it must be stopped. That is why, at the end of my 
remarks, I will be introducing an amendment to block it.
  In an effort to prevent the administration from adding yet another 
burdensome, job-destroying regulation through the backdoor, we will 
have a vote on whether, at a time of rising gas prices and growing 
concern about the scope of government, we should allow the White House 
to impose new energy regulations through the EPA.
  This vote is needed because the White House appears ready to advance 
its goal by any means possible, regardless of our economy or the will 
of the people. That is why it is my hope we will vote to stop this 
power grab in its tracks.
  I wish to, in particular, give credit to Senator Inhofe. This is 
legislation he has introduced and has been promoting. It is exactly the 
same legislation that is moving over in the House of Representatives, 
and it is time the Senate took a stand on this measure as well.
  Mr. President, I believe there is an amendment pending.
  The PRESIDING OFFICER. There is.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
pending amendment be temporarily set aside, and I send an amendment to 
the desk.
  The PRESIDING OFFICER. The clerk will report.

[[Page 4023]]

  The bill clerk read as follows:

       The Senator from Kentucky [Mr. McConnell] proposes an 
     amendment No. 183.

  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To prohibit the Administrator of the Environmental Protection 
   Agency from promulgating any regulation concerning, taking action 
relating to, or taking into consideration the emission of a greenhouse 
                     gas to address climate change)

       At the end, add the following:

                    TITLE VI--ENERGY TAX PREVENTION

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Energy Tax Prevention Act 
     of 2011''.

     SEC. 602. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

       (a) In General.--Title III of the Clean Air Act (42 U.S.C. 
     7601 et seq.) is amended by adding at the end the following:

