[House Report 112-90]
[From the U.S. Government Publishing Office]


112th Congress                                             Rept. 112-90
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     Part 1

======================================================================



 
      CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011

                                _______
                                

                  May 26, 2011.--Ordered to be printed

                                _______
                                

    Mr. Hall, from the Committee on Science, Space, and Technology, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1425]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Science, Space, and Technology, to whom 
was referred the bill (H.R. 1425) to reauthorize and improve 
the SBIR and STTR programs, and for other purposes, having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
   I. Amendment.......................................................2
  II. Purpose and Summary............................................23
 III. Background and Need for the Legislation........................23
  IV. Hearing Summary................................................24
   V. Committee Consideration........................................24
  VI. Committee Votes................................................25
 VII. Summary of Major Provisions of the Bill........................38
VIII. Committee Views................................................41
  IX. Committee Oversight Findings...................................44
   X. Statement on General Performance Goals and Objectives..........44
  XI. New Budget Authority, Entitlement Authority, and Tax Expenditur44
 XII. Advisory on Earmarks...........................................44
XIII. Committee Cost Estimate........................................44
 XIV. Congressional Budget Office Cost Estimate......................44
  XV. Federal Mandates Statement.....................................47
 XVI. Federal Advisory Committee Statement...........................47
XVII. Applicability to Legislative Branch............................47
XVIII.Section-by-Section Analysis of the Legislation.................48

 XIX. Changes in Existing Law Made by the Bill, As Reported..........55
  XX. Additional Views...............................................85
 XXI. Proceedings of the Subcommittee Markup.........................87
XXII. Proceedings of the Full Committee Markup......................209

                              I. Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Creating Jobs Through Small Business 
Innovation 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. SBIR and STTR award levels.
Sec. 103. Agency and program flexibility.
Sec. 104. Elimination of Phase II invitations.
Sec. 105. Phase flexibility.
Sec. 106. Participation by firms with substantial investment from 
multiple venture capital operating companies, hedge funds, or private 
equity firms in a portion of the SBIR program.
Sec. 107. Ensuring that innovative small businesses with substantial 
investment from venture capital operating companies, hedge funds, or 
private equity firms are able to participate in the SBIR and STTR 
programs.
Sec. 108. SBIR and STTR special acquisition preference.
Sec. 109. Collaborating with Federal laboratories and research and 
development centers.
Sec. 110. Notice requirement.
Sec. 111. Additional SBIR and STTR Awards.

          TITLE II--OUTREACH AND COMMERCIALIZATION INITIATIVES

Sec. 201. Technical assistance for awardees.
Sec. 202. Commercialization Readiness Program at Department of Defense.
Sec. 203. Commercialization Readiness Pilot Program for civilian 
agencies.
Sec. 204. Interagency Policy Committee.
Sec. 205. Clarifying the definition of ``Phase III''.
Sec. 206. Shortened period for final decisions on proposals and 
applications.
Sec. 207. Phase 0 Proof of Concept Partnership pilot program.

                  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. Obtaining consent from SBIR and STTR applicants to release 
contact information to economic development organizations.
Sec. 310. Pilot to allow funding for administrative, oversight, and 
contract processing costs.
Sec. 311. GAO study with respect to venture capital operating company, 
hedge fund, and private equity firm involvement.
Sec. 312. Reducing vulnerability of SBIR and STTR programs to fraud, 
waste, and abuse.
Sec. 313. Simplified paperwork requirements.
Sec. 314. Reducing fraud, waste, and abuse.

                      TITLE IV--POLICY DIRECTIVES

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

                       TITLE V--OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR program goals.
Sec. 502. Competitive selection procedures for SBIR and STTR programs.
Sec. 503. Loan restrictions.
Sec. 504. Program diversification.

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--
          (1) by striking ``Termination.--'' and all that follows 
        through ``the authorization'' and inserting ``Termination.--The 
        authorization'';
          (2) by striking ``2008'' and inserting ``2014''; 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 ``2014''; and
          (3) by striking clause (ii).

SEC. 102. 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), as amended by this Act, is further 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, hedge fund, or private equity firm 
                investment and, if so, whether the recipient is 
                majority-owned by multiple venture capital operating 
                companies, hedge funds, or private equity firms.
          ``(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. 103. AGENCY AND PROGRAM FLEXIBILITY.

  Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is further amended by adding at the end the following:
  ``(bb) Subsequent Phase II Awards.--
          ``(1) Agency flexibility.--A small business concern that 
        received a Phase I 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 a Phase I 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).''.

SEC. 104. ELIMINATION OF PHASE II INVITATIONS.

  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 Phase II, 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 Phase II, that will further develop 
        proposals that''.

SEC. 105. PHASE FLEXIBILITY.

  Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is further amended by adding at the end the following:
  ``(cc) Phase I Required.--Under this section, a Federal agency shall 
provide to a small business concern an award under Phase II of an SBIR 
program with respect to a project only if such agency finds that the 
small business concern has been provided an award under Phase I of an 
SBIR program with respect to such project or has completed the 
determinations described in subsection (e)(4)(A) with respect to such 
project despite not having been provided a Phase I award.''.

SEC. 106. PARTICIPATION BY FIRMS WITH SUBSTANTIAL INVESTMENT FROM 
                    MULTIPLE VENTURE CAPITAL OPERATING COMPANIES, HEDGE 
                    FUNDS, OR PRIVATE EQUITY FIRMS 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 further amended by adding at the end the 
following:
  ``(dd) Participation of Small Business Concerns Majority-Owned by 
Venture Capital Operating Companies, Hedge Funds, or Private Equity 
Firms in the SBIR Program.--
          ``(1) Authority.--Upon a written determination described in 
        paragraph (2) provided to the Administrator, the Committee on 
        Small Business and Entrepreneurship of the Senate, and the 
        Committee on Small Business and the Committee on Science, 
        Space, and Technology 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, the Administrator of 
                the National Aeronautics and Space Administration, and 
                the Director of the National Science Foundation may 
                award not more than 45 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, hedge 
                funds, or private equity firms 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 35 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, hedge funds, or 
                private equity firms 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, hedge fund, 
                or private equity firm 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, 
        hedge funds, or private equity firms 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, hedge funds, or private equity firms.
          ``(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, hedge 
                        funds, or private equity firms 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, hedge 
                        funds, or private equity firms.
                  ``(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, hedge 
                        funds, or private equity firms, 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.
          ``(7) Evaluation criteria.--A Federal agency may not use 
        investment of venture capital or investment from hedge funds or 
        private equity firms 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).
  ``(bb) Hedge Fund.--In this Act, the term `hedge fund' has the 
meaning given that term in section 13(h)(2) of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1851(h)(2)).
  ``(cc) Private Equity Firm.--In this Act, the term `private equity 
firm' has the meaning given the term `private equity fund' in section 
13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 
1851(h)(2)).''.

SEC. 107. ENSURING THAT INNOVATIVE SMALL BUSINESSES WITH SUBSTANTIAL 
                    INVESTMENT FROM VENTURE CAPITAL OPERATING 
                    COMPANIES, HEDGE FUNDS, OR PRIVATE EQUITY FIRMS ARE 
                    ABLE TO PARTICIPATE IN THE SBIR AND STTR PROGRAMS.

  Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is further amended by adding at the end the following:
  ``(ee) Venture Capital Operating Companies, Hedge Funds, and Private 
Equity Firms.--Effective only for the SBIR and STTR programs the 
following shall apply:
          ``(1) A business concern that has more than 500 employees 
        shall not qualify as a small business concern.
          ``(2) In determining whether a small business concern is 
        independently owned and operated under section 3(a)(1) or meets 
        the small business size standards instituted under section 
        3(a)(2), the Administrator shall not consider a business 
        concern to be affiliated with a venture capital operating 
        company, hedge fund, or private equity firm (or with any other 
        business that the venture capital operating company, hedge 
        fund, or private equity firm has financed) if--
                  ``(A) the venture capital operating company, hedge 
                fund, or private equity firm does not own 50 percent or 
                more of the business concern; and
                  ``(B) employees of the venture capital operating 
                company, hedge fund, or private equity firm do not 
                constitute a majority of the board of directors of the 
                business concern.
          ``(3) A business concern shall be deemed to be `independently 
        owned and operated' if--
                  ``(A) it is owned in majority part by one or more 
                natural persons or venture capital operating companies, 
                hedge funds, or private equity firms;
                  ``(B) there is no single venture capital operating 
                company, hedge fund, or private equity firm that owns 
                50 percent or more of the business concern; and
                  ``(C) there is no single venture capital operating 
                company, hedge fund, or private equity firm the 
                employees of which constitute a majority of the board 
                of directors of the business concern.
          ``(4) If a venture capital operating company, hedge fund, or 
        private equity firm controlled by a business with more than 500 
        employees (in this paragraph referred to as a `VCOC, hedge 
        fund, or private equity firm under large business control') has 
        an ownership interest in a small business concern that is owned 
        in majority part by venture capital operating companies, hedge 
        funds, or private equity firms, the small business concern is 
        eligible to receive an award under the SBIR or STTR program 
        only if--
                  ``(A) not more than two VCOCs, hedge funds, or 
                private equity firms under large business control have 
                an ownership interest in the small business concern; 
                and
                  ``(B) the VCOCs, hedge funds, or private equity firms 
                under large business control do not collectively own 
                more than 20 percent of the small business concern.''.

SEC. 108. 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. 109. 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 further amended by adding at the end the following:
  ``(ff) 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.
          ``(4) Advance payment.--If a small business concern receiving 
        an award under this section enters 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, the Federal laboratory or federally funded research 
        and development center may not require advance payment from the 
        small business concern in an amount greater than the amount 
        necessary to pay for 30 days of such activities.''.

SEC. 110. 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 ``; and''; 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.''.
  (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. 111. ADDITIONAL SBIR AND STTR AWARDS.

  Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is further amended by adding at the end the following:
  ``(gg) Additional SBIR and STTR Awards.--
          ``(1) Express authority for awarding a sequential phase ii 
        award.--A small business concern that receives a Phase II SBIR 
        award or a Phase II STTR award for a project remains eligible 
        to receive one additional Phase II SBIR award or Phase II STTR 
        award for continued work on that project.
          ``(2) Preventing duplicative awards.--The head of a Federal 
        agency shall verify that any activity to be performed with 
        respect to a project with a Phase I or Phase II SBIR or STTR 
        award has not been funded under the SBIR program or STTR 
        program of another Federal agency.''.

          TITLE II--OUTREACH AND COMMERCIALIZATION INITIATIVES

SEC. 201. 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. 202. 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 Creating Jobs Through Small Business 
                Innovation 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 Act (15 U.S.C. 638(i)(1)) is amended by inserting ``(including 
awards under subsection (y))'' after ``the number of awards''.

SEC. 203. 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 further amended by adding at the end the following:
  ``(hh) 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, 
                evaluation, and commercialization assistance for SBIR 
                and STTR Phase II technologies; or
                  ``(B) to support the progress of research, research 
                and development, and commercialization 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 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 and the Committee 
                        on Science, Space, and Technology 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) Award criteria or consideration.--When making an award 
        under this section, the head of a covered Federal agency shall 
        give consideration to whether the technology to be supported by 
        the award is likely to be manufactured in the United States.
          ``(6) 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.
          ``(7) Termination.--The authority to establish a pilot 
        program under this section expires at the end of fiscal year 
        2014.
          ``(8) 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. 204. INTERAGENCY POLICY COMMITTEE.

  (a) Establishment.--The Director of the Office of Science and 
Technology Policy shall establish an Interagency SBIR/STTR Policy 
Committee.
  (b) Duties.--The Interagency SBIR/STTR Policy Committee shall review 
the following issues and make policy recommendations on ways to improve 
program effectiveness and efficiency:
          (1) The public and government databases described in section 
        9(k) of the Small Business Act (15 U.S.C. 638(k)).
          (2) Federal agency flexibility in establishing Phase I and II 
        award sizes, including appropriate criteria for exercising such 
        flexibility.
          (3) Commercialization assistance best practices of Federal 
        agencies with significant potential to be employed by other 
        agencies, and the appropriate steps to achieve that leverage, 
        as well as proposals for new initiatives to address funding 
        gaps that business concerns face after Phase II but before 
        commercialization.
          (4) Developing and incorporating a standard evaluation 
        framework to enable systematic assessment of SBIR and STTR, 
        including through improved tracking of awards and outcomes and 
        development of performance measures for the SBIR program and 
        STTR program of each Federal agency.
  (c) Reports.--The Interagency SBIR/STTR Policy Committee shall 
transmit to the Committee on Science, Space, and Technology and the 
Committee on Small Business of the House of Representatives and to the 
Committee on Small Business and Entrepreneurship of the Senate--
          (1) a report on its review and recommendations under 
        subsection (b)(1) not later than 1 year after the date of 
        enactment of this Act;
          (2) a report on its review and recommendations under 
        subsection (b)(2) not later than 18 months after the date of 
        enactment of this Act;
          (3) a report on its review and recommendations under 
        subsection (b)(3) not later than 2 years after the date of 
        enactment of this Act; and
          (4) a report on its review and recommendations under 
        subsection (b)(4) not later than 2 years after the date of 
        enactment of this Act.

SEC. 205. CLARIFYING THE DEFINITION OF ``PHASE III''.

  (a) Phase III Awards.--Section 9(e) of the Small Business Act (15 
U.S.C. 638(e)), as amended by this Act, is further 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;
          (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.--Section 9 of the Small 
Business Act (15 U.S.C. 638), as amended by this Act, is further 
amended--
          (1) in subsection (e)--
                  (A) in paragraph (4)(C)(ii), by striking ``scientific 
                review criteria'' and inserting ``merit-based selection 
                procedures'';
                  (B) in paragraph (9), by striking ``the second or the 
                third phase'' and inserting ``Phase II or Phase III''; 
                and
                  (C) 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).'';
          (2) in subsection (j)--
                  (A) in paragraph (1)(B), by striking ``phase two'' 
                and inserting ``Phase II'';
                  (B) in paragraph (2)--
                          (i) in subparagraph (B)--
                                  (I) by striking ``the third phase'' 
                                each place it appears and inserting 
                                ``Phase III''; and
                                  (II) by striking ``the second phase'' 
                                and inserting ``Phase II'';
                          (ii) in subparagraph (D)--
                                  (I) by striking ``the first phase'' 
                                and inserting ``Phase I''; and
                                  (II) 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)--
                                  (I) by striking ``the first phase'' 
                                and inserting ``Phase I''; and
                                  (II) by striking ``the second phase'' 
                                and inserting ``Phase II''; and
                          (v) in subparagraph (H)--
                                  (I) by striking ``the first phase'' 
                                and inserting ``Phase I'';
                                  (II) by striking ``second phase'' 
                                each place it appears and inserting 
                                ``Phase II''; and
                                  (III) by striking ``third phase'' and 
                                inserting ``Phase III''; and
                  (C) in paragraph (3)--
                          (i) in subparagraph (A)--
                                  (I) by striking ``the first phase (as 
                                described in subsection (e)(4)(A))'' 
                                and inserting ``Phase I'';
                                  (II) by striking ``the second phase 
                                (as described in subsection 
                                (e)(4)(B))'' and inserting ``Phase 
                                II''; and
                                  (III) 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'';
          (3) in subsection (k)--
                  (A) by striking ``first phase'' each place it appears 
                and inserting ``Phase I''; and
                  (B) by striking ``second phase'' each place it 
                appears and inserting ``Phase II'';
          (4) in subsection (l)(2)--
                  (A) by striking ``the first phase'' and inserting 
                ``Phase I''; and
                  (B) by striking ``the second phase'' and inserting 
                ``Phase II'';
          (5) in subsection (o)(13)--
                  (A) in subparagraph (B), by striking ``second phase'' 
                and inserting ``Phase II''; and
                  (B) in subparagraph (C), by striking ``third phase'' 
                and inserting ``Phase III'';
          (6) in subsection (p)--
                  (A) in paragraph (2)(B)--
                          (i) in clause (vi)--
                                  (I) by striking ``the second phase'' 
                                and inserting ``Phase II''; and
                                  (II) by striking ``the third phase'' 
                                and inserting ``Phase III''; and
                          (ii) in clause (ix)--
                                  (I) by striking ``the first phase'' 
                                and inserting ``Phase I''; and
                                  (II) by striking ``the second phase'' 
                                and inserting ``Phase II''; and
                  (B) 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)(C))'' and 
                        inserting ``Phase III'';
          (7) in subsection (q)(3)(A)--
                  (A) in the subparagraph heading, by striking ``First 
                phase'' and inserting ``Phase i''; and
                  (B) by striking ``first phase'' and inserting ``Phase 
                I'';
          (8) in subsection (r)--
                  (A) in the subsection heading, by striking ``Third 
                Phase'' and inserting ``Phase III'';
                  (B) in paragraph (1)--
                          (i) in the first sentence--
                                  (I) by striking ``for the second 
                                phase'' and inserting ``for Phase II'';
                                  (II) by striking ``third phase'' and 
                                inserting ``Phase III''; and
                                  (III) by striking ``second phase 
                                period'' and inserting ``Phase II 
                                period''; and
                          (ii) in the second sentence--
                                  (I) by striking ``second phase'' and 
                                inserting ``Phase II''; and
                                  (II) by striking ``third phase'' and 
                                inserting ``Phase III''; and
                  (C) in paragraph (2), by striking ``third phase'' and 
                inserting ``Phase III''; and
          (9) in subsection (u)(2)(B), by striking ``the first phase'' 
        and inserting ``Phase I''.