     ``SEC. 330. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

       ``(a) Definition.--In this section, the term `greenhouse 
     gas' means any of the following:
       ``(1) Water vapor.
       ``(2) Carbon dioxide.
       ``(3) Methane.
       ``(4) Nitrous oxide.
       ``(5) Sulfur hexafluoride.
       ``(6) Hydrofluorocarbons.
       ``(7) Perfluorocarbons.
       ``(8) Any other substance subject to, or proposed to be 
     subject to, regulation, action, or consideration under this 
     Act to address climate change.
       ``(b) Limitation on Agency Action.--
       ``(1) Limitation.--
       ``(A) In general.--The Administrator may not, under this 
     Act, promulgate any regulation concerning, take action 
     relating to, or take into consideration the emission of a 
     greenhouse gas to address climate change.
       ``(B) Air pollutant definition.--The definition of the term 
     `air pollutant' in section 302(g) does not include a 
     greenhouse gas. Nothwithstanding the previous sentence, such 
     definition may include a greenhouse gas for purposes of 
     addressing concerns other than climate change.
       ``(2) Exceptions.--Paragraph (1) does not prohibit the 
     following:
       ``(A) Notwithstanding paragraph (4)(B), implementation and 
     enforcement of the rule entitled `Light-Duty Vehicle 
     Greenhouse Gas Emission Standards and Corporate Average Fuel 
     Economy Standards' (75 Fed. Reg. 25324 (May 7, 2010) and 
     without further revision) and finalization, implementation, 
     enforcement, and revision of the proposed rule entitled 
     `Greenhouse Gas Emissions Standards and Fuel Efficiency 
     Standards for Medium- and Heavy-Duty Engines and Vehicles' 
     published at 75 Fed. Reg. 74152 (November 30, 2010).
       ``(B) Implementation and enforcement of section 211(o).
       ``(C) Statutorily authorized Federal research, development, 
     and demonstration programs addressing climate change.
       ``(D) Implementation and enforcement of title VI to the 
     extent such implementation or enforcement only involves one 
     or more class I or class II substances (as such terms are 
     defined in section 601).
       ``(E) Implementation and enforcement of section 821 (42 
     U.S.C. 7651k note) of Public Law 101-549 (commonly referred 
     to as the `Clean Air Act Amendments of 1990').
       ``(3) Inapplicability of provisions.--Nothing listed in 
     paragraph (2) shall cause a greenhouse gas to be subject to 
     part C of title I (relating to prevention of significant 
     deterioration of air quality) or considered an air pollutant 
     for purposes of title V (relating to air permits).
       ``(4) Certain prior agency actions.--The following rules, 
     and actions (including any supplement or revision to such 
     rules and actions) are repealed and shall have no legal 
     effect:
       ``(A) `Mandatory Reporting of Greenhouse Gases', published 
     at 74 Fed. Reg. 56260 (October 30, 2009).
       ``(B) `Endangerment and Cause or Contribute Findings for 
     Greenhouse Gases under section 202(a) of the Clean Air Act' 
     published at 74 Fed. Reg. 66496 (Dec. 15, 2009).
       ``(C) `Reconsideration of the Interpretation of Regulations 
     That Determine Pollutants Covered by Clean Air Act Permitting 
     Programs' published at 75 Fed. Reg. 17004 (April 2, 2010) and 
     the memorandum from Stephen L. Johnson, Environmental 
     Protection Agency (EPA) Administrator, to EPA Regional 
     Administrators, concerning `EPA's Interpretation of 
     Regulations that Determine Pollutants Covered by Federal 
     Prevention of Significant Deterioration (PSD) Permit Program' 
     (Dec. 18, 2008).
       ``(D) `Prevention of Significant Deterioration and Title V 
     Greenhouse Gas Tailoring Rule', published at 75 Fed. Reg. 
     31514 (June 3, 2010).
       ``(E) `Action To Ensure Authority To Issue Permits Under 
     the Prevention of Significant Deterioration Program to 
     Sources of Greenhouse Gas Emissions: Finding of Substantial 
     Inadequacy and SIP Call', published at 75 Fed. Reg. 77698 
     (December 13, 2010).
       ``(F) `Action to Ensure Authority to Issue Permits Under 
     the Prevention of Significant Deterioration Program to 
     Sources of Greenhouse Gas Emissions: Finding of Failure to 
     Submit State Implementation Plan Revisions Required for 
     Greenhouse Gases', published at 75 Fed. Reg. 81874 (December 
     29, 2010).
       ``(G) `Action To Ensure Authority To Issue Permits Under 
     the Prevention of Significant Deterioration Program to 
     Sources of Greenhouse Gas Emissions: Federal Implementation 
     Plan', published at 75 Fed. Reg. 82246 (December 30, 2010).
       ``(H) `Action To Ensure Authority To Implement Title V 
     Permitting Programs Under the Greenhouse Gas Tailoring Rule', 
     published at 75 Fed. Reg. 82254 (December 30, 2010).
       ``(I) `Determinations Concerning Need for Error Correction, 
     Partial Approval and Partial Disapproval, and Federal 
     Implementation Plan Regarding Texas Prevention of Significant 
     Deterioration Program', published at 75 Fed. Reg. 82430 
     (December 30, 2010).
       ``(J) `Limitation of Approval of Prevention of Significant 
     Deterioration Provisions Concerning Greenhouse Gas Emitting-
     Sources in State Implementation Plans; Final Rule', published 
     at 75 Fed. Reg. 82536 (December 30, 2010).
       ``(K) `Determinations Concerning Need for Error Correction, 
     Partial Approval and Partial Disapproval, and Federal 
     Implementation Plan Regarding Texas Prevention of Significant 
     Deterioration Program; Proposed Rule', published at 75 Fed. 
     Reg. 82365 (December 30, 2010).
       ``(L) Except for action listed in paragraph (2), any other 
     Federal action under this Act occurring before the date of 
     enactment of this section that applies a stationary source 
     permitting requirement or an emissions standard for a 
     greenhouse gas to address climate change.
       ``(5) State action.--
       ``(A) No limitation.--This section does not limit or 
     otherwise affect the authority of a State to adopt, amend, 
     enforce, or repeal State laws and regulations pertaining to 
     the emission of a greenhouse gas.
       ``(B) Exception.--
       ``(i) Rule.--Notwithstanding subparagraph (A), any 
     provision described in clause (ii)--

       ``(I) is not federally enforceable;
       ``(II) is not deemed to be a part of Federal law; and
       ``(III) is deemed to be stricken from the plan described in 
     clause (ii)(I) or the program or permit described in clause 
     (ii)(II), as applicable.