SEC. 206. SHORTENED PERIOD FOR FINAL DECISIONS ON PROPOSALS AND 
                    APPLICATIONS.

  (a) In General.--Section 9 of the Small Business Act (15 U.S.C. 638), 
as amended by this Act, is further 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.--Section 9 of the Small Business Act (15 
U.S.C. 638), as amended by this Act, is further amended by adding at 
the end the following:
  ``(ii) NIH Peer Review Process.--Notwithstanding subsections 
(g)(4)(B) and (o)(4)(B), 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 only 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).
  ``(jj) NSF Peer Review Process.--Notwithstanding subsections 
(g)(4)(B) and (o)(4)(B), the Director of the National Science 
Foundation may make an award under the SBIR program or the STTR program 
of the National Science Foundation only if the application for the 
award has undergone the National Science Foundation's technical and 
scientific peer review process and met all other applicable peer review 
procedures and guidelines pursuant to the National Science Foundation 
Act of 1950 (42 U.S.C. 1861, et seq.) and other applicable Federal 
law.''.

SEC. 207. PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PROGRAM.

  Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is further amended by adding at the end the following:
  ``(kk) Phase 0 Proof of Concept Partnership Pilot Program.--
          ``(1) In general.--The Director of the National Institutes of 
        Health shall use $10,000,000 of the funds allocated under 
        subsection (n)(1) for a Proof of Concept Partnership pilot 
        program to accelerate the creation of small businesses and the 
        commercialization of research innovations from qualifying 
        institutions. To implement this program, the Director shall 
        award, through a competitive, merit-based process, grants to 
        qualifying institutions. These grants shall only be used to 
        administer Proof of Concept Partnership awards in conformity 
        with this subsection.
          ``(2) Definitions.--In this subsection--
                  ``(A) the term `Director' means the Director of the 
                National Institutes of Health;
                  ``(B) the term `pilot program' refers to the Proof of 
                Concept Partnership pilot program; and
                  ``(C) the terms `qualifying institution' and 
                `institution' mean a university or other research 
                institution that participates in the National 
                Institutes of Health's STTR program.
          ``(3) Proof of concept partnerships.--
                  ``(A) In general.--A Proof of Concept Partnership 
                shall be set up by a qualifying institution to award 
                grants to individual researchers. These grants should 
                provide researchers with the initial investment and the 
                resources to support the proof of concept work and 
                commercialization mentoring needed to translate 
                promising research projects and technologies into a 
                viable company. This work may include technical 
                validations, market research, clarifying intellectual 
                property rights position and strategy and investigating 
                commercial or business opportunities.
                  ``(B) Award guidelines.--The administrator of a Proof 
                of Concept Partnership program shall award grants in 
                accordance with the following guidelines:
                          ``(i) The Proof of Concept Partnership shall 
                        use a market-focused project management 
                        oversight process, including--
                                  ``(I) a rigorous, diverse review 
                                board comprised of local experts in 
                                translational and proof of concept 
                                research, including industry, start-up, 
                                venture capital, technical, financial, 
                                and business experts and university 
                                technology transfer officials;
                                  ``(II) technology validation 
                                milestones focused on market 
                                feasibility;
                                  ``(III) simple reporting effective at 
                                redirecting projects; and
                                  ``(IV) the willingness to reallocate 
                                funding from failing projects to those 
                                with more potential.
                          ``(ii) Not more than $100,000 shall be 
                        awarded towards an individual proposal.
                  ``(C) Educational resources and guidance.--The 
                administrator of a Proof of Concept Partnership program 
                shall make educational resources and guidance available 
                to researchers attempting to commercialize their 
                innovations.
          ``(4) Awards.--
                  ``(A) Size of award.--The Director may make awards to 
                a qualifying institution for up to $1,000,000 per year 
                for up to 3 years.
                  ``(B) Award criteria.--In determining which 
                qualifying institutions receive pilot program grants, 
                the Director shall consider, in addition to any other 
                criteria the Director determines necessary, the extent 
                to which qualifying institutions--
                          ``(i) have an established and proven 
                        technology transfer or commercialization office 
                        and have a plan for engaging that office in the 
                        program implementation;
                          ``(ii) have demonstrated a commitment to 
                        local and regional economic development;
                          ``(iii) are located in diverse geographies 
                        and are of diverse sizes;
                          ``(iv) can assemble project management boards 
                        comprised of industry, start-up, venture 
                        capital, technical, financial, and business 
                        experts;
                          ``(v) have an intellectual property rights 
                        strategy or office; and
                          ``(vi) demonstrate a plan for sustainability 
                        beyond the duration of the funding award.
          ``(5) Limitations.--The funds for the pilot program shall not 
        be used--
                  ``(A) for basic research, but to evaluate the 
                commercial potential of existing discoveries, 
                including--
                          ``(i) proof of concept research or prototype 
                        development; and
                          ``(ii) activities that contribute to 
                        determining a project's commercialization path, 
                        to include technical validations, market 
                        research, clarifying intellectual property 
                        rights, and investigating commercial and 
                        business opportunities; or
                  ``(B) to fund the acquisition of research equipment 
                or supplies unrelated to commercialization activities.
          ``(6) Evaluative report.--The Director shall submit to the 
        Committee on Science, Space, and Technology and the Committee 
        on Small Business of the House of Representatives and the 
        Committee on Small Business and Entrepreneurship of the Senate 
        an evaluative report regarding the activities of the pilot 
        program. The report shall include--
                  ``(A) a detailed description of the institutional and 
                proposal selection process;
                  ``(B) an accounting of the funds used in the pilot 
                program;
                  ``(C) a detailed description of the pilot program, 
                including incentives and activities undertaken by 
                review board experts;
                  ``(D) a detailed compilation of results achieved by 
                the pilot program, including the number of small 
                business concerns included and the number of business 
                packages developed, and the number of projects that 
                progressed into subsequent STTR phases; and
                  ``(E) an analysis of the program's effectiveness with 
                supporting data.
          ``(7) Sunset.--The pilot program under this subsection shall 
        terminate at the end of fiscal year 2014.''.

                  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)) 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);
                  ``(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, hedge 
                fund, or private equity firm investment (including 
                those majority-owned by multiple venture capital 
                operating companies, hedge funds, or private equity 
                firms) 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;
                  ``(D) general information about the implementation 
                of, and compliance with the allocation of funds 
                required under, subsection (dd) for firms owned in 
                majority part by venture capital operating companies, 
                hedge funds, or private equity firms 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
                  (C) by striking ``and'' at the end;
          (2) in paragraph (8), by striking the period at the end and 
        inserting ``; and''; and
          (3) by inserting after paragraph (8) the following:
          ``(9) 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)), as amended 
by this Act, is further 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, hedge fund, or 
                        private equity firm investment or is majority-
                        owned by multiple venture capital operating 
                        companies, hedge funds, or private equity 
                        firms, and, if so--
                                  ``(I) the amount of venture capital, 
                                hedge fund, or private equity firm 
                                investment 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) 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
                          ``(vi) 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)), as amended 
by this Act, is further 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, hedge fund, or 
                        private equity firm investment or is majority-
                        owned by multiple venture capital operating 
                        companies, hedge funds, or private equity 
                        firms, and, if so--
                                  ``(I) the amount of venture capital, 
                                hedge fund, or private equity firm 
                                investment 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) 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
                          ``(vi) 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, hedge fund, or 
                        private equity firm investment and, if so, 
                        whether the small business concern is 
                        registered as majority-owned by multiple 
                        venture capital operating companies, hedge 
                        funds, or private equity firms as required 
                        under subsection (dd)(3);
                          ``(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; or
                          ``(iv) 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 Creating Jobs 
                Through Small Business Innovation 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 and titles of the key 
                        individuals that will carry out the project, 
                        the position each key individual holds in the 
                        small business concern, and contact information 
                        for each key individual;
                          ``(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, hedge funds, or private 
                        equity firms; 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, hedge fund, or private equity firm 
                        investment, and, if so--
                                  ``(I) the amount of venture capital, 
                                hedge fund, or private equity firm 
                                investment as of the date of the award;
                                  ``(II) the percentage of ownership of 
                                the awardee held by a venture capital 
                                operating company, hedge fund, or 
                                private equity firm, including whether 
                                the awardee is majority-owned by 
                                multiple venture capital operating 
                                companies, hedge funds, or private 
                                equity firms; 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;'';
                  (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 been--
                          ``(i) convicted of a fraud-related crime 
                        involving funding received under the SBIR 
                        program or STTR program; or
                          ``(ii) found civilly liable for a fraud-
                        related violation involving funding received 
                        under 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; and
                  (C) 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 and the Committee on Science, Space, and Technology of 
        the House of Representatives regarding the audit conducted 
        under paragraph (1), including the assessments required under 
        subparagraph (B), and the determination made under subparagraph 
        (C) 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 Creating Jobs Through Small Business 
        Innovation 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 Creating Jobs Through Small Business Innovation Act of 
        2011, and every 4 years thereafter--
                  ``(A) continue the most recent study under this 
                section relating to the issues described in 
                subparagraphs (A), (B), (C), and (E) of subsection 
                (a)(1);
                  ``(B) conduct a comprehensive study of how the STTR 
                program has stimulated technological innovation and 
                technology transfer, including--
                          ``(i) a review of the collaborations created 
                        between small businesses and research 
                        institutions, including an evaluation of the 
                        effectiveness of the program in stimulating new 
                        collaborations and any obstacles that may 
                        prevent or inhibit the creation of such 
                        collaborations;
                          ``(ii) an evaluation of the effectiveness of 
                        the program at transferring technology and 
                        capabilities developed through Federal funding;
                          ``(iii) an evaluation of the program's 
                        success at commercializing technologies 
                        compared with other Federal technology transfer 
                        programs and the SBIR program;
                          ``(iv) to the extent practicable, an 
                        evaluation of the economic benefits achieved by 
                        the STTR program, including the economic rate 
                        of return;
                          ``(v) an analysis of how Federal agencies are 
                        using small businesses that have completed 
                        Phase II under the STTR program to fulfill 
                        their procurement needs; and
                          ``(vi) an analysis of whether the existing 
                        STTR allocation has impacted the effectiveness 
                        of the program in achieving its goals;
                  ``(C) make recommendations with respect to the issues 
                described in subparagraph (A), (D), and (E) of 
                subsection (a)(2) and subparagraph (B) of this 
                paragraph; and
                  ``(D) 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 that 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--
                  ``(A) not later than 4 years after the date of 
                enactment of the Creating Jobs Through Small Business 
                Innovation 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 and the 
                Committee on Science, Space, and Technology of the 
                House of Representatives, a report regarding the study 
                conducted under paragraph (1) and containing the 
                recommendations described in paragraph (1); and
                  ``(B) not later than 2 years after the date of 
                enactment of the Creating Jobs Through Small Business 
                Innovation Act of 2011, 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 and the Committee on Science, Space, and 
                Technology of the House of Representatives, a report of 
                preliminary findings and recommendations regarding the 
                study conducted under paragraph (1)(B).''.

SEC. 308. TECHNOLOGY INSERTION REPORTING REQUIREMENTS.

  Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is further amended by adding at the end the following:
  ``(ll) 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. 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 further amended by adding at the end the following:
  ``(mm) 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. 310. 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 further amended by adding at the end the 
following:
  ``(nn) 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;
                  ``(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 waste, fraud, and 
                abuse prevention activities;
                  ``(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 (dd);
                  ``(I) carrying out subsection (hh);
                  ``(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.
          ``(4) Coordination with ig.--Each Federal agency shall 
        coordinate the activities funded under subparagraph (E), (F), 
        or (G) of paragraph (1) with their respective Inspectors 
        General, when appropriate, and each Federal agency that 
        allocates more than $50,000,000 to the SBIR program of the 
        Federal agency for a fiscal year may share such funding with 
        its Inspector General when the Inspector General performs such 
        activities.''.
  (b) Technical and Conforming Amendments.--
          (1) In general.--Section 9 of the Small Business Act (15 
        U.S.C. 638), as amended by this Act, is further amended--
                  (A) in subsection (f)(2), 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)--
                          (i) by striking paragraph (4); and
                          (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) 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 (nn)(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), by striking ``shall not 
                make available for the purpose'' and inserting the 
                following: ``shall not--
                  ``(A) 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
                  ``(B) 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. 311. GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING COMPANY, 
                    HEDGE FUND, AND PRIVATE EQUITY FIRM INVOLVEMENT.

  Not later than 2 years after the date of enactment of this Act, and 
every 2 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, hedge fund, and private 
        equity firm involvement under section 9 of the Small Business 
        Act; and
          (2) submit to Congress a report regarding the study conducted 
        under paragraph (1).

SEC. 312. REDUCING VULNERABILITY OF SBIR AND STTR PROGRAMS TO FRAUD, 
                    WASTE, AND ABUSE.

  (a) Fraud, Waste, and Abuse Prevention.--
          (1) Amendments required for fraud, waste, and abuse 
        prevention.--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.
          (2) Content of amendments.--The amendments required under 
        paragraph (1) shall include--
                  (A) definitions or descriptions of fraud, waste, and 
                abuse;
                  (B) guidelines for the monitoring and oversight of 
                applicants to and recipients of awards under the SBIR 
                program or the STTR program;
                  (C) a requirement that each Federal agency that 
                participates in the SBIR program or STTR program 
                include information concerning the method established 
                by the Inspector General of the Federal agency to 
                report fraud, waste, and abuse (including any telephone 
                hotline or Web-based platform)--
                          (i) on the website 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; and
                  (D) a requirement that each applicant for and small 
                business concern that receives funding under the SBIR 
                program or the STTR program shall certify whether the 
                applicant or small business concern is in compliance 
                with the laws relating to the SBIR program and the STTR 
                program and the conduct guidelines established under 
                the SBIR Policy Directive and the STTR Policy 
                Directive.
          (3) Consultation.--The Administrator shall develop the 
        certification required under paragraph (2)(D) in cooperation 
        with the Council of Inspectors General on Integrity and 
        Efficiency and the Office of Advocacy of the Administration.
          (4) Inspectors general.--The Inspector General of each 
        Federal agency that participates in the SBIR program or STTR 
        program shall cooperate to prevent fraud, waste, and abuse in 
        the SBIR program and the STTR program by--
                  (A) establishing fraud detection indicators;
                  (B) reviewing regulations and operating procedures of 
                the Federal agency;
                  (C) coordinating information sharing between Federal 
                agencies, to the extent otherwise permitted under 
                Federal law; and
                  (D) improving the education and training of, and 
                outreach to--
                          (i) administrators of the SBIR program and 
                        the STTR program of the Federal agency;
                          (ii) applicants to the SBIR program or the 
                        STTR program; and
                          (iii) recipients of awards under the SBIR 
                        program or the STTR program.
  (b) Study and Report.--Not later than 1 year after the date of 
enactment of this Act to establish a baseline of changes made to the 
program to fight fraud, waste, and abuse, and every 3 years thereafter 
to evaluate the effectiveness of the agency strategies, the Comptroller 
General of the United States shall--
          (1) conduct a study that evaluates--
                  (A) 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);
                  (B) 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;
                  (C) 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;
                  (D) 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;
                  (E) 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
                  (F) the extent to which the Inspector General of each 
                Federal agency that participates in the SBIR and STTR 
                program effectively conducts investigations, audits, 
                inspections, and outreach relating to the SBIR and STTR 
                programs of the Federal agency; and
          (2) submit to the Committee on Small Business and 
        Entrepreneurship of the Senate, the Committee on Small Business 
        and the Committee on Science, Space, and Technology 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. 313. 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.''.

SEC. 314. REDUCING FRAUD, WASTE, AND ABUSE.

  Not later than 4 years after the date of enactment of this Act, and 
every 4 years thereafter, the Comptroller General of the United States 
shall--
          (1) conduct a study of 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;
          (2) make recommendations with respect to the issues described 
        in paragraph (1); and
          (3) submit to the head of each agency described in section 
        108(a) of the Small Business Reauthorization Act of 2000 (15 
        U.S.C. 638 note), the Committee on Small Business and 
        Entrepreneurship of the Senate, and the Committee on Small 
        Business and the Committee on Science, Space, and Technology of 
        the House of Representatives a report regarding the study 
        conducted under paragraph (1) and containing the 
        recommendations described in paragraph (2).

                      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. 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 further amended by adding at the end the following:
  ``(oo) 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, Space, and Technology 
                        of the House of Representatives.''.

SEC. 502. 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 further amended by adding at the end the following:
  ``(pp) 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.''.

SEC. 503. LOAN RESTRICTIONS.

  (a) Rule Required.--For purposes of section 9 of the Small Business 
Act (15 U.S.C. 638), the Administrator shall promulgate a rule not 
later than 180 days after the date of enactment of this Act that 
determines what restrictions, conditions, or covenants contained in a 
note, bond, debenture, other evidence of indebtedness, or preferred 
stock constitute affiliation for purposes of section 121.103(a) of 
title 13, Code of Federal Regulations, as in effect on January 1, 2011.
  (b) Failure To Promulgate.--If the Administrator fails to promulgate 
a rule in the time period required under subsection (a), the holder of 
a note, bond, debenture, other evidence of indebtedness, or preferred 
stock shall be considered to be affiliated with the debtor or issuer of 
the preferred stock until such time as the Administrator promulgates 
the rule required under subsection (a).

SEC. 504. PROGRAM DIVERSIFICATION.

  Federal agencies shall encourage applications under the SBIR and STTR 
programs (to the extent that the projects relate to the mission of the 
Federal agency) from--
          (1) small business concerns in geographic areas 
        underrepresented in the SBIR and STTR programs or located in 
        rural areas (as defined in section 1393(a)(2) of the Internal 
        Revenue Code of 1986);
          (2) small business concerns owned and controlled by women;
          (3) small business concerns owned and controlled by veterans;
          (4) small business concerns owned and controlled by 
        minorities;
          (5) small business concerns owned and controlled by people 
        with disabilities; and
          (6) small business concerns located in a geographic area 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.

                        II. Purpose and Summary

    The purpose of H.R. 1425 is to reauthorize the Small 
Business Innovation Research (SBIR) and Small Business 
Technology Transfer (STTR) programs through Fiscal Year 2014, 
to increase SBIR and STTR award sizes to reflect changes in 
inflation, to allow small businesses with majority venture 
capital backing to compete for a limited percentage of awards, 
and to collect better data on the SBIR and STTR programs to 
evaluate the effectiveness of the programs and to prevent 
fraud, waste, and abuse.

              III. Background and Need for the Legislation

    The Small Business Innovation Research (SBIR) program was 
originally established when the Congress passed the Small 
Business Innovation Development Act in 1982 (P.L. 97-219).
    The original objectives of the SBIR program included:
           Stimulation of technological innovation in 
        the small business sector;
           Increased use of the small business sector 
        to meet the government's research and development (R&D) 
        needs;
           Additional involvement of minority and 
        disadvantaged individuals in the process; and
           Expanded commercialization of the results of 
        federally funded R&D.
The 1992 SBIR reauthorization (P.L. 102-564) placed greater 
emphasis on the objective of commercialization of SBIR 
projects.
    Current law requires that every federal department with an 
extramural R&D budget of $100 million or more establish and 
operate an SBIR program. Eleven federal departments have SBIR 
programs, including the Departments of Agriculture, Commerce, 
Defense, Education, Energy, Health and Human Services, Homeland 
Security, and Transportation; the Environmental Protection 
Agency, the National Aeronautics and Space Administration 
(NASA); and the National Science Foundation (NSF). Under the 
program, each qualifying federal department is mandated to set 
aside 2.5 percent of its applicable extramural R&D for the SBIR 
program. Cumulatively, the SBIR program makes almost $2 billion 
in awards to small businesses annually.
    The Small Business Technology Transfer (STTR) program was 
created in 1992 to provide federal R&D funding for research 
proposals that are developed and executed cooperatively between 
a small firm and a scientist in a nonprofit research 
organization, and fall under the mission requirements of the 
federal funding agency. Federal departments with annual 
extramural research budgets over $1 billion must set aside 0.3 
percent for STTR programs. Currently, the Departments of 
Energy, Defense, and Health and Human Services, as well as NASA 
and NSF participate in the STTR program. Across the 
participating agencies, approximately $800 million in STTR 
awards are made annually.
    The SBIR and STTR programs have been operating under 
temporary extensions since their authorizations expired in 2008 
and 2009, respectively. This bill will increase the size 
guidelines for award amounts for Phase I and Phase II SBIR and 
STTR awards, will enable majority venture capital backed firms 
to compete for a limited percentage of SBIR awards, and will 
improve evaluation of the programs through greater data 
collection, sharing of best practices, and increased efforts to 
prevent fraud, waste, and abuse. H.R. 1425 will reauthorize the 
SBIR and the STTR programs through Fiscal Year 2014.

                          IV. Hearing Summary

    The Technology and Innovation Subcommittee of the Committee 
on Science, Space, and Technology held a hearing on March 31, 
2011 entitled ``The Role of Small Business in Innovation and 
Job Creation: The SBIR and STTR Programs.'' The purpose of the 
hearing was to examine the role of the Small Business 
Innovation Research (SBIR) and the Small Business Technology 
Transfer (STTR) Programs in promoting innovation.
    The Subcommittee received testimony from: Dr. Sally Rockey, 
Deputy Director for Extramural Research at the National 
Institutes of Health; Dr. Donald Siegel, Dean and Professor at 
the School of Business, University at Albany, State University 
of New York, and a Member of the research team for the 
Committee for Capitalizing on Science, Technology, and 
Innovation, National Research Council of the National 
Academies; Mr. Mark Crowell, Executive Director and Associate 
Vice President for Innovation Partnerships and 
Commercialization at the University of Virginia; Mr. Doug 
Limbaugh, Chief Executive Officer of Kutta Technologies; and 
Ms. Laura McKinney, President and Chief Executive Officer of 
Galois, Inc.

                       V. Committee Consideration

    On April 7, 2011, H.R. 1425, the Creating Jobs Through 
Small Business Innovation Act of 2011 was introduced by Rep. 
Renee Ellmers (R-NC 2), and co-sponsored by Rep. Jason Altmire 
(D-PA 4), Rep. Judy Biggert (R-IL 13), Rep. Howard Coble, (R-NC 
6), Rep. Sam Graves (R-MO 6), Rep. Ralph Hall (R-TX 4), Rep. 
Eddie Bernice Johnson (D-TX 30), Rep. Daniel Lipinski (D-IL 3), 
Rep. Benjamin Quayle (R-AZ 3), Rep. Cedric L. Richmond (D-LA 
2), and Rep. David Wu (D-OR 1). H.R. 1425 was referred to the 
Committee on Small Business and the Committee on Science, 
Space, and Technology and the Committee on Armed Services.
    On April 13, 2011 the Subcommittee on Technology and 
Innovation met to consider H.R. 1425 and ordered it favorably 
reported to the Full Committee, as amended, by voice vote.
    On May 4, 2011 the Committee on Science, Space, and 
Technology met in open markup session and ordered H.R. 1425, 
favorably reported to the House, as amended, by voice vote.

                          VI. Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion to order H.R. 1425, favorably reported to the House, as 
amended, was agreed to by a voice vote.
    During Subcommittee on Technology and Innovation 
consideration of H.R. 1425 the following amendments were 
considered:


    During Full Committee consideration of H.R. 1425 the 
following amendments were considered:


              VII. Summary of Major Provisions of the Bill


                        TITLE I--REAUTHORIZATION

Extension length

    H.R. 1425 reauthorizes the SBIR and STTR programs for 3 
years until September 30, 2014.

SBIR and STTR award levels

    The bill increases the size of SBIR and STTR awards from 
$100,000 to $150,000 for Phase I, and from $750,000 to $1 
million for Phase II, and requires the SBA to make annual 
adjustments of the award sizes for inflation. Agencies are 
prohibited from issuing an SBIR or STTR award if the size of 
the award exceeds the award guidelines established in this 
section by more than 50 percent.

Agency and program flexibility

    H.R. 1425 allows SBIR and STTR applicants to receive awards 
for subsequent SBIR or STTR phases at another agency and also 
allows small business concerns which received SBIR or STTR 
awards to receive awards for subsequent phases in either the 
STTR or SBIR program, respectively. Agencies are also permitted 
to make a Phase II award to a small business concern that has 
already completed the work typically done during Phase I, and 
to make a sequential Phase II award for a single project. For 
all awards, agencies must verify that any activity to be 
performed with respect to a project with a Phase I and Phase II 
award has not been funded from another federal agency.

Participation by firms with substantial investment from multiple 
        venture capital operating companies in a portion of the SBIR 
        Program

    The National Institutes of Health, the Department of 
Energy, the National Aeronautics and Space Administration, and 
the National Science Foundation (NSF) are permitted to award up 
to 45 percent of SBIR funds to firms owned in majority part by 
multiple venture capital companies, hedge funds, or private 
equity firms. All other SBIR federal agencies shall allow small 
businesses owned in majority part by multiple venture capital 
companies, hedge funds, or private equity firms to compete for 
up to 35 percent of the agency's SBIR funds. The bill defines 
what affiliations are between various outside investors (such 
as venture capital companies, private equity firms, etc.) and 
small business concerns for purposes of determining whether the 
combination is eligible for an award under the SBIR program.

Collaborating with federal laboratories and research and development 
        centers

    The bill reduces the burden on cooperation between SBIR/
STTR firms and federal laboratories by ensuring that such 
subcontracting is generally permitted without the requirement 
for a waiver. The provision also ensures that subcontracting to 
federal laboratories is not required of SBIR or STTR awardees. 
Further, it clarifies that firms that have entered into a 
cooperative agreement with a federal laboratory are eligible to 
receive SBIR/STTR awards. Finally, the section limits the 
required advance payment from a small business concern working 
with a federal laboratory or federally funded research and 
development center to 30 days for expenses.

          TITLE II COMMERCIALIZATION AND OUTREACH INITIATIVES

Technical assistance for awardees

    H.R. 1425 increases the amount of discretionary technical 
assistance that SBIR and STTR agencies can contract out to 
provide to awardees from $4,000 to $5,000 for Phase I awards 
and from $4,000 to $5,000 per year for Phase II awards. It also 
requires agencies to provide SBIR and STTR award winners who 
wish to procure their own technical assistance with the 
allowable amount.

Commercialization Readiness Program and Pilot

    The SBIR Commercialization Pilot Program (CPP) at the 
Department of Defense (DOD) is made permanent and extends it to 
the department's STTR program. The provision authorizes the 
Secretary of Defense to establish goals for transitioning Phase 
III technologies in subcontracting plans for contracts of $100 
million or more. The provision also requires the Secretary of 
Defense to set a goal to increase the number of Phase II 
contracts that lead to technology transition into programs of 
record or fielded systems and to use incentives to encourage 
agency program managers and prime contractors to meet that 
goal. All non-DOD SBIR agencies are authorized to create 
Commercialization Readiness Pilot Programs (using no more than 
10% of their program authorization) to grant post-Phase II 
awards up to $3 million to support advanced development of 
small business technologies.

Interagency Policy Committee

    H.R. 1425 directs the Office of Science and Technology 
Policy to establish an SBIR/STTR Interagency Policy Committee 
to review and make policy recommendations on ways to improve 
the effectiveness and efficiency of the SBIR and STTR programs.

Shortened period for final decisions on proposals and applications

    Section 206 of H.R. 1425 requires that not later than 90 
days after, and if the Administrator authorizes an extension, 
then not later than 180 days, from the date on which the 
solicitation closes for SBIR and STTR programs, that the 
Administrator make a decision on each proposal submitted. It 
also allows the Director of the National Institutes of Health 
(NIH) to make an award under the SBIR or STTR programs provided 
an application for award undergoes a technical and scientific 
peer review

                  TITLE III--OVERSIGHT AND EVALUATION

Streamlining annual evaluation requirements

    This provision requires the Administration to report to 
Congress at least annually the number of proposals received 
from firms with venture capital, private equity, or hedge fund 
investment, including those owned and controlled by multiple 
venture capital, private equity, or hedge fund firms. It also 
requires the Administration to report on efforts to increase 
outreach to firms owned and controlled by women and socially or 
economically disadvantaged individuals, the implementation and 
compliance with the allocation of funds for firms majority 
owned and controlled by multiple venture capital, private 
equity or hedge fund companies, and appeals of Phase III awards 
and notices of noncompliance with the SBIR and the STTR Policy 
Directives.
    Finally, the section requires the Administration to 
coordinate the implementation of electronic databases at the 
participating agencies.

Public and government databases and data collection

    The bill requires that the public database maintained by 
the Administrator include information on the ownership makeup 
of a firm, and that the government database maintained by the 
Administrator in coordination with the agencies for the 
purposes of evaluation of the SBIR and STTR programs include 
information on the ownership structure and affiliations of 
awardee firms. Agencies must annually collect this data.

Continued evaluation by the National Academy of Sciences

    This section requires the head of each Agency described in 
subsection (a) to cooperatively enter into an agreement with 
the National Academy of Sciences for the National Research 
Council to continue its evaluation of the SBIR program through 
the end of fiscal year 2021 and requires that updates of the 
studies be provided to Congress every four years from the date 
of enactment. The section also authorizes the National Research 
Council to expand its study to include a study of how the STTR 
program has stimulated technological innovation and used small 
businesses to meet Federal technology transfer objectives.

Pilot to allow funding for administrative, oversight, and contract 
        processing costs

    H.R. 1425 requires that the Administrator allow each 
Federal agency to use not more than 3 percent of the funds 
allocated to the SBIR programs for costs relating to 
administrative, oversight and contract processing activities 
for SBIR programs, commercialization initiatives, technical 
assistance initiatives, and outreach initiatives to raise 
awareness of, and increase participation in, the SBIR and STTR 
programs.

Reducing vulnerability of SBIR and STTR programs to fraud, waste, and 
        abuse

    Language in H.R. 1425 requires the Administrator to, not 
later than 90 days after the enactment of this Act, amend the 
SBIR Policy Directive and the STTR Policy Directive to include 
a set of specific measures to prevent fraud, waste, and abuse. 
The section also requires the Inspectors General of 
participating Federal agencies to coordinate activities to 
prevent and detect fraud, waste, and abuse.

                      TITLE IV--POLICY DIRECTIVES

Conforming amendments to the SBIR and the STTR policy directives

    The bill requires conforming amendments to the SBA's SBIR 
and STTR Policy Directives within 180 days to implement the 
provisions of this Act. It also requires that the 
Administration publish the SBIR and STTR Policy Directives in 
the Code of Federal Regulations within 180 days

                       TITLE V--OTHER PROVISIONS

    H.R. 1425 includes provisions: requiring agencies to 
develop metrics and annually evaluate their programs; 
articulating that all SBIR and STTR awards are made through a 
competitive, merit-based process; requiring the SBA to develop 
regulations regarding small business loan restrictions; and 
requiring participating Federal agencies to encourage SBIR and 
STTR applications from underrepresented business groups.

                         VIII. Committee Views

    In 1982, legislators created the SBIR program to 
incorporate more small businesses into the federal research 
innovation partnership. The program later expanded to the STTR 
program, incorporating research institutions to collaborate 
with small businesses. The SBIR program has been found by the 
National Research Council, an independent body, in the 
Council's Assessment of the SBIR Program to be ``sound in 
concept and effective in practice.''
    The SBIR and STTR programs have been significant engines of 
job creation and have been catalysts for innovation across our 
nation. The Committee supports the reauthorization of these 
vital programs.

Increased award sizes

    The Committee agrees with National Research Council 
recommendations to increase SBIR and STTR program award sizes 
from $100,000 to $150,000 for Phase I awards and from $750,000 
to $1 million for Phase II awards. These award sizes reflect 
increases in inflation since the previous award guidelines were 
set, allowing Phase I and Phase II awards to better achieve 
their research and development objectives.

Increased data collection for program evaluation

    It is extremely important to measure the effectiveness and 
the efficiency of the SBIR and STTR programs in achieving their 
objectives. There is currently a lack of sufficient detailed 
information about participation in, and outcomes of, the SBIR 
and STTR programs across the agencies. Therefore, H.R. 1425 
requires participating Federal agencies to collect more data on 
program participants and maintain greater information on 
program administration. The Committee expects that this data 
will inform future SBIR and STTR program authorizations and 
regulations, helping taxpayers achieve a stronger return on 
their investment.

Interagency policy committee

    The Committee anticipates that the Interagency Policy 
Committee, established in Section 204 of the bill, will be 
jointly chaired by OSTP and the Small Business Administration, 
and include members from the SBIR and STTR agencies, as well as 
the Office of Management and Budget. The Interagency Policy 
Committee should utilize the increased collection of data 
required under H.R. 1425 to make recommendations on ways to 
improve the outcomes and administration of the SBIR and STTR 
programs.

Shortened period for final decisions on proposals and applications

    H.R. 1425 includes a requirement for agencies to make a 
final decision on proposals not later than 90 days after a SBIR 
or STTR solicitation has closed. The intent of this provision 
is to ensure that small businesses receive information about 
their applications in a timely manner.
    The Committee added a provision in subcommittee markup, 
permitting both the National Science Foundation (NSF) and the 
National Institutes of Health (NIH) an exemption from this 
requirement, in order to allow these two agencies to fulfill 
their standard peer review requirements, which typically take 
longer than 90 days to complete. The Committee's view is that 
these two agencies have a rigorous peer review process to which 
all extramural research grants are subjected, and that this 
process ensures the high quality of SBIR and STTR grants.
    However, the Committee does not intend for the NSF and NIH 
peer review exemption to allow these agencies to ignore the 90-
day requirement. Both agencies should strive to adhere to 
Section 206, and when the peer review process necessitates 
exceeding the 90-day requirement, NSF and NIH program 
administrators should make every effort to make decisions on 
grants as expeditiously as possible.

Administration, oversight, and outreach

    The bill provides agencies the ability, for the first time, 
to use up to three percent of SBIR program funding to support 
outreach and other administrative activities. The Committee 
supports the flexibility of the provision, which allows 
agencies the ability to choose how these funds can be used. 
Allowable activities for the three percent include: program 
administration and personnel, outreach and technical 
assistance, commercialization outreach initiatives, and 
prevention of waste, fraud and abuse. As provided in H.R. 1425, 
an agency may choose to spend any or all of that funding on any 
of these activities.
    The 1982 Act that established the SBIR program included 
four primary goals. One of those goals was ``to foster and 
encourage participation by minority and disadvantaged persons 
in technological innovation''. This goal remains unchanged, and 
all SBIR agencies are working to achieve this goal. To gather 
specific data on this topic, H.R. 1425 requires all 
participating agencies to report on the extent to which it is 
increasing outreach and awards to firms owned and controlled by 
women and social or economically disadvantaged individuals. GAO 
is also tasked with reporting exactly how much money agencies 
are spending on outreach activities.
    Recognizing that the SBIR program is utilized by 11 
different agencies with different needs, the Committee supports 
the flexibility provided for the three percent pilot program 
and not further restricting how these funds may be spent. The 
Committee expects that each agency will strive to encourage 
applications from individuals that are shown to be 
underrepresented in the SBIR/STTR programs.