       ``(ii) Provisions defined.--For purposes of clause (i), the 
     term `provision' means any provision that--

       ``(I) is contained in a State implementation plan under 
     section 110 and authorizes or requires a limitation on, or 
     imposes a permit requirement for, the emission of a 
     greenhouse gas to address climate change; or
       ``(II) is part of an operating permit program under title 
     V, or a permit issued pursuant to title V, and authorizes or 
     requires a limitation on the emission of a greenhouse gas to 
     address climate change.

       ``(C) Action by administrator.--The Administrator may not 
     approve or make federally enforceable any provision described 
     in subparagraph (B)(ii).''.

     SEC. 603. PRESERVING ONE NATIONAL STANDARD FOR AUTOMOBILES.

       Section 209(b) of the Clean Air Act (42 U.S.C. 7543) is 
     amended by adding at the end the following:
       ``(4) With respect to standards for emissions of greenhouse 
     gases (as defined in section 330) for model year 2017 or any 
     subsequent model year for new motor vehicles and new motor 
     vehicle engines--
       ``(A) the Administrator may not waive application of 
     subsection (a); and
       ``(B) no waiver granted prior to the date of enactment of 
     this paragraph may be considered to waive the application of 
     subsection (a).''.

  The PRESIDING OFFICER. The Senator from Nebraska.


                           Amendment No. 182

  Mr. NELSON of Nebraska. Mr. President, I rise to speak on the 
amendment I have just offered dealing with cutting the Senate budget by 
at least 5 percent.
  When I go home every weekend and I am at the grocery store or I am at 
a hardware store, I have people coming to me saying they are concerned 
about the growing deficit, they are concerned about the increasing 
debt, and they are asking what Congress can do, what can the Senate do, 
specifically, to avoid having this unsustainable growth and debt and 
deficit. They are concerned.
  In many respects, the growth of that debt is most threatening to the 
national security of this country.
  Mr. INHOFE. Would the Senator from Nebraska yield for a question?
  Mr. NELSON of Nebraska. Sure.
  Mr. INHOFE. I ask the Senator from Nebraska--the minority leader has 
just introduced an amendment that is pending right now, and I was going 
to speak

[[Page 4024]]

on that amendment. Rather than going to another one, would the Senator 
yield for 3 or 4 minutes so I can at least weigh in on this amendment?
  Mr. NELSON of Nebraska. Ordinarily, I would grant that request, but I 
have a speech at another location that should be starting about right 
now. So I will be brief.
  Mr. INHOFE. Mr. President, I ask unanimous consent that at the 
conclusion of the Senator's remarks I be recognized next.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. NELSON of Nebraska. The Chairman of the Joint Chiefs of Staff, 
Admiral Mullen, noted that the most significant threat to our national 
security is in fact the national debt.
  The Nation is in a fragile state of recovery, one that we hope will 
improve the unemployment situation in our country and will improve the 
overall economy. But as we look at dealing with the deficit and deficit 
reduction, we must in fact pursue a very important part of that 
reduction ourselves here within the confines of the Senate. The offices 
and agencies that serve the Members of Congress have to be reduced 
along with the rest of the budget.
  In order to address the Nation's fiscal crisis I think the Senate 
must lead by example and reduce our own legislative budget. It is in 
that context I have introduced this resolution of the Senate today, a 
sense of the Senate that it should lead by example and reduce the 
budget of the Senate by at least 5 percent.
  This is not something new to me. Two years ago, we held the line in 
the growth of the Senate budget. A year ago we cut the legislative 
branch budget. We are looking forward, beyond this current budget, this 
continuing resolution, and looking at 2012. I hope the legislative 
branch on a bipartisan basis--as in the past, with Senator Murkowski, 
now with Senator Hoeven--will be able to further reduce the legislative 
branch budget as we go forward on the 2012 budget that will take effect 
on October 1 of this year.
  This is designed for us to set an example by cutting our own budgets, 
not just asking other people to tighten their belts and go through the 
process of deficit reduction through cuts, but to lead by example and 
do it ourselves. Obviously there will be an opportunity to speak more 
at a later time. I hope that will generate some more discussion on the 
floor of the Senate.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, first I thank the Senator from Nebraska 
for allowing me to come in immediately following his remarks.