Maintaining the current amount set-aside from agency research budgets 
        for SBIR and STTR

    The Committee did not include a provision to increase the 
percentage of extramural research and development funding 
allocated to the SBIR or STTR programs. Federal research 
agencies face tight budgets in the future, and current 
competition for extramural research grants is very high. The 
Committee's view historically has been that the SBIR and STTR 
programs are very successful, but should grow as the overall 
agency budget grows. Committee Members do not see significant 
justification to increase the size of these programs at the 
cost of decreasing the remainder of the extramural research 
budgets.
    Recognizing that H.R. 1425 makes a number of significant 
changes to the current program, the Committee acknowledges that 
the overall demand for SBIR and STTR awards could be impacted. 
Consequently, the Committee supports the three-year 
authorization, as further modifications to the program, 
including revisiting the merits of changing the set-aside 
amount, will be prudent after three years.

Participation of small businesses owned in majority part by multiple 
        venture capital operating companies

    The Committee believes that allowing small businesses that 
are owned in majority part by multiple venture capital 
companies to compete for a limited percentage of SBIR awards 
will increase the applicant pool and potentially lead to better 
research and development projects.
    In a 2009 study entitled, Venture Funding and the NIH SBIR 
Program, the National Research Council stated that the 2003 SBA 
Administrative Law ruling prohibiting majority venture capital 
backed firms from participating in the SBIR program ``falls 
disproportionately on the most promising firms--i.e., those 
firms that have repeatedly been selected by both NIH for their 
promising technologies and by venture investors for their 
commercial potential.'' The Committee feels the absence of 
these companies in the program may have diminished the research 
and development outcomes of the program.
    However, the Committee also believes that the SBIR program 
should reserve a majority of program funding for small 
businesses that don't have majority venture capital backing. 
Therefore, the maximum percentage of SBIR award funding for 
which a company with majority venture capital backing can 
compete is 45 percent at the National Institutes of Health, the 
Department of Energy, the National Aeronautics and Space 
Administration, and the National Science Foundation. The 
maximum percentage at all other participating agencies is 35 
percent.
    The Committee supports a three-year reauthorization period 
to measure the effectiveness of these changes to the 
legislation.

Measures to detect and prevent fraud, waste and abuse

    H.R. 1425 includes several new measures to detect and 
prevent fraud, waste, and abuse in the SBIR and STTR programs. 
The bill requires that the government database maintained by 
the SBA Administrator and participating Federal agencies 
include identifying information on SBIR and STTR applicants and 
recipients. The Committee believes this enhanced information 
will help program administrators prevent the provision of 
duplicate awards for similar work across different 
participating Federal agencies. The Committee also supports 
provisions that require participating agency Inspectors General 
to cooperate to prevent fraud, waste, and abuse through 
coordination of activities and sharing of best practices.

                    IX. Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee held an oversight 
hearing and made findings that are reflected in the descriptive 
portions of this report.

        X. Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the performance goals and 
objectives of the Committee are reflected in the descriptive 
portions of this report, including the goal to reauthorize the 
Small Business Innovation Research Program (SBIR) and the Small 
Business Technology Transfer Program (STTR) to create jobs 
through innovation while evaluating each program's 
effectiveness and preventing fraud, waste, and abuse.

 XI. New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                       XII. Advisory on Earmarks

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, 
the Committee finds that H.R. 1425, the ``Creating Jobs Through 
Small Business Innovation Act of 2011'', contains no earmarks.

                     XIII. Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

               XIV. Congressional Budget Office Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974.

                                                      May 18, 2011.
Hon. Ralph M. Hall,
Chairman, Committee on Science, Space, and Technology,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1425, the Creating 
Jobs Through Small Business Innovation Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 1425-Creating Job Through Small Business Innovation Act of 2011

    Summary: H.R. 1425 would extend and expand programs that 
require certain federal agencies to set aside portions of their 
research and development budgets for small businesses. The bill 
also would require participating agencies to collect and report 
information about program participants that would be used both 
for program evaluation and for business development. In 
addition, H.R. 1425 would authorize the Government 
Accountability Office (GAO) and the National Academy of 
Sciences (NAS) to study the operation and effectiveness of the 
programs.
    Based on information from the Small Business Administration 
(SBA) and other participating agencies, CBO estimates that 
implementing H.R. 1425 would cost $14 million over the 2012-
2016 period, subject to appropriation of the necessary amounts. 
Pay-as-you-go procedures do not apply to this legislation 
because it would not affect direct spending or revenues.
    H.R. 1425 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would impose no costs on state, local, or tribal 
governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 1425 is shown in the following table. 
The costs of this legislation fall within several budget 
functions, including 050 (national defense), 250 (general 
science, space, and technology), and 550 (health).

----------------------------------------------------------------------------------------------------------------
                                                                 By fiscal year, in millions of dollars--
                                                         -------------------------------------------------------
                                                            2012     2013     2014     2015     2016   2012-2016
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

National Academy of Science Study:
    Estimated Authorization Level.......................        6        0        0        0        8        14
    Estimated Outlays...................................        1        2        2        1        1         7
Additional Agency Activities:
    Estimated Authorization Level.......................        3        2        1        1        1         8
    Estimated Outlays...................................        2        2        1        1        1         7
    Total Changes Under H.R. 1425:
        Estimated Authorization Level...................        9        2        1        1        9        22
        Estimated Outlays...............................        3        4        3        2        2        14
----------------------------------------------------------------------------------------------------------------

    Basis of estimate: Under current law, the Small Business 
Innovation Research (SBIR) program requires federal agencies 
with extramural budgets for research and development (R&D) that 
exceed $100 million per year to set aside 2.5 percent of that 
budget for contracts with small businesses. (Extramural budgets 
consist of expenditures for activities not performed by agency 
employees.) Likewise, the Small Business Technology Transfer 
(STTR) program requires federal agencies with extramural 
budgets for R&D that exceed $1 billion per year to set aside 
0.3 percent of that budget for cooperative research between 
small businesses and a federal laboratory or nonprofit research 
institution. Eleven agencies currently participate in one or 
both programs, including the Departments of Defense, Health and 
Human Services, Energy, Agriculture, and Homeland Security, as 
well as the National Aeronautics and Space Administration, the 
National Science Foundation, and the Environmental Protection 
Agency.
    The cost of those programs to the participating agencies 
consists primarily of personnel and associated overhead 
expenses to solicit applications, award contracts, prepare 
reports, and track outcomes. The organizational structure of 
the program offices varies. Some agencies have full-time staff 
members devoted to the SBIR and STTR programs, with other staff 
assisting as part of their duties; other agencies, however, 
have employees working part-time on the program.
    For this estimate, CBO assumes that the bill will be 
enacted before the end of fiscal year 2011 and that the 
necessary funds will be appropriated near the start of each 
year. Based on information from SBA and participating agencies, 
CBO estimates that implementing H.R. 1425 would cost $14 
million over the 2012-2016 period, assuming appropriation of 
the necessary amounts.

National Academy of Sciences study

    H.R. 1425 would direct certain agencies participating in 
the SBIR program to enter into an agreement with the NAS for 
the National Research Council to study the degree to which the 
SBIR and STTR programs have stimulated innovation and 
encouraged the use of small businesses to meet federal R&D 
needs. Reports presenting results of the studies would be due 
four years after enactment and every four years thereafter. 
Using those results, NAS also would develop recommendations for 
improving the SBIR and STTR programs. Based on information from 
NAS, CBO estimates that conducting the studies as required by 
H.R. 1425 would cost $7 million over the 2012-2016 period.

Additional agency activities

    H.R. 1425 would require SBA to upgrade the data systems 
used to consolidate information from participating agencies and 
evaluate their performance. The bill also would require SBA to 
develop new performance measures and regulations to reflect 
changes in the SBIR and STTR programs. Based on information 
from SBA, CBO estimates that those new efforts would cost $5 
million over the 2012-2016 period, assuming appropriation of 
the necessary amounts.
    The bill also would require GAO to conduct several studies 
for the Congress, including one to determine whether the 
agencies participating in the SBIR and STTR programs are 
complying with the programs' requirements to allocate a 
specific portion of their R&D budgets and another to assess 
whether agencies participating in the SBIR program are 
sufficiently protecting the intellectual property rights of the 
small businesses that receive awards under the program. CBO 
estimates that conducting such studies would cost about $2 
million over the 2012-2016 period, subject to the availability 
of appropriated funds.

Reauthorization and expansion of the SBIR and STTR programs

    The bill would extend both the SBIR and STTR programs 
through 2014. Under current law, both programs are scheduled to 
terminate on May 31, 2011, when a temporary reauthorization of 
all SBA programs expires.
    To cover the administrative costs of the programs, H.R. 
1425 would establish a three-year pilot program that would 
authorize participating agencies to use up to 3 percent of the 
R&D amounts set aside for the SBIR program, rather than paying 
those costs from general operating funds. The pilot program 
also would allow agencies to use R&D funds to provide outreach 
and technical assistance to recipients of awards and to carry 
out additional duties as required under the bill. CBO estimates 
that the amount allocated for administrative expenses under the 
pilot program would fully offset such costs incurred by 
participating agencies in 2012, 2013, and 2014, when 
authorization for the programs would expire.
    Pay-As-You-Go considerations: None.
    Intergovernmental and private-sector impact: H.R. 1425 
contains no intergovernmental or private-sector mandates as 
defined in UMRA. The bill would create a grant program to 
assist public universities in the commercialization of research 
and technology. Any costs to universities would be incurred 
voluntarily.
    Previous CBO estimate: On March 11, 2011, CBO transmitted a 
cost estimate for S. 493, the SBIR/STTR Reauthorization Act of 
2011, as ordered reported by the Senate Committee on Small 
Business and Entrepreneurship on March 9, 2011. The Senate bill 
would extend the programs through 2019 and raise the amounts 
that participating agencies would set aside for the SBIR and 
STTR programs. The Senate bill also would authorize funds for 
the Federal and State Technology Partnership Program.
    Estimate prepared by: Federal costs: Susan Willie and 
Martin von Gnechten; Impact on state, local, and tribal 
governments: Elizabeth Cove Delisle; Impact on the private 
sector: Sam Wice.
    Estimate approved by: Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                     XV. Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                   XVI. Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

               XVII. Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                   XVIII. Section-by-Section Analysis


         TITLE I--REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension length

    This section extends the SBIR and STTR programs for 3 years 
until September 30, 2014.

Sec. 102. SBIR and STTR award levels

    This section increases the size of SBIR and STTR awards 
from $100,000 to $150,000 for Phase I and from $750,000 to $1 
million for Phase II, and requires the SBA to make annual 
adjustments of the award sizes for inflation. The provision 
prohibits any agency from issuing an SBIR or STTR award if the 
size of the award exceeds the award guidelines established in 
this section by more than 50 percent. Finally, the provision 
requires federal agencies to maintain information on awards 
exceeding the award guidelines; including the award amount; a 
justification for exceeding the guidelines; the identity and 
location of the recipient; and whether or not the recipient 
firm has received venture capital, hedge fund, or private 
equity firm investment, and if so, whether or not it is 
majority owned and controlled by one or more venture capital 
companies, hedge funds, or private equity firms. Nothing shall 
prevent a Federal agency from supplementing an award under the 
SBIR or STTR programs with Federal funds that are outside of 
the SBIR and STTR allocations.

Sec. 103. Agency and program flexibility

    Section 103 allows SBIR and STTR applicants to receive 
awards for subsequent SBIR or STTR phases at another agency and 
also allows small business concerns which received SBIR or STTR 
awards to receive awards for subsequent phases in either the 
STTR or SBIR program, respectively.

Sec. 104. Elimination of Phase II invitations

    This section requires that federal agencies conduct their 
solicitation of Phase II SBIR and STTR proposals without any 
invitation, pre-screening, pre-selection, or down-selection 
process between the first and second phase.

Sec. 105. Phase flexibility

    This section grants agencies the ability to provide a Phase 
II Award if the Agency finds that the small business concern 
has already completed the work typically done during Phase I.

Sec. 106 and Sec. 107. Participation by firms with substantial 
        investment from multiple venture capital operating companies in 
        a portion of the SBIR program

    Section 106 allows the Departments of Health and Human 
Services, and Energy, the National Aeronautics and Space 
Administration and the National Science Foundation to permit 
firms majority owned and controlled by one or more venture 
capital companies, one or more hedge funds, or one or more 
private equity firms to compete for up to 45 percent of the 
agency's SBIR funds. All other qualifying federal agencies 
shall allow majority owned private investment backed small 
businesses to compete for up to 35 percent of the agency's SBIR 
funds. Sec. 107 defines affiliations between various outside 
investors (such as venture capital companies, private equity 
firms, etc.) and small business concerns for purposes of 
determining whether the combination is eligible for an award 
under the SBIR program.

Sec. 108. SBIR and STTR special acquisition preference

    This section codifies the language from the SBIR and STTR 
Policy Directives confirming the intent of Congress to 
establish a special acquisition preference for SBIR and STTR 
Phase III awards. The provision clarifies that preference for 
contracts concerning research developed with SBIR or STTR funds 
should go to the developers and holders of SBIR and STTR 
technologies to the greatest extent practicable.

Sec. 109. Collaborating with federal laboratories and research and 
        development centers

    Section 109 reduces the burden on cooperation between SBIR/
STTR firms and federal laboratories and/or federally funded 
research and development centers by ensuring that such 
subcontracting is generally permitted without the requirement 
for a waiver. The provision also ensures that subcontracting to 
federal laboratories is not required of SBIR or STTR awardees. 
Further, it clarifies that firms that have entered into a 
cooperative agreement with a federal laboratory are eligible to 
receive SBIR/STTR awards. The section also limits the required 
advance payment from a small business concern working with a 
federal laboratory or federally funded research and development 
center to 30 days for expenses.

Sec. 110. Notice requirement

    This section ensures that the SBA is notified any time the 
SBIR or STTR policy directives are challenged in court.

Sec. 111. Additional SBIR and STTR awards

    The section allows SBIR and STTR applicants to receive one 
sequential Phase II award for a single project. It also 
requires agencies to verify that any activity to be performed 
with respect to a project with a Phase I and Phase II award has 
not been funded from another Federal agency.

          TITLE II--COMMERCIALIZATION AND OUTREACH INITIATIVES

Sec. 201. Technical assistance for awardees

    This section increases the total amount of funds that a 
participating federal agency may use to contract with a vendor 
to provide technical assistance services for an individual SBIR 
or STTR award recipient from $4,000 to $5,000 for Phase I 
awards and from $4,000 to $5,000 per year for Phase II awards, 
and extends the term of an allowable contract from three years 
to five years. The provision also states that this amount shall 
be in addition to the amount of the recipient's award. It also 
requires agencies to provide SBIR and STTR award winners who 
wish to procure their own technical assistance with the 
allowable amount. Further, the provision prohibits the agencies 
from using these funds to pay its contractor for technical 
assistance for a given SBIR or STTR award unless the contractor 
provides the technical assistance to that awardee. Finally, the 
provision prohibits a federal agency from entering into a 
contract with a vendor, under which the amount provided for 
technical assistance is based on the total number of Phase I or 
Phase II awards.

Sec. 202. Commercialization Readiness Program at Department of Defense

    Section 202 extends the SBIR Commercialization Pilot 
Program (CPP) at the Department of Defense permanently and 
extends it to the department's STTR program. It also changed 
the name to the Commercialization Readiness Program (CRP). The 
provision authorizes the Secretary of Defense to establish 
goals for transitioning Phase III technologies in 
subcontracting plans for contracts of $100 million or more. The 
provision also requires the Secretary of Defense to set a goal 
to increase the number of Phase II contracts that lead to 
technology transition into programs of record or fielded 
systems and to use incentives to encourage agency program 
managers and prime contractors to meet that goal. Finally, the 
provision includes reporting requirements on the status of 
projects funded through CRP.

Sec. 203. Commercialization Readiness Pilot Program for civilian 
        agencies

    This section authorizes agencies other than the Department 
of Defense to create Commercialization Readiness Pilot Programs 
(using no more than 10 percent of their program authorization) 
to support advanced development of small business technologies. 
The provision authorizes these agencies to grant post-Phase II 
awards up to two times the regular size (up to $3 million). The 
bill directs agencies making awards under this program to 
consider whether the technology to be supported by the award is 
likely to be manufactured in the United States. Authority to 
establish such a pilot program expires at the end of FY2014.

Sec. 204. Interagency Policy Committee

    This section directs the Office of Science and Technology 
Policy to establish an SBIR/STTR Interagency Policy Committee 
to review and make policy recommendations on ways to improve 
the effectiveness and efficiency of the SBIR and STTR programs.

Sec. 205. Clarifying definition of Phase III

    This section revises the definition of ``Phase III'' of the 
SBIR program so that it is clear that such work shall be 
directed toward commercial applications and derives from 
research and development completed in earlier phases.