                           Amendment No. 183

  An amendment was just offered by the minority leader. Let me explain 
what this is. As the former chairman of the Environment and Public 
Works Committee, and now the ranking member, we have been very much 
concerned for a long period of time over what they are trying to do 
with cap-and-trade. All the way back to the Kyoto treaty and then 
through the five different bills that were debated on the Senate floor, 
we recognized the incredible cost to the American people if we were to 
pass cap-and-trade legislation.
  The interesting thing about this is the most votes that were in the 
Senate at any one time in order to pass cap-and-trade were about 30. 
Obviously it takes a lot more than that. So what this administration 
did was say: All right, if you are not going to pass cap-and-trade 
regulation--keep in mind what that is; that would end up being the 
largest tax increase in the history of America on the American people--
if you are not going to do it through legislation, we will do it 
through our regulations, through the Environmental Protection Agency.
  There was an endangerment finding. The Administrator of the EPA had 
the endangerment finding and it was based on the IPCC flawed science, 
but nonetheless it was there. So they started on a route to regulate 
CO2 through regulations. Let's stop and think about what 
that would be. The costs we have determined, over a period of 10-years, 
to take over the regulation and have in fact a type of cap-and-trade 
through regulation--or by regulation--would be about $300 billion to 
$400 billion a year. I did a calculation as to what that would cost the 
average family in the State of Oklahoma and it was about $3,000 for 
each family who actually files a tax return.
  You have to ask the question, what do you get if you pass this. First 
of all, I think most people right now are concerned with the price of 
gasoline at the pump. It is going up again. I suggest it is not market 
forces that are forcing the price up. It is nothing less than 
regulation. We have an administration that is doing all it can to kill 
fossil fuels in America. This is a chart showing--and this all happened 
in the last year--in the United States we have the largest recovery 
reserves in oil, coal, and gas of any other country. In fact, our 
research is right there. You can see recovery reserves are astronomical 
compared to China, Iran, Canada, and some of the other countries.
  The problem we have is a political problem. We are not allowed to go 
ahead and exploit our own reserves. It is simple supply and demand. I 
think there is not a person listening to us now who has not studied 
supply-and-demand basics back in school. If we have all this supply 
here, why can't we exploit the supply?
  To give another illustration of what we have--this is coal reserves. 
We have 28 percent of all the world's coal reserves. We are exploiting 
right now clean coal technology, being very successful. We have, in 
addition to this, oil and gas reserves. But the problem we have is a 
political problem.
  It was the Secretary of Energy, Steven Chu, who made the statement in 
the Wall Street Journal:

       [S]omehow we have to figure out how to boost the price of 
     gasoline in Europe.

  ``To boost the price of gasoline to the levels in Europe.'' Right now 
the levels in Europe are around $8 a gallon. That is what the 
administration wants us to pay. Why do they want that? They want that 
so we will be priced out of using fossil fuels. We are talking about 
oil, gas, and coal.
  Right now we are faced with this. Frankly, as we speak, in this very 
moment over in the House of Representatives they are taking up what 
they call the Upton-Inhofe bill. That is the same amendment the 
minority leader just filed. What that does is propose the content of 
the Inhofe-Upton bill, which says the EPA does not have jurisdiction 
over controlling CO2. That should be a legislative matter. 
You say, Who would agree with that?
  Max Baucus, Democrat from Montana, said:

       I do not want the EPA writing those regulations. I think 
     it's too much power in the hands of one single agency, but 
     rather climate change should be a matter that's essentially 
     left to the Congress.

  The Senator from Nebraska who just walked off the floor:

       Controlling the levels of carbon emissions is the job of 
     Congress. We don't need the EPA looking over Congress' 
     shoulder telling us we're not moving fast enough.

  He went on further to say:

       Because the EPA regulations would be a government-directed 
     command-and-control regime, they would raise the price of 
     energy--

  . . . in his State and for all the other States.
  This is something I think we have talked about but there is one thing 
that seems to keep getting overlooked. Somebody asked me the other day, 
they said: Inhofe, what if you are wrong, in terms of how 
CO2--they are talking about catastrophic global warming. I 
said: It is very simple. I have a great deal of respect for the 
Director of the Environmental Protection Agency. She actually said--
Lisa Jackson--in response to my question, live on TV, in our committee. 
I said:

       Let's say we pass a cap-and-trade either by regulation or 
     legislation. What do you think that is going to do in terms 
     of the overall emissions of CO2?