Sec. 206. Shortened period for final decisions on proposals and 
        applications

    This section requires that not later than 90 days after, 
and if the Administrator authorizes an extension, then not 
later than 180 days, from the date on which the solicitation 
closes for SBIR and STTR programs, that the Administrator make 
a decision on each proposal submitted. The bill allows the 
Director of the National Institutes of Health (NIH) and the 
Director of the National Science Foundation (NSF) to make an 
award under the SBIR or STTR programs only if an application 
for award undergoes agency technical and scientific peer 
review.

Sec. 207. Phase 0 Proof of Concept Partnership Pilot Program

    This section creates a three-year pilot program which 
terminates at the end of Fiscal Year 2014, under which the 
Director of the National Institutes of Health (NIH) shall use 
$10 million of the NIH STTR allocation to provide awards to 
qualifying universities and research institutions to set up 
``Proof of Concept Partnerships'' to fund competitive grants of 
no more than $100,000 for researchers to support proof of 
concept work and commercialization mentoring. Qualifying 
institutions may be awarded up to $1,000,000 per year for up to 
3 years. The NIH Director shall submit a report to the 
congressional committees of jurisdiction, evaluating the 
activities of the program.

                  TITLE III--OVERSIGHT AND EVALUATION

Sec. 301. Streamlining annual evaluation requirements

    This section requires the Administration to report at least 
annually to Congress the number of proposals received from 
firms with venture capital, private equity, or hedge fund 
investment, including those owned and controlled by multiple 
venture capital, private equity, or hedge fund firms. It also 
requires the Administration to report on efforts to increase 
outreach to firms owned and controlled by women and socially or 
economically disadvantaged individuals, the implementation and 
compliance with the allocation of funds for firms majority 
owned and controlled by multiple venture capital, private 
equity or hedge fund companies, and appeals of Phase III awards 
and notices of noncompliance with the SBIR and the STTR Policy 
Directives. Finally, the section requires the Administration to 
coordinate the implementation of electronic databases at the 
participating agencies.

Sec. 302. Data collection from agencies for SBIR

    This section requires agencies with an SBIR program to 
collect data annually on several issues including whether or 
not an applicant business or awardee: has venture capital, 
private equity or hedge fund investment, and if so the extent 
of that investment; is majority owned and controlled by 
multiple venture capital, private equity, or hedge fund firms; 
has foreign investors and who they are; is owned by a woman or 
has a woman as a principal investigator; is owned by a socially 
or economically disadvantaged individual or has a socially or 
economically disadvantaged individual as a principal 
investigator; has a university affiliation; or is from a state 
receiving less SBIR funding for small businesses than a 
majority of other states. The provision also requires agencies 
to justify awards given that exceed the statuary guidelines.

Sec. 303. Data collection from agencies for STTR

    Section 303 requires agencies with an STTR program to 
collect data annually on several issues including whether or 
not an applicant business or awardee: has venture capital, 
private equity or hedge fund investment, and if so, the extent 
of that investment; is majority owned and controlled by 
multiple venture capital, private equity, or hedge fund firms; 
has foreign investors and who they are; is owned by a woman or 
has a woman as a principal investigator; is owned by a socially 
or economically disadvantaged individual or has a socially or 
economically disadvantaged individual as a principal 
investigator; has a university affiliation; or is located in a 
state receiving less STTR funding than a majority of other 
states. The provision also requires agencies to justify awards 
given that exceed the statutory guidelines.

Sec. 304. Public database

    This section requires that the public database maintained 
by the Administrator include information on whether or not a 
firm receiving an award: has venture capital, private equity or 
hedge fund investment; is majority owned and controlled by 
multiple venture capital, private equity, or hedge fund firms 
is owned by a woman or has a woman as a principal investigator; 
is owned by a socially or economically disadvantaged individual 
or has a socially or economically disadvantaged individual as a 
principal investigator; or has a university affiliation.

Sec. 305. Government database

    This section requires that the government database 
maintained by the Administrator in coordination with the 
agencies for the purposes of evaluating the SBIR and STTR 
programs and of preventing fraud, waste, and abuse shall 
contain the following: identifying information on the small 
business that has been awarded an SBIR or STTR award; 
information on the key individual that will carry out the SBIR 
or STTR project; information on the awarded project; 
information on the ownership structure and affiliations of 
awardee firms that have venture capital, private equity, or 
hedge fund investment, and that are majority owned and 
controlled by multiple venture capital, private equity, or 
hedge fund firms. This government database shall also contain: 
the names, titles, and contact information of the key 
individuals that will carry out the SBIR and STTR awarded 
project; 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 SBIR and STTR awards; and a list of any individual 
or small business concern that has been convicted of a fraud-
related crime or has been found civilly liable for a fraud 
related violation under the SBIR or STTR program.

Sec. 306. Accuracy in funding base calculations

    Section 306 requires the Comptroller General of the United 
States to conduct an audit of the SBIR and STTR programs to 
determine whether federal agencies are complying with the 
expenditure requirements.

Sec. 307. Continued evaluation by the National Academy of Sciences

    This section authorizes the National Academy of Sciences to 
continue its evaluation of the SBIR program through the end of 
fiscal year 2021 and requires that updates of the studies be 
provided to Congress every four years from the date of 
enactment. The bill requires the NRC to estimate the number of 
jobs created in the United States as a result of the SBIR and 
STTR programs. The bill also requires the NRC to conduct a 
comprehensive study of the STTR program to evaluate the 
effectiveness of the program in promoting collaborations 
between small businesses and research institutions, in 
transferring technology, and in commercializing technologies. 
The NRC shall also evaluate the economic effects of the 
program, the extent to which federal agencies are using Phase 
II award winners to fulfill their procurement needs, and the 
effectiveness of the current STTR allocation.

Sec. 308. Technology insertion reporting requirements

    This section requires the Administration to include in its 
annual report to Congress information on Phase III awards 
issued by SBIR and STTR agencies, including the dollar amount 
of these awards, their recipients, and the name of the agency 
or the component of the agency issuing them.

Sec. 309. Obtaining consent from SBIR and STTR applicants to release 
        contact information to economic development organizations

    This section requires each Federal agency that conducts an 
SBIR or STTR program to enable small business concerns that are 
SBIR or STTR applicants to indicate whether that Federal agency 
has consent to identify the small business concern to local and 
State-level economic development organizations.

Sec. 310. Pilot to allow funding for administrative, oversight, and 
        contract processing costs

    Section 310 requires that the Administrator allow each 
Federal agency to not use more than 3 percent of the funds 
allocated to the SBIR programs for the first full three fiscal 
years beginning after the enactment of this subsection for 
costs relating to administration of the program; provision of 
outreach and technical assistance; implementation of 
commercialization and outreach initiatives; activities related 
to oversight and congressional reporting including waste, 
fraud, and abuse prevention activities; implementation of 
oversight and quality control measures; contract processing 
costs relating to the SBIR and STTR programs; and funding for 
additional personnel assistance with application reviews. Each 
Federal agency shall coordinate its activities to prevent 
waste, fraud, and abuse with its respective Inspector General, 
and each Federal agency that allocates more than $50 million to 
its SBIR program may share such funding with its Inspector 
General to carry out these activities.

Sec. 311. GAO Study with Respect to Outside Investment Involvement

    This section requires that not later than 2 years after the 
date of the enactment of this Act, and every 2 years 
thereafter, the Comptroller General of the United States 
conduct a study on the impact of requirements relating to 
venture capital operating company, private equity firm, and 
hedge fund involvement in the SBIR and STTR programs.

Sec. 312. Reducing Vulnerability of SBIR and STTR Programs to Fraud, 
        Waste, and Abuse

    This section requires the Administrator to, not later than 
90 days after the enactment of this Act, amend the SBIR Policy 
Directive and the STTR Policy Directive to include measures to 
prevent fraud, waste, and abuse. This section:
           Details guidelines for applicants, 
        recipients, and Federal agencies to follow, allowing 
        for more robust oversight and accountability in the 
        program;
           Requires the SBA Administrator to develop 
        specific applicant certification requirements in 
        cooperation with the Council on Inspectors General on 
        Integrity and Efficiency and the Office of Advocacy at 
        the Administration;
           Provides suggested certification guidelines;
           Requires that Inspectors General of 
        participating SBIR/STTR federal agencies cooperate to 
        prevent fraud, waste, and abuse through coordination of 
        activities and sharing of best practices; and
           Requires that the Government Accountability 
        Office conduct a study assessing the effectiveness of 
        federal agencies in combating fraud, waste, and abuse.

Sec. 313. Simplified Paperwork Requirements

    This section directs the SBA Administrator to issue 
regulations or guidelines to (the extent possible) standardize 
SBIR and STTR application paperwork.

Sec. 314. Simplified Paperwork Requirements

    Section 314 directs Comptroller General to conduct a study 
of and make recommendations on the effectiveness of the 
government and public databases in reducing vulnerabilities of 
the SBIR and STTR programs to fraud, waste, and abuse.

                      TITLE IV--POLICY DIRECTIVES

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

    This section requires conforming amendments to the SBA's 
SBIR and STTR Policy Directives within 180 days to implement 
the provisions of this Act. It also requires that the 
Administration publish the SBIR and STTR Policy Directives in 
the Code of Federal Regulations within 180 days.

                       TITLE V--OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR program goals

    Section 501 directs each federal agency required to 
participate in an SBIR or STTR program to: (1) develop metrics 
in conjunction with the Interagency Policy Committee described 
in Sec. 204 to evaluate the effectiveness and benefit of such 
program; (2) conduct an annual evaluation of their program 
using such metrics; and (3) report evaluation results annually 
to the Administrator and the relevant Congressional Committees.

Sec. 502. Competitive selection procedures for SBIR and STTR programs

    This section requires all SBIR or STTR funds to be awarded 
pursuant to competitive and merit-based selection procedures.

Sec. 503. SBA Regulations on loan restrictions

    Section 503 requires the SBA to develop regulations solely 
for purposes of the SBIR program that when or how restrictive 
covenants in loan agreements would constitute control for 
purposes of affiliation.

Sec. 504. Program diversification

    This section requires federal agencies to encourage 
applications from small business concerns located in rural 
areas, areas underrepresented in SBIR and STTR programs, and 
areas with unemployment rates greater than the national 
average, as well as business concerns owned or controlled by 
women, veterans, and minorities. This section requires federal 
agencies to encourage applications from small business concerns 
owned and controlled by persons with disabilities.

       XIX. Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                           SMALL BUSINESS ACT




           *       *       *       *       *       *       *
  Sec. 3. (a) * * *

           *       *       *       *       *       *       *

  (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).
  (bb) Hedge fund.--In this Act, the term ``hedge fund'' has 
the meaning given that term in section 13(h)(2) of the Bank 
Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).
  (cc) Private equity firm.--In this Act, the term ``private 
equity firm'' has the meaning given the term ``private equity 
fund'' in section 13(h)(2) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1851(h)(2)).

           *       *       *       *       *       *       *

  Sec. 9. (a) * * *
  (b) It shall be the duty of the Administration, and it is 
hereby empowered--
          (1) * * *

           *       *       *       *       *       *       *

          (7) to report not less than annually to the Committee 
        on Small Business of the Senate, and to the Committee 
        on Science and the Committee on Small Business of the 
        House of Representatives, on the SBIR and STTR programs 
        of the Federal agencies and the Administration's 
        information and monitoring efforts related to the SBIR 
        and [STTR programs, including the data] STTR programs, 
        including--
                  (A) the data on output and outcomes collected 
                pursuant to subsections [(g)(10), (o)(9), and 
                (o)(15), the number of proposals received from, 
                and the number and total amount of awards to, 
                HUBZone small business concerns under each of 
                the SBIR and STTR programs, and a description] 
                (g)(8) and (o)(9);
                  (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, hedge fund, or private equity 
                firm investment (including those majority-owned 
                by multiple venture capital operating 
                companies, hedge funds, or private equity 
                firms) 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;
                  (D) general information about the 
                implementation of, and compliance with the 
                allocation of funds required under, subsection 
                (dd) for firms owned in majority part by 
                venture capital operating companies, hedge 
                funds, or private equity firms 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 of the extent to which 
                Federal agencies are providing in a timely 
                manner information needed to maintain the 
                database described in subsection (k); [and]
          (8) to provide for and fully implement the tenets of 
        Executive Order No. 13329 (Encouraging Innovation in 
        Manufacturing)[.]; and
          (9) 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.

           *       *       *       *       *       *       *

  (e) For the purpose of this section--
          (1) * * *

           *       *       *       *       *       *       *

          (4) the term ``Small Business Innovation Research 
        Program'' or ``SBIR'' means a program under which a 
        portion of a Federal agency's research or research and 
        development effort is reserved for award to small 
        business concerns through a uniform process having--
                  (A) * * *
                  (B) a second phase, [to further] which shall 
                not include any invitation, pre-screening, pre-
                selection, or down-selection process for 
                eligibility for Phase II, that will further 
                develop proposals which meet particular program 
                needs, in which awards shall be made based on 
                the scientific and technical merit and 
                feasibility of the proposals, as evidenced by 
                the first phase, considering, among other 
                things, the proposal's commercial potential, as 
                evidenced by--
                          (i) * * *

           *       *       *       *       *       *       *

                  (C) where appropriate, a third phase for work 
                that derives from, extends, or completes 
                efforts made under prior funding agreements 
                under the SBIR program--
                          (i) * * *
                          (ii) for which awards from non-SBIR 
                        Federal funding sources are used for 
                        the continuation of research or 
                        research and development that has been 
                        competitively selected using peer 
                        review or [scientific review criteria] 
                        merit-based selection procedures;

           *       *       *       *       *       *       *

          (6) the term ``Small Business Technology Transfer 
        Program'' or ``STTR'' means a program under which a 
        portion of a Federal agency's extramural research or 
        research and development effort is reserved for award 
        to small business concerns for cooperative research and 
        development through a uniform process having--
                  (A) * * *
                  (B) a second phase, [to further develop 
                proposed ideas to] which shall not include any 
                invitation, pre-screening, pre-selection, or 
                down-selection process for eligibility for 
                Phase II, that will further develop proposals 
                that meet particular program needs, in which 
                awards shall be made based on the scientific, 
                technical, and commercial merit and feasibility 
                of the idea, as evidenced by the first phase 
                and by other relevant information; and
                  (C) where appropriate, a third phase for work 
                that derives from, extends, or completes 
                efforts made under prior funding agreements 
                under the STTR program--
                          (i) * * *

           *       *       *       *       *       *       *

          (8) the term ``research institution'' means a 
        nonprofit institution, as defined in section 4(5) of 
        the Stevenson-Wydler Technology Innovation Act of 1980, 
        and includes federally funded research and development 
        centers, as identified by the National Scientific 
        Foundation in accordance with the governmentwide 
        Federal Acquisition Regulation issued in accordance 
        with section 35(c)(1) of the Office of Federal 
        Procurement Policy Act (or any successor regulation 
        thereto); [and]
          (9) the term ``commercial applications'' shall not be 
        construed to exclude testing and evaluation of 
        products, services, or technologies for use in 
        technical or weapons systems, and further, awards for 
        testing and evaluation of products, services, or 
        technologies for use in technical or weapons systems 
        may be made in either [the second or the third phase] 
        Phase II or Phase III of the Small Business Innovation 
        Research Program and of the Small Business Technology 
        Transfer Program, as defined in this subsection[.];
          (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;
          (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).
  (f) Federal Agency Expenditures for the SBIR Program.--
          (1) * * *
          (2) Limitations.--A Federal agency [shall not--
                  [(A) 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]
                  [(B) make available for the purpose] shall 
                not make available for the purpose of meeting 
                the requirements of paragraph (1) an amount of 
                its extramural budget for basic research which 
                exceeds the percentages specified in paragraph 
                (1).

 [Effective on the first day of the fourth full fiscal year following 
 the date of enactment, section 310(b)(3)(A) of H.R. 1425 provides for 
  amendments to section 9(f)(2) of the Small Business Act as follows:]

          (2) Limitations.--A Federal agency [shall not make 
        available for the purpose] shall not--
                  (A) 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
                  (B) make available for the purpose of meeting 
                the requirements of paragraph (1) an amount of 
                its extramural budget for basic research which 
                exceeds the percentages specified in paragraph 
                (1).

           *       *       *       *       *       *       *

  (g) Each Federal agency required by subsection (f) to 
establish a small business innovation research program shall, 
in accordance with this Act and regulations issued hereunder--
          (1) * * *

           *       *       *       *       *       *       *

          (4)(A)   unilaterally receive and evaluate proposals 
        resulting from SBIR proposals; and
          (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;

           *       *       *       *       *       *       *

          (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, hedge fund, 
                        or private equity firm investment or is 
                        majority-owned by multiple venture 
                        capital operating companies, hedge 
                        funds, or private equity firms, and, if 
                        so--
                                  (I) the amount of venture 
                                capital, hedge fund, or private 
                                equity firm investment 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) 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
                          (vi) 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;
          [(8)] (9)   make an annual report on the SBIR program 
        to the Small Business Administration and the Office of 
        Science and Technology Policy;
          [(9)] (10)   include, as part of its annual 
        performance plan as required by subsections (a) and (b) 
        of section 1115 of title 31, United States Code, a 
        section on its SBIR program, and shall submit such 
        section 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;
          [(10) collect, and maintain in a common format in 
        accordance with 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); and]
          (11) provide for and fully implement the tenets of 
        Executive Order No. 13329 (Encouraging Innovation in 
        Manufacturing)[.]; and
          (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.