  Her response was, well, it wouldn't really affect them because that 
would only affect the United States.
  I go on further and say: If we were to restrict these, and stop us 
from producing oil, gas, and coal in the United States, necessarily our 
power would be reduced. That would move it to China,

[[Page 4025]]

to India, to Mexico, to places where they do not have these regulations 
and do not have restrictions on emissions. It would have the effect of 
actually increasing, not decreasing, CO2. Even if we are 
wrong on that we have to keep in mind it would not make any difference.
  I know there are several others who want to talk about this. I am 
very excited we now have this as a pending amendment, to adopt what I 
refer to as the Inhofe-Upton bill. He referred to it as the Upton-
Inhofe bill. It would merely take out the jurisdiction of the EPA to 
regulate CO2.
  I would say also in the case of the Director, Lisa Jackson, when I 
asked the question--and this was a year ago in October, I say to my 
good friend from Louisiana--I said: If you are going to try to have an 
endangerment finding so that would allow the EPA to regulate the same 
as the cap-and-trade would, it has to be based on science. What science 
would you base it on? Her response was the United Nations IPCC. What is 
that? It was Climategate IPC. It happened about a year ago. It was 
cooked science. I remember standing at this podium in this Senate many 
times, talking about how they have tried to falsify the science to make 
people believe catastrophic global warming is going to come in as a 
result of CO2 emissions.
  I am glad this has come up. Right now we are looking at gasoline 
approaching $4 a gallon. It is a supply-and-demand situation. My friend 
from Louisiana has a lot of gas and oil in her State. We do in my State 
of Oklahoma. We need to get the regulators, who are the politicians, to 
allow us to go ahead and exploit our own resources. Eighty-three 
percent right now of the Federal lands where we could be producing oil 
and gas is off limits.
  The last thing I will say before yielding the floor is that if we 
were to take the recoverable oil and the recoverable gas and take away 
the political obstacles that are in the way, we would have enough to 
run this country for 90 years, in terms of the supply of oil, and for 
90 years in the supply of gas, all produced here in the United States. 
That would mean we would not have to be reliant upon the Middle East to 
run this machine called America.
  Let's pull away those. The way to do that is to vote in favor of this 
amendment and I am very excited we will have the opportunity to do that 
shortly.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. The Senator and Senator McConnell have an amendment. 
There is an amendment pending. We only have a minute and a half. I wish 
to call to the attention of the Chair, Senator Vitter has an amendment 
which we will take up to discuss later this afternoon.
  The PRESIDING OFFICER. The Senator from Louisiana.


                           Amendment No. 178

  Mr. VITTER. Mr. President, I want to briefly preview an amendment, 
Vitter amendment No. 178, which I will formally call up this afternoon 
about 2:45. This is a spending amendment to get back to what I believe 
is the central challenge we face as a country right now, this 
unsustainable path we are on with regard to Federal spending and debt. 
This is a very simple, straightforward amendment which I think deserves 
and will hopefully get strong bipartisan support. It requires the 
Federal Government to get rid of its billions of dollars of inventory--
literally billions and billions of dollars of unutilized or 
underutilized real property.
  The Federal Real Property Council reports that the Federal Government 
owned or operated more than 1.1 million assets worldwide in 2007. It 
was worth an estimated $1.5 trillion. But a lot of those assets, real 
property buildings, land, are unused or underused. According to OMB, 
there are about 47,000 underutilized properties, almost 19,000 
completely unutilized properties. That is over 65,000 properties with 
an estimated value of $83 billion that would better be diminished, 
sold, or demolished.
  This is a commonsense way to save money in the Federal budget, to 
move us forward in terms of a more sustainable path on spending and 
debt. Obviously we need many more larger steps, but this is brought in 
that spirit.
  I look forward to returning to the floor around 2:45 to make it 
formally pending and to offer some brief additional comments.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. Mr. President, according to the agreement, we are going 
to break now at 12:30 and take up this debate this afternoon and stay 
on this bill with open debate. Hopefully, it can be productive and 
cordial and then, hopefully, we can move to pass this important bill, 
the reauthorization of SBIR.
  Mr. President, I ask unanimous consent that the order with respect to 
Senator Portman be vitiated.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. LANDRIEU. Mr. President, we will break now and come back and 
resume our debate at 2:15.

                          ____________________