           *       *       *       *       *       *       *

  (i) Annual Reporting.--
          (1) In general.--Each Federal agency required by this 
        section to have an SBIR program or to establish goals 
        shall report annually to the Small Business 
        Administration the number of awards (including awards 
        under subsection (y)) pursuant to grants, contracts, or 
        cooperative agreements over $10,000 in amount and the 
        dollar value of all such awards, identifying SBIR 
        awards and comparing the number and amount of such 
        awards with awards to other than small business 
        concerns.

           *       *       *       *       *       *       *

  (j)(1) Policy directives.--The Small Business Administration, 
after consultation with the Administrator of the Office of 
Federal Procurement Policy, the Director of the Office of 
Science and Technology Policy, and the Intergovernmental 
Affairs Division of the Office of Management and Budget, shall, 
within one hundred and twenty days of the enactment of the 
Small Business Innovation Development Act of 1982, issue policy 
directives for the general conduct of the SBIR programs within 
the Federal Government, including providing for--
          (A) * * *
          (B) a simplified, standardized funding process which 
        provides for (i) the timely receipt and review of 
        proposals; (ii) outside peer review for at least [phase 
        two] Phase II proposals, if appropriate; (iii) 
        protection of proprietary information provided in 
        proposals; (iv) selection of awardees; (v) retention of 
        rights in data generated in the performance of the 
        contract by the small business concern; (vi) transfer 
        of title to property provided by the agency to the 
        small business concern if such a transfer would be more 
        cost effective than recovery of the property by the 
        agency; (vii) cost sharing; and (viii) cost principles 
        and payment schedules;

           *       *       *       *       *       *       *

          (2) Modifications.--Not later than 90 days after the 
        date of enactment of the Small Business Research and 
        Development Enhancement Act of 1992, the Administrator 
        shall modify the policy directives issued pursuant to 
        this subsection to provide for--
                  (A) * * *
                  (B) continued use by a small business concern 
                participating in [the third phase] Phase III of 
                the SBIR program, as a directed bailment, of 
                any property transferred by a Federal agency to 
                the small business concern in [the second 
                phase] Phase II of an SBIR program for a period 
                of not less than 2 years, beginning on the 
                initial date of the concern's participation in 
                [the third phase] Phase III of such program;

           *       *       *       *       *       *       *

                  (D) an increase to [$100,000] $150,000 in the 
                amount of funds which an agency may award in 
                [the first phase] Phase I of an SBIR program, 
                and to [$750,000] $1,000,000 in [the second 
                phase] Phase II of an SBIR program, and an 
                adjustment of such amounts [once every 5 years 
                to reflect economic adjustments and 
                programmatic considerations] every year for 
                inflation;

           *       *       *       *       *       *       *

                  (F) enhanced outreach efforts to increase the 
                participation of socially and economically 
                disadvantaged small business concerns, as 
                defined in section 8(a)(4), and the 
                participation of small businesses that are 51 
                percent owned and controlled by women in 
                technological innovation and in SBIR programs, 
                including [the third phase] Phase III of such 
                programs, and the collection of data to 
                document such participation;
                  (G) technical and programmatic guidance to 
                encourage agencies to develop gap-funding 
                programs to address the delay between an award 
                for [the first phase] Phase I of an SBIR 
                program and the application for and extension 
                of an award for [the second phase] Phase II of 
                such program;
                  (H) procedures to ensure that a small 
                business concern that submits a proposal for a 
                funding agreement for [the first phase] Phase I 
                of an SBIR program and that has received more 
                than 15 [second phase] Phase II SBIR awards 
                during the preceding 5 fiscal years is able to 
                demonstrate the extent to which it was able to 
                secure [third phase] Phase III funding to 
                develop concepts resulting from previous 
                [second phase] Phase II SBIR awards; and

           *       *       *       *       *       *       *

          (3) Additional modifications.--Not later than 120 
        days after the date of the enactment of the Small 
        Business Innovation Research Program Reauthorization 
        Act of 2000, the Administrator shall modify the policy 
        directives issued pursuant to this subsection--
                  (A) to clarify that the rights provided for 
                under paragraph (2)(A) apply to all Federal 
                funding awards under this section, including 
                [the first phase (as described in subsection 
                (e)(4)(A))] Phase I, [the second phase (as 
                described in subsection (e)(4)(B))] Phase II, 
                and [the third phase (as described in 
                subsection (e)(4)(C))] Phase III;
                  (B) to provide for the requirement of a 
                succinct commercialization plan with each 
                application for a [second phase] Phase II award 
                that is moving toward commercialization;

           *       *       *       *       *       *       *

  (k) Database.--
          (1) Public database.--Not later than 180 days after 
        the date of the enactment of the Small Business 
        Innovation Research Program Reauthorization Act of 
        2000, the Administrator shall develop, maintain, and 
        make available to the public a searchable, up-to-date, 
        electronic database that includes--
                  (A) the name, size, location, and an 
                identifying number assigned by the 
                Administrator, of each small business concern 
                that has received a [first phase] Phase I or 
                [second phase] Phase II SBIR or STTR award from 
                a Federal agency;
                  (B) a description of each [first phase] Phase 
                I or [second phase] Phase II SBIR or STTR award 
                received by that small business concern, 
                including--
                          (i) * * *

           *       *       *       *       *       *       *

                  (D) information regarding mentors and 
                Mentoring Networks, as required by section 
                35(d); [and]
                  (E) with respect to assistance under the STTR 
                program only--
                          (i) * * *

           *       *       *       *       *       *       *

                          (iv) how the proceeds from 
                        commercialization, marketing, or sale 
                        of technology resulting from each 
                        assisted STTR project were allocated 
                        (by percentage) between the small 
                        business concern and the research 
                        institution[.]; and
                  (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, hedge fund, 
                        or private equity firm investment and, 
                        if so, whether the small business 
                        concern is registered as majority-owned 
                        by multiple venture capital operating 
                        companies, hedge funds, or private 
                        equity firms as required under 
                        subsection (dd)(3);
                          (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; or
                          (iv) 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).
          (2) Government database.--[Not later than 180 days 
        after the date of the enactment of the Small Business 
        Innovation Research Program Reauthorization Act of 
        2000] Not later than 90 days after the date of 
        enactment of the Creating Jobs Through Small Business 
        Innovation Act of 2011, the Administrator, in 
        consultation with Federal agencies required to have an 
        SBIR program pursuant to subsection (f)(1) or an STTR 
        program pursuant to subsection (n)(1), shall develop 
        and maintain a database to be used exclusively for SBIR 
        and STTR program evaluation that--
                  (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 and titles of the key 
                        individuals that will carry out the 
                        project, the position each key 
                        individual holds in the small business 
                        concern, and contact information for 
                        each key individual;
                          (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, 
                        hedge funds, or private equity firms; 
                        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;
                  [(A)] (B)   contains for each [second phase] 
                Phase II award made by a Federal agency--
                          (i) * * *
                          (ii) information collected in 
                        accordance with paragraph (3) on 
                        additional investment from any source, 
                        other than [first phase] Phase I or 
                        [second phase] Phase II SBIR or STTR 
                        awards, to further the research and 
                        development conducted under the award; 
                        and

           *       *       *       *       *       *       *

                  [(B)] (C)   includes any narrative 
                information that a small business concern 
                receiving a [second phase] Phase II award 
                voluntarily submits to further describe the 
                outputs and outcomes of its awards;
                  [(C) includes for each applicant for a first 
                phase or second phase award that does not 
                receive such an award--
                          [(i) the name, size, and location, 
                        and an identifying number assigned by 
                        the Administration;
                          [(ii) an abstract of the project; and
                          [(iii) the Federal agency to which 
                        the application was made;]
                  (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, hedge fund, or private equity 
                        firm investment, and, if so--
                                  (I) the amount of venture 
                                capital, hedge fund, or private 
                                equity firm investment as of 
                                the date of the award;
                                  (II) the percentage of 
                                ownership of the awardee held 
                                by a venture capital operating 
                                company, hedge fund, or private 
                                equity firm, including whether 
                                the awardee is majority-owned 
                                by multiple venture capital 
                                operating companies, hedge 
                                funds, or private equity firms; 
                                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;
                  [(D)] (E)   includes any other data collected 
                by or available to any Federal agency that such 
                agency considers may be useful for SBIR or STTR 
                program evaluation; [and]
                  [(E)] (F)   is available for use solely for 
                program evaluation purposes by the Federal 
                Government or, in accordance with policy 
                directives issued by the Administration, by 
                other authorized persons who are subject to a 
                use and nondisclosure agreement with the 
                Federal Government covering the use of the 
                database[.]; and
                  (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 been--
                          (i) convicted of a fraud-related 
                        crime involving funding received under 
                        the SBIR program or STTR program; or
                          (ii) found civilly liable for a 
                        fraud-related violation involving 
                        funding received under the SBIR program 
                        or STTR program.
          (3) Updating information for database.--
                  (A) In general.--A small business concern 
                applying for a [second phase] Phase II award 
                under this section shall be required to update 
                information in the database established under 
                this subsection for any prior [second phase] 
                Phase II award received by that small business 
                concern. In complying with this paragraph, a 
                small business concern may apportion sales or 
                additional investment information relating to 
                more than one [second phase] Phase II award 
                among those awards, if it notes the 
                apportionment for each award.
                  (B) Annual updates upon termination.--A small 
                business concern receiving a [second phase] 
                Phase II award under this section shall--
                          (i) * * *

           *       *       *       *       *       *       *

                  (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.

           *       *       *       *       *       *       *

  (l) Reporting of Awards Made From Single Proposal, to 
Multiple Award Winners, or to Critical Technology Topics.--
          (1) * * *
          (2) Multiple awards.--An agency referred to in 
        paragraph (1) shall include in its next annual report 
        required under subsection (g)(8) an accounting of the 
        awards the agency has made for [the first phase] Phase 
        I of an SBIR program during the reporting period to 
        entities that have received more than 15 awards for 
        [the second phase] Phase II of an SBIR program during 
        the preceding 5 fiscal years.

           *       *       *       *       *       *       *

  (m) [Termination.--
          [(1) In general.--Except as provided in paragraph 
        (2), the authorization]  Termination._The authorization 
        to carry out the Small Business Innovation Research 
        Program established under this section shall terminate 
        on September 30, 2008 2014.
          [(2) Exception for department of defense.--The 
        Secretary of Defense and the Secretary of each military 
        department are authorized to carry out the Small 
        Business Innovation Research Program of the Department 
        of Defense until September 30, 2010]
  (n) Required Expenditures for STTR by Federal Agencies.--
          (1) Required expenditure amounts.--
                  (A) [In general.--
                          [(i) Federal agencies generally.--
                        Except as provided in clause (ii), with 
                        respect] In general.--With respect to 
                        each fiscal year through fiscal year 
                        [2009] 2014, each Federal agency that 
                        has an extramural budget for research, 
                        or research and development, in excess 
                        of $1,000,000,000 for that fiscal year, 
                        shall expend with small business 
                        concerns not less than the percentage 
                        of that extramural budget specified in 
                        subparagraph (B), specifically in 
                        connection with STTR programs that meet 
                        the requirements of this section and 
                        any policy directives and regulations 
                        issued under this section.
                          [(ii) Department of defense.--The 
                        Secretary of Defense and the Secretary 
                        of each military department shall carry 
                        out clause (i) with respect to each 
                        fiscal year through fiscal year 2010.]

           *       *       *       *       *       *       *

  (o) Federal Agency STTR Authority.--Each Federal agency 
required to establish an STTR program in accordance with 
subsection (n) and regulations issued under this Act, shall--
          (1) * * *

           *       *       *       *       *       *       *

          (4)(A)   unilaterally receive and evaluate proposals 
        resulting from STTR solicitations; and
          (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;

           *       *       *       *       *       *       *

          [(9) collect such data from awardees as is necessary 
        to assess STTR program outputs and outcomes;]
          (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, hedge fund, 
                        or private equity firm investment or is 
                        majority-owned by multiple venture 
                        capital operating companies, hedge 
                        funds, or private equity firms, and, if 
                        so--
                                  (I) the amount of venture 
                                capital, hedge fund, or private 
                                equity firm investment 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) 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
                          (vi) 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;

           *       *       *       *       *       *       *

          (13) not later than July 31, 1993, develop procedures 
        for assessing the commercial merit and feasibility of 
        STTR proposals, as evidenced by--
                  (A) * * *
                  (B) the existence of [second phase] Phase II 
                funding commitments from private sector or non-
                STTR funding sources;
                  (C) the existence of [third phase] Phase III 
                follow-on commitments for the subject of the 
                research; and

           *       *       *       *       *       *       *

          [(15) collect, and maintain in a common format in 
        accordance with subsection (v), such information from 
        awardees as is necessary to assess the STTR program, 
        including information necessary to maintain the 
        database described in subsection (k); and]
          [(16)] (15)   provide for and fully implement the 
        tenets of Executive Order No. 13329 (Encouraging 
        Innovation in Manufacturing)[.]; and
          (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.
  (p) STTR Policy Directive.--
          (1) * * *
          (2) Contents.--The policy directive required by 
        paragraph (1) shall provide for--
                  (A) * * *
                  (B) a simplified, standardized funding 
                process that provides for--
                          (i) * * *

           *       *       *       *       *       *       *

                          (vi) continued use by a small 
                        business concern, as a directed 
                        bailment, of any property transferred 
                        by a Federal agency to the small 
                        business concern in [the second phase] 
                        Phase II of the STTR program for a 
                        period of not less than 2 years, 
                        beginning on the initial date of the 
                        concern's participation in [the third 
                        phase] Phase III of such program;

           *       *       *       *       *       *       *

                          (ix) 1-year awards for [the first 
                        phase] Phase I of an STTR program, 
                        generally not to exceed [$100,000] 
                        $150,000, and 2-year awards for [the 
                        second phase] Phase II of an STTR 
                        program, generally not to exceed 
                        [$750,000] $1,000,000, (each of which 
                        the Administrator shall adjust for 
                        inflation annually) greater or lesser 
                        amounts to be awarded at the discretion 
                        of the awarding agency, and shorter or 
                        longer periods of time to be approved 
                        at the discretion of the awarding 
                        agency where appropriate for a 
                        particular project;

           *       *       *       *       *       *       *

          (3) Modifications.--Not later than 120 days after the 
        date of enactment of this paragraph, the Administrator 
        shall modify the policy directive issued pursuant to 
        this subsection to clarify that the rights provided for 
        under paragraph (2)(B)(v) apply to all Federal funding 
        awards under this section, including [the first phase 
        (as described in subsection (e)(6)(A))] Phase I, [the 
        second phase (as described in subsection (e)(6)(B))] 
        Phase II, and [the third phase (as described in 
        subsection (e)(6)(C))] Phase III.
  (q) Discretionary Technical Assistance.--
          (1) In general.--Each Federal agency required by this 
        section to conduct an SBIR program or STTR program may 
        enter into an agreement with a vendor selected under 
        paragraph (2) to provide small business concerns 
        engaged in [SBIR projects] SBIR or STTR projects with 
        technical assistance services, such as access to a 
        network of scientists and engineers engaged in a wide 
        range of technologies, or access to technical and 
        business literature available through on-line data 
        bases, for the purpose of assisting such concerns in--
                  (A) * * *

           *       *       *       *       *       *       *

          (2) Vendor selection.--Each agency may select a 
        vendor to assist small business concerns to meet the 
        goals listed in paragraph (1) for a term not to exceed 
        [3 years] 5 years. Such selection shall be competitive 
        and shall utilize merit-based criteria.
          (3) Additional technical assistance.--
                  (A) [First phase]   Phase i.--Each agency 
                referred to in paragraph (1) may provide 
                services described in paragraph (1) to [first 
                phase] Phase I SBIR or STTR award recipients in 
                an amount equal to not more than [$4,000] 
                $5,000, which shall be in addition to the 
                amount of the recipient's award.
                  [(B) Second phase.--Each agency referred to 
                in paragraph (1) may authorize any second phase 
                SBIR award recipient to purchase, with funds 
                available from their SBIR awards, services 
                described in paragraph (1), in an amount equal 
                to not more than $4,000 per year.]
                  (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.
                  (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.
  (r) [Third Phase]   Phase III Agreements.--
          (1) In general.--In the case of a small business 
        concern that is awarded a funding agreement [for the 
        second phase] for Phase II of an SBIR or STTR program, 
        a Federal agency may enter into a [third phase] Phase 
        III agreement with that business concern for additional 
        work to be performed during or after the [second phase 
        period] Phase II period. The [second phase] Phase II 
        funding agreement with the small business concern may, 
        at the discretion of the agency awarding the agreement, 
        set out the procedures applicable to [third phase] 
        Phase III agreements with that agency or any other 
        agency.
          (2) Definition.--In this subsection, the term 
        ``[third phase] Phase III agreement'' means a follow-
        on, non-SBIR or non-STTR funded contract as described 
        in paragraph (4)(C) or paragraph (6)(C) of subsection 
        (e).

           *       *       *       *       *       *       *

          (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.

           *       *       *       *       *       *       *

  (u) Coordination of Technology Development Programs.--
          (1) * * *
          (2) Coordination requirements.--Each Federal agency 
        that is subject to subsection (f) and that has 
        established a technology development program may, in 
        each fiscal year, review for funding under that 
        technology development program--
                  (A) * * *
                  (B) any proposal for [the first phase] Phase 
                I of the SBIR program, if the proposal, though 
                meritorious, is not funded through the SBIR 
                program for that fiscal year due to funding 
                restraints, from a small business concern 
                located in--
                          (i) * * *

           *       *       *       *       *       *       *

  (v) [Simplified Reporting Requirements.--The Administrator]  
Reducing Paperwork and Compliance Burden.--
          (1) Standardization of reporting requirements.--The 
        Administrator shall work with the Federal agencies 
        required by this section to have an SBIR or STTR 
        program to standardize reporting requirements for the 
        collection of data from SBIR or STTR applicants and 
        awardees, including data for inclusion in the database 
        under subsection (k), taking into consideration the 
        unique needs of each agency, and to the extent 
        possible, permitting the updating of previously 
        reported information by electronic means. Such 
        requirements shall be designed to minimize the burden 
        on small businesses.
          (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.

           *       *       *       *       *       *       *

  (y) Commercialization [Pilot]   Readiness Program.--
          (1) In general.--The Secretary of Defense and the 
        Secretary of each military department is authorized to 
        create and administer a ``Commercialization [Pilot] 
        Readiness Program'' to accelerate the transition of 
        technologies, products, and services developed under 
        the Small Business Innovation Research Program or Small 
        Business Technology Transfer Program to Phase III, 
        including the acquisition process. 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).
          (2) Identification of research programs for 
        accelerated transition to acquisition process.--In 
        carrying out the Commercialization [Pilot] Readiness 
        Program, the Secretary of Defense and the Secretary of 
        each military department shall identify research 
        programs of the Small Business Innovation Research 
        Program or Small Business Technology Transfer Program 
        that have the potential for rapid transitioning to 
        Phase III and into the acquisition process.

           *       *       *       *       *       *       *

          [(4) Funding.--For payment of expenses incurred to 
        administer the Commercialization Pilot Program under 
        this subsection, the Secretary of Defense and each 
        Secretary of a military department is authorized to 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. Such funds--
                  [(A) shall not be subject to the limitations 
                on the use of funds in subsection (f)(2); and
                  [(B) shall not be used to make Phase III 
                awards.
          [(5) Evaluative report.--At the end of each fiscal 
        year, the Secretary of Defense shall submit to the 
        Committee on Armed Services and the Committee on Small 
        Business and Entrepreneurship of the Senate and the 
        Committee on Armed Services and the Committee on Small 
        Business of the House of Representatives an evaluative 
        report regarding activities under the Commercialization 
        Pilot Program. The report shall include--
                  [(A) an accounting of the funds used in the 
                Commercialization Pilot Program;
                  [(B) a detailed description of the 
                Commercialization Pilot Program, including 
                incentives and activities undertaken by 
                acquisition program managers, program executive 
                officers, and prime contractors; and
                  [(C) a detailed compilation of results 
                achieved by the Commercialization Pilot 
                Program, including the number of small business 
                concerns assisted and the number of projects 
                commercialized.
          [(6) Sunset.--The pilot program under this subsection 
        shall terminate at the end of fiscal year 2010.]
          (4) 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.
          (5) 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 Creating Jobs Through Small 
                Business Innovation 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.

 [Effective on the first day of the fourth full fiscal year following 
 the date of enactment, section 310(b)(3)(B) of H.R. 1425 provides for 
  amendments to section 9(y) of the Small Business Act by inserting a 
paragraph (4) after paragraph (3) and redesignating paragraphs (4) and 
  (5) as paragraphs (5) and (6), respectively, and reads as follows:]

          (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.
          [(4)] (5) Insertion incentives.--For any contract 
        with a value of not less than $100,000,000, the 
        Secretary of Defense is authorized to--
                  (A) * * *

           *       *       *       *       *       *       *

          [(5)] (6) Goal for sbir and sttr technology 
        insertion.--The Secretary of Defense shall--
                  (A) * * *

           *       *       *       *       *       *       *

  (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, hedge fund, or private 
                equity firm investment and, if so, whether the 
                recipient is majority-owned by multiple venture 
                capital operating companies, hedge funds, or 
                private equity firms.
          (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.
  (bb) Subsequent Phase II Awards.--
          (1) Agency flexibility.--A small business concern 
        that received a Phase I 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 a Phase I 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).
  (cc) Phase I Required.--Under this section, a Federal agency 
shall provide to a small business concern an award under Phase 
II of an SBIR program with respect to a project only if such 
agency finds that the small business concern has been provided 
an award under Phase I of an SBIR program with respect to such 
project or has completed the determinations described in 
subsection (e)(4)(A) with respect to such project despite not 
having been provided a Phase I award.
  (dd) Participation of Small Business Concerns Majority-Owned 
by Venture Capital Operating Companies, Hedge Funds, or Private 
Equity Firms in the SBIR Program.--
          (1) Authority.--Upon a written determination 
        described in paragraph (2) provided to the 
        Administrator, the Committee on Small Business and 
        Entrepreneurship of the Senate, and the Committee on 
        Small Business and the Committee on Science, Space, and 
        Technology 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, the 
                Administrator of the National Aeronautics and 
                Space Administration, and the Director of the 
                National Science Foundation may award not more 
                than 45 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, hedge funds, or private equity firms 
                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 35 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, hedge funds, or private 
                equity firms 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, hedge 
                fund, or private equity firm 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, hedge funds, or private equity firms 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, hedge 
                funds, or private equity firms.
          (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, hedge funds, or private 
                        equity firms 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, hedge funds, or private 
                        equity firms.
                  (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, hedge funds, or private 
                        equity firms, 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.
          (7) Evaluation criteria.--A Federal agency may not 
        use investment of venture capital or investment from 
        hedge funds or private equity firms as a criterion for 
        the award of contracts under the SBIR program or STTR 
        program.
  (ee) Venture Capital Operating Companies, Hedge Funds, and 
Private Equity Firms.--Effective only for the SBIR and STTR 
programs the following shall apply:
          (1) A business concern that has more than 500 
        employees shall not qualify as a small business 
        concern.
          (2) In determining whether a small business concern 
        is independently owned and operated under section 
        3(a)(1) or meets the small business size standards 
        instituted under section 3(a)(2), the Administrator 
        shall not consider a business concern to be affiliated 
        with a venture capital operating company, hedge fund, 
        or private equity firm (or with any other business that 
        the venture capital operating company, hedge fund, or 
        private equity firm has financed) if--
                  (A) the venture capital operating company, 
                hedge fund, or private equity firm does not own 
                50 percent or more of the business concern; and
                  (B) employees of the venture capital 
                operating company, hedge fund, or private 
                equity firm do not constitute a majority of the 
                board of directors of the business concern.
          (3) A business concern shall be deemed to be 
        ``independently owned and operated'' if--
                  (A) it is owned in majority part by one or 
                more natural persons or venture capital 
                operating companies, hedge funds, or private 
                equity firms;
                  (B) there is no single venture capital 
                operating company, hedge fund, or private 
                equity firm that owns 50 percent or more of the 
                business concern; and
                  (C) there is no single venture capital 
                operating company, hedge fund, or private 
                equity firm the employees of which constitute a 
                majority of the board of directors of the 
                business concern.
          (4) If a venture capital operating company, hedge 
        fund, or private equity firm controlled by a business 
        with more than 500 employees (in this paragraph 
        referred to as a ``VCOC, hedge fund, or private equity 
        firm under large business control'') has an ownership 
        interest in a small business concern that is owned in 
        majority part by venture capital operating companies, 
        hedge funds, or private equity firms, the small 
        business concern is eligible to receive an award under 
        the SBIR or STTR program only if--
                  (A) not more than two VCOCs, hedge funds, or 
                private equity firms under large business 
                control have an ownership interest in the small 
                business concern; and
                  (B) the VCOCs, hedge funds, or private equity 
                firms under large business control do not 
                collectively own more than 20 percent of the 
                small business concern.
  (ff) 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.
          (4) Advance payment.--If a small business concern 
        receiving an award under this section enters 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, the 
        Federal laboratory or federally funded research and 
        development center may not require advance payment from 
        the small business concern in an amount greater than 
        the amount necessary to pay for 30 days of such 
        activities.
  (gg) Additional SBIR and STTR Awards.--
          (1) Express authority for awarding a sequential phase 
        ii award.--A small business concern that receives a 
        Phase II SBIR award or a Phase II STTR award for a 
        project remains eligible to receive one additional 
        Phase II SBIR award or Phase II STTR award for 
        continued work on that project.
          (2) Preventing duplicative awards.--The head of a 
        Federal agency shall verify that any activity to be 
        performed with respect to a project with a Phase I or 
        Phase II SBIR or STTR award has not been funded under 
        the SBIR program or STTR program of another Federal 
        agency.
  (hh) 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, evaluation, and commercialization 
                assistance for SBIR and STTR Phase II 
                technologies; or
                  (B) to support the progress of research, 
                research and development, and commercialization 
                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 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 and the Committee on Science, 
                        Space, and Technology 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) Award criteria or consideration.--When making an 
        award under this section, the head of a covered Federal 
        agency shall give consideration to whether the 
        technology to be supported by the award is likely to be 
        manufactured in the United States.
          (6) 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.
          (7) Termination.--The authority to establish a pilot 
        program under this section expires at the end of fiscal 
        year 2014.
          (8) 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).
  (ii) NIH Peer Review Process.--Notwithstanding subsections 
(g)(4)(B) and (o)(4)(B), 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 only 
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).
  (jj) NSF Peer Review Process.--Notwithstanding subsections 
(g)(4)(B) and (o)(4)(B), the Director of the National Science 
Foundation may make an award under the SBIR program or the STTR 
program of the National Science Foundation only if the 
application for the award has undergone the National Science 
Foundation's technical and scientific peer review process and 
met all other applicable peer review procedures and guidelines 
pursuant to the National Science Foundation Act of 1950 (42 
U.S.C. 1861, et seq.) and other applicable Federal law.
  (kk) Phase 0 Proof of Concept Partnership Pilot Program.--
          (1) In general.--The Director of the National 
        Institutes of Health shall use $10,000,000 of the funds 
        allocated under subsection (n)(1) for a Proof of 
        Concept Partnership pilot program to accelerate the 
        creation of small businesses and the commercialization 
        of research innovations from qualifying institutions. 
        To implement this program, the Director shall award, 
        through a competitive, merit-based process, grants to 
        qualifying institutions. These grants shall only be 
        used to administer Proof of Concept Partnership awards 
        in conformity with this subsection.
          (2) Definitions.--In this subsection--
                  (A) the term ``Director'' means the Director 
                of the National Institutes of Health;
                  (B) the term ``pilot program'' refers to the 
                Proof of Concept Partnership pilot program; and
                  (C) the terms ``qualifying institution'' and 
                ``institution'' mean a university or other 
                research institution that participates in the 
                National Institutes of Health's STTR program.
          (3) Proof of concept partnerships.--
                  (A) In general.--A Proof of Concept 
                Partnership shall be set up by a qualifying 
                institution to award grants to individual 
                researchers. These grants should provide 
                researchers with the initial investment and the 
                resources to support the proof of concept work 
                and commercialization mentoring needed to 
                translate promising research projects and 
                technologies into a viable company. This work 
                may include technical validations, market 
                research, clarifying intellectual property 
                rights position and strategy and investigating 
                commercial or business opportunities.
                  (B) Award guidelines.--The administrator of a 
                Proof of Concept Partnership program shall 
                award grants in accordance with the following 
                guidelines:
                          (i) The Proof of Concept Partnership 
                        shall use a market-focused project 
                        management oversight process, 
                        including--
                                  (I) a rigorous, diverse 
                                review board comprised of local 
                                experts in translational and 
                                proof of concept research, 
                                including industry, start-up, 
                                venture capital, technical, 
                                financial, and business experts 
                                and university technology 
                                transfer officials;
                                  (II) technology validation 
                                milestones focused on market 
                                feasibility;
                                  (III) simple reporting 
                                effective at redirecting 
                                projects; and
                                  (IV) the willingness to 
                                reallocate funding from failing 
                                projects to those with more 
                                potential.
                          (ii) Not more than $100,000 shall be 
                        awarded towards an individual proposal.
                  (C) Educational resources and guidance.--The 
                administrator of a Proof of Concept Partnership 
                program shall make educational resources and 
                guidance available to researchers attempting to 
                commercialize their innovations.
          (4) Awards.--
                  (A) Size of award.--The Director may make 
                awards to a qualifying institution for up to 
                $1,000,000 per year for up to 3 years.
                  (B) Award criteria.--In determining which 
                qualifying institutions receive pilot program 
                grants, the Director shall consider, in 
                addition to any other criteria the Director 
                determines necessary, the extent to which 
                qualifying institutions--
                          (i) have an established and proven 
                        technology transfer or 
                        commercialization office and have a 
                        plan for engaging that office in the 
                        program implementation;
                          (ii) have demonstrated a commitment 
                        to local and regional economic 
                        development;
                          (iii) are located in diverse 
                        geographies and are of diverse sizes;
                          (iv) can assemble project management 
                        boards comprised of industry, start-up, 
                        venture capital, technical, financial, 
                        and business experts;
                          (v) have an intellectual property 
                        rights strategy or office; and
                          (vi) demonstrate a plan for 
                        sustainability beyond the duration of 
                        the funding award.
          (5) Limitations.--The funds for the pilot program 
        shall not be used--
                  (A) for basic research, but to evaluate the 
                commercial potential of existing discoveries, 
                including--
                          (i) proof of concept research or 
                        prototype development; and
                          (ii) activities that contribute to 
                        determining a project's 
                        commercialization path, to include 
                        technical validations, market research, 
                        clarifying intellectual property 
                        rights, and investigating commercial 
                        and business opportunities; or
                  (B) to fund the acquisition of research 
                equipment or supplies unrelated to 
                commercialization activities.
          (6) Evaluative report.--The Director shall submit to 
        the Committee on Science, Space, and Technology and the 
        Committee on Small Business of the House of 
        Representatives and the Committee on Small Business and 
        Entrepreneurship of the Senate an evaluative report 
        regarding the activities of the pilot program. The 
        report shall include--
                  (A) a detailed description of the 
                institutional and proposal selection process;
                  (B) an accounting of the funds used in the 
                pilot program;
                  (C) a detailed description of the pilot 
                program, including incentives and activities 
                undertaken by review board experts;
                  (D) a detailed compilation of results 
                achieved by the pilot program, including the 
                number of small business concerns included and 
                the number of business packages developed, and 
                the number of projects that progressed into 
                subsequent STTR phases; and
                  (E) an analysis of the program's 
                effectiveness with supporting data.
          (7) Sunset.--The pilot program under this subsection 
        shall terminate at the end of fiscal year 2014.
  (ll) 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.
  (mm) 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).
  (nn) 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;
                  (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 waste, 
                fraud, and abuse prevention activities;
                  (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 (dd);
                  (I) carrying out subsection (hh);
                  (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.
          (4) Coordination with ig.--Each Federal agency shall 
        coordinate the activities funded under subparagraph 
        (E), (F), or (G) of paragraph (1) with their respective 
        Inspectors General, when appropriate, and each Federal 
        agency that allocates more than $50,000,000 to the SBIR 
        program of the Federal agency for a fiscal year may 
        share such funding with its Inspector General when the 
        Inspector General performs such activities.
  (oo) 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, Space, 
                        and Technology of the House of 
                        Representatives.
  (pp) 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.

           *       *       *       *       *       *       *

                              ----------                              


     SECTION 108 OF THE SMALL BUSINESS REAUTHORIZATION ACT OF 2000

SEC. 108 NATIONAL RESEARCH COUNCIL REPORTS.

  (a) * * *

           *       *       *       *       *       *       *

  (e) Extensions and Enhancements of Authority.--
          (1) In general.--Not later than 6 months after the 
        date of enactment of the Creating Jobs Through Small 
        Business Innovation 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 Creating Jobs Through Small Business Innovation 
        Act of 2011, and every 4 years thereafter--
                  (A) continue the most recent study under this 
                section relating to the issues described in 
                subparagraphs (A), (B), (C), and (E) of 
                subsection (a)(1);
                  (B) conduct a comprehensive study of how the 
                STTR program has stimulated technological 
                innovation and technology transfer, including--
                          (i) a review of the collaborations 
                        created between small businesses and 
                        research institutions, including an 
                        evaluation of the effectiveness of the 
                        program in stimulating new 
                        collaborations and any obstacles that 
                        may prevent or inhibit the creation of 
                        such collaborations;
                          (ii) an evaluation of the 
                        effectiveness of the program at 
                        transferring technology and 
                        capabilities developed through Federal 
                        funding;
                          (iii) an evaluation of the program's 
                        success at commercializing technologies 
                        compared with other Federal technology 
                        transfer programs and the SBIR program;
                          (iv) to the extent practicable, an 
                        evaluation of the economic benefits 
                        achieved by the STTR program, including 
                        the economic rate of return;
                          (v) an analysis of how Federal 
                        agencies are using small businesses 
                        that have completed Phase II under the 
                        STTR program to fulfill their 
                        procurement needs; and
                          (vi) an analysis of whether the 
                        existing STTR allocation has impacted 
                        the effectiveness of the program in 
                        achieving its goals;
                  (C) make recommendations with respect to the 
                issues described in subparagraph (A), (D), and 
                (E) of subsection (a)(2) and subparagraph (B) 
                of this paragraph; and
                  (D) 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 
        that 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--
                  (A) not later than 4 years after the date of 
                enactment of the Creating Jobs Through Small 
                Business Innovation 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 and the 
                Committee on Science, Space, and Technology of 
                the House of Representatives, a report 
                regarding the study conducted under paragraph 
                (1) and containing the recommendations 
                described in paragraph (1); and
                  (B) not later than 2 years after the date of 
                enactment of the Creating Jobs Through Small 
                Business Innovation Act of 2011, 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 and the Committee 
                on Science, Space, and Technology of the House 
                of Representatives, a report of preliminary 
                findings and recommendations regarding the 
                study conducted under paragraph (1)(B).

                          XX. Additional Views

                              ----------                              


         ADDITIONAL VIEWS OF REPRESENTATIVES JOHNSON AND WILSON

    We are pleased to support H.R. 1425, the Creating Jobs 
Through Small Business Innovation Act of 2011. Small businesses 
are key players in fueling technological innovation and 
creating jobs in the United States. We can help to ensure a 
vibrant small business community in this country by enacting a 
comprehensive reauthorization of the SBIR and STTR programs.
    However, we are very troubled that the legislation does not 
include a formal outreach provision and extremely disappointed 
that our efforts to address this omission were blocked. We 
believe that innovation can come from anywhere and that all 
small businesses are capable of developing innovative new 
technologies. Our chances of getting game-changing innovation 
are significantly increased if the SBIR applicant pool is 
larger and more diverse. For this reason, a formal outreach 
program focused on bringing additional qualified small 
businesses into the SBIR program is appropriate. Such a program 
should target small businesses owned by veterans and small 
businesses located in rural areas and areas suffering from high 
unemployment, as well as small businesses owned by women and 
minorities.
    One of the four stated congressional objectives of the SBIR 
program is to encourage greater participation by women-and 
minority-owned small businesses. Unfortunately, in its 2008 
evaluation of the SBIR program, the National Research Council 
found that the program was not meeting this objective. Despite 
this, Democratic attempts at both the subcommittee and Full 
Committee markups to provide agencies with a formal mechanism 
for carrying out outreach and technical assistance activities 
and to supply them with the required resources to do so were 
blocked.
    Majority objections to an outreach program were initially 
linked to cost. However, a cost-neutral proposal was also 
rejected over unfounded concerns that it created a mandate. A 
plain reading of the cost-neutral proposal demonstrates that it 
did not require all SBIR agencies to fund outreach and 
technical assistance activities. Only the agencies that chose 
to participate in the pilot program under Section 310 would 
have been required to set aside a small percentage of funding 
for targeted outreach activities. Moreover, a reasonable waiver 
clause was included for cases where an exemption from the 
requirement would be necessary and appropriate. That being 
said, making any initiative entirely elective--as proposed by 
some of our Majority colleagues at the markup--will simply not 
address the participation challenges facing the SBIR program 
and is not acceptable.
    We will have shirked our responsibilities to the SBIR 
program and previous congressional intent if we continue to 
ignore this issue and fail to include a meaningful provision in 
the bill to ensure that outreach to underrepresented small 
businesses is occurring. It is our sincere hope that this issue 
will be adequately addressed as this legislation moves forward.

                                   Eddie Bernice Johnson.
                                   Frederica Wilson.


 XXI: PROCEEDINGS OF THE MARKUP BY THE SUBCOMMITTEE ON TECHNOLOGY AND 
                   INNOVATION'S MARKUP ON H.R. 1425, 
      CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011

                              ----------                              


                       WEDNESDAY, April 13, 2011

                  House of Representatives,
         Subcommittee on Technology and Innovation,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 10:09 a.m., in 
Room 2318 of the Rayburn House Office Building, Hon. Benjamin 
Quayle [Chairman of the Subcommittee] presiding.
    Chairman Quayle. Good morning. The Subcommittee on 
Technology and Innovation of the Committee on Science, Space, 
and Technology will come to order.
    Pursuant to notice, the Subcommittee on Technology and 
Innovation meets to consider the following measure: H.R. 1425, 
the Creating Jobs through Small Business Innovation Act of 
2011. We will now proceed with the markup beginning with 
opening statements, and I will begin.
    Today our Subcommittee will consider H.R. 1425, the 
Creating Jobs through Small Business Innovation Act of 2011. 
This bill was introduced on April 7th and referred to our 
Subcommittee. H.R. 1425 authorizes the Small Business 
Innovation Research and the Small Business Technology Transfer 
programs through fiscal year 2014.
    These programs play a vital role in expanding innovation, 
and increasing the role of small business in federal research 
and development. They have also helped thousands of small 
businesses create and sustain jobs, and commercialize their 
products.
    While the SBIR and STTR programs have been effective, there 
are areas where they can be improved. I will summarize a few of 
the major changes proposed in H.R. 1425. First, the legislation 
increases the award amounts in both the SBIR and STTR programs 
for phase I and phase II to $150,000 and $1 million, 
respectively. The legislation also provides for the award size 
to be annually indexed to inflation moving forward.
    Second, the legislation enables majority venture capital-
backed firms to compete for a limited percentage of SBIR 
awards. Up until a 2005 administrative ruling, small businesses 
with majority backing by venture capital were eligible to 
participate in SBIR. The legislation we are considering today 
would set a ceiling on the amount of funds that each agency may 
award to companies with substantial venture capital backing. 
Allowing these firms to compete for a percentage of awards will 
continue to provide agencies with the flexibility of making 
awards to the most competitive companies, regardless of their 
venture capital relationship, while preserving the majority of 
awards for small businesses without substantial venture capital 
involvement.
    Third, the program continues to emphasize the importance of 
commercializing technologies by creating commercialization 
pilot programs and providing increased use of funds for 
technology assistance. The SBIR and STTR programs must continue 
to evolve to help companies overcome the ``Valley of Death'' 
between basic research and commercialization.
    Most importantly, the legislation requires rigorous 
evaluation of the programs to ensure that we are getting the 
greatest return on our taxpayer investment. Currently, our 
ability to conduct effective evaluations is hampered by 
insufficient data collection and a lack of common measurement 
criteria among participating federal agencies. The legislation 
before us today would strengthen SBIR and STTR data collection 
requirements and evaluations, both at the individual agencies 
and within the management of the entire program at the Small 
Business Administration. This is particularly necessary in 
today's budget environment.
    I am pleased that Ranking Member Wu has chosen to be an 
original cosponsor of this legislation, and recognize that he 
has championed these programs over the years. We both agree 
that the lack of a substantive reauthorization creates 
uncertainty for many small businesses across the nation, and 
may have the effect of limiting some innovations these programs 
could otherwise support. I would also like to acknowledge and 
thank Chairman Hall and Ranking Member Johnson for joining us 
as original cosponsors of this legislation. I strongly urge my 
colleagues to support H.R. 1425.
    [The statement of Mr. Quayle follows:]
             Prepared Statement of Chairman Benjamin Quayle
    Today our subcommittee will consider H.R. 1425, the Creating Jobs 
Through Small Business Innovation Act of 2011. This bill was introduced 
on April 7 and referred to our Subcommittee. H.R. 1425 authorizes the 
Small Business Innovation Research (SBIR) and the Small Business 
Technology Transfer (STTR) programs through fiscal year 2014.
    These programs play a vital role in expanding innovation, and 
increasing the role of small business in the federal research and 
development. They have also helped thousands of small businesses create 
and sustain jobs, and commercialize their products.
    While the SBIR and STTR programs have been effective, there are 
areas where they can be improved. I will summarize a few of the major 
changes proposed in H.R. 1425: First, the legislation increases the 
award amounts in both the SBIR and STTR programs for Phase I and Phase 
II to $150,000 and $1 million, respectively. The legislation also 
provides for the award size to be annually indexed to inflation moving 
forward.
    Second, the legislation enables majority venture capital backed 
firms to compete for a limited percentage of SBIR awards. Up until a 
2005 administrative ruling, small businesses with majority-backing by 
venture capital were eligible to participate in SBIR. The legislation 
we are considering today would set a ceiling on the amount of funds 
that each agency may award to companies with substantial venture 
capital backing.
    Allowing these firms to compete for a percentage of awards will 
continue to provide agencies with the flexibility of making awards to 
the most competitive companies, regardless of their venture capital 
relationship, while preserving the majority of awards for small 
businesses without substantial venture capital involvement.
    Third, the program continues to emphasize the importance of 
commercializing technologies by creating commercialization pilot 
programs and providing increased use of funds for technology 
assistance. The SBIR and STTR programs must continue to evolve to help 
companies overcome the "Valley of Death" between basic research and 
commercialization.
    Most importantly, the legislation requires rigorous evaluation of 
the programs to ensure that we are getting the greatest return on our 
taxpayer investment. Currently, our ability to conduct effective 
evaluations is hampered by insufficient data collection and a lack of 
common measurement criteria among participating federal agencies. The 
legislation before us today would strengthen SBIR and STTR data 
collection requirements and evaluations, both at the individual 
agencies and within the management of the entire program at the Small 
Business Administration. This is particularly necessary in today's 
budget environment.

    Ranking Member Wu. I now recognize the gentleman from 
Oregon for his opening statement.
    Mr. Wu. Thank you, Chairman Quayle. I have looked forward 
to this day. I think that by coming out of the chute fast on 
this bill that we will get this bill passed and it is 
important. It will be the first jobs legislation out of this 
Congress. It is important because small businesses are the most 
important component of jobs creation as well as creating an 
innovation-based economy, and I want to recognize your 
leadership in putting this bill together and Mr. Hall, the 
Chairman of the Full Committee, for his contribution in putting 
this legislation together.
    We have passed this legislation through the last two 
Congresses, and each time we have come close to getting the 
legislation done, but last time it came right down to the last 
day of the lame-duck session. This time, I think that coming 
out first and early means that we will get the legislation 
done.
    Small businesses are crucial to the economic growth of our 
Nation and our ability to create new jobs. In fact, according 
to the Small Business Administration, small businesses have 
created 64 percent of the net new jobs over the last 15 years. 
The SBIR and STTR programs are the largest source of federal 
support for technologic innovation in the private sector. These 
programs are instrumental in spurring innovation by small 
businesses in this country and helping them to create jobs.
    As our hearing last month also highlighted, small 
businesses also fill a crucial role in meeting federal 
technologic needs, particularly in the national security 
sector. The SBIR and STTR programs tap into the unique 
capabilities of small businesses to develop cost-effective and 
technologic solutions quickly and efficiently.
    The bill we are marking up today is a good bill. The 
bipartisan bill that we moved through the Committee and passed 
through the House last Congress serves as a good template for 
this bill. Also, the bill builds upon some of the very good 
work that was done in the Senate at the end of the last 
session.
    The message is clear: After more than 3 years of working on 
a comprehensive reauthorization, we have finally reached a 
place where there is nearly universal support for reauthorizing 
these very important programs and at long last bicameral, 
bipartisan agreement on the best way to go about doing that.
    Of course, there are certainly ways that this bill could be 
strengthened and improved, and I am confident that it will be 
as it makes its way through this Committee, through the Small 
Business Committee and to the House Floor.
    But I would urge against us spending months more and even 
years more tinkering around the edges, allowing the perfect to 
be the enemy of the good and continuing to let these important 
programs languish. The time has come to get this good bill over 
the finish line.
    This bill incorporates the key priorities that were 
included in the previous House bill. It allows venture capital-
backed small businesses to once again apply for awards and 
specifically defines their eligibility requirements. It 
increases award sizes for phase I and phase II awards. It 
provides more flexibility to the program to ensure that it 
continues to meet the ever-changing needs of the high-tech 
sector. It ensures better data collection, allowing for 
improved oversight and evaluation. It streamlines paperwork 
requirements and reduces bureaucratic red tape, things that all 
of us support, and it expands commercialization efforts to help 
ensure that the taxpayers get the biggest bang for their buck.
    Thank you, Chairman Quayle, for working with me on this 
bill. It has been a pleasure working with you, and I commend 
you for your leadership for this good piece of legislation, and 
I also want to thank the chairman of the Full Committee, Mr. 
Hall, for his good work on this legislation as well as Ranking 
Member Eddie Bernice Johnson for her work on this legislation.
    Thank you, Mr. Chairman.
    [The statement of Mr. Wu follows:]
                Prepared Statement of Ranking Member Wu
    Thank you, Chairman Quayle. And thank you for holding this 
subcommittee markup today.
    I could not be more pleased that we are meeting today to mark up 
the Creating Jobs Though Small Business Innovation Act of 2011, which 
will reauthorize the SBIR and STTR programs. I am also pleased to join 
you as an original sponsor of the bill.
    Small businesses are arguably the most important component of our 
innovation-based economy. Countless new technologies--which have 
transformed the way that we live and work--were born and bred in small 
businesses throughout this country. And small businesses are critical 
to economic growth in this country and our ability to create new jobs. 
In fact, according to the Small Business Administration, small 
businesses have generated 64 percent of the net new jobs over the last 
15 years.
    The SBIR and STTR programs are the largest source of federal 
support for technological innovation in the private sector. These 
programs are instrumental in spurring innovation by small businesses in 
this country and helping them to create jobs.
    As our hearing last month also highlighted, small businesses also 
fill a critical role in meeting federal technology needs, particularly 
in the national security sector. The SBIR and STTR programs tap into 
the unique capabilities of small businesses to develop cost-effective 
technological solutions quickly and efficiently.
    The bill we are marking up today is a good bill. The bipartisan 
bill that we moved through the Committee and passed through the House 
last Congress serves as a good template for this bill. Also, the bill 
builds upon some of the very good work that was done in the Senate at 
the end of last year.
    The message is clear. After more than 3 years of working on a 
comprehensive reauthorization bill, we have finally reached a place 
where there is nearly universal support for reauthorizing these 
important programs and - at long last - bicameral, bipartisan agreement 
on the best way to go about doing that.
    Of course, there are certainly ways that this bill could be 
strengthened and improved and I am confident that it will be as it 
makes its way through this Committee, through the Small Business 
Committee, and to the House floor.
    But I would urge against us spending months more--and even years 
more--tinkering around the edges, allowing the perfect to be the enemy 
of the good and continuing to let these important programs languish. 
The time has come to get this good bill over the finish line.
    The bill incorporates the key priorities that were included in the 
previous House bill:
    It allows venture capital-backed small businesses to once again 
apply for awards and specifically defines their eligibility 
requirements;
    It increases award sizes for Phase I and Phase II awards;
    It provides more flexibility to the program to ensure that it 
continues to meet the ever-changing needs of the high-tech sector;
    It ensures better data collection, allowing for improved oversight 
and evaluation;
    It streamlines paperwork requirements and reduces bureaucratic red 
tape, things that all of us support; and
    It expands commercialization efforts to help ensure that the 
taxpayers get the biggest bang for their buck.
    Thank you, Chairman Quayle, for working with me on this bill. It 
has been a pleasure working with you and I commend you for this good 
piece of bipartisan legislation.

    Chairman Quayle. Thank you, Mr. Wu.
    Without objection, all Member opening statements will be 
placed into the record at this point.
    We will now proceed with the markup. Without objection, I 
ask unanimous consent that the bill is considered as read and 
open to amendment at any point and that the Members proceed 
with the amendments in the order of the roster. So ordered.
    Chairman Quayle. Are there any amendments to the bill?
    Mr. Wu. Mr. Chairman, I have an amendment at the desk.
    Chairman Quayle. The first amendment is offered by the 
gentleman from Oregon. Are you ready to proceed with your 
amendment?
    Mr. Wu. Yes, I am.
    Chairman Quayle. The clerk will report the amendment.
    The Clerk. Amendment number 006, amendment to H.R. 1425, 
offered by Mr. Wu of Oregon.
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    The gentleman is recognized for 5 minutes to explain the 
amendment.
    Mr. Wu. Thank you very much, Mr. Chairman.
    The last comprehensive reauthorization for the SBIR program 
expired in September of 2008. The current legislation 
authorizes a reauthorization period of 5 years, and--I am 
sorry--reauthorizes the legislation for 2 years, and this 
amendment reauthorizes the bill for a total of 5 years. I 
believe that those who are applying for SBIR grants would 
appreciate some stability in the program for a longer period of 
time and also the longer period of time permits the National 
Research Council evaluation program to be completed in the 4-
year period after enactment. Providing for a 5-year 
reauthorization will allow us to take that evaluation into 
consideration before we begin the reauthorization for the next 
cycle.
    I recognize that this legislation makes significant changes 
and there is nothing preventing us from revisiting these issues 
in the interim. We do not need an expired reauthorization to 
legislate, and I believe that the reauthorization is really 
quite short. The Senate started with a much longer 
reauthorization period, and I do believe that ultimately we 
will settle on an appropriate period somewhere in the 5-, 6- or 
7-year range, and I believe that moving toward that number will 
be a significant sign to the other chamber that we are ready to 
meet them close to halfway so that we can expedite the process 
of moving this legislation through conference and to 
legislation that can pass both chambers and that the President 
can sign, and
    I do urge adoption of this amendment.
    Chairman Quayle. I thank the ranking member for his 
amendment and appreciate his desire to provide a longer 
authorization for the program. However, I believe that the 3-
year authorization currently provided in H.R. 1425 is 
appropriate.
    The bill before us makes significant changes to the 
programs including provisions modifying the participation of 
companies backed by venture capital, awards sizes and data 
collection. Additionally, during the time of the authorization, 
the National Research Council and Government Accountability 
Office are scheduled to complete a number of ongoing studies 
which will help inform the next reauthorization measure. I 
believe it is Congress's responsibility to take another look at 
this program after 3 years, and that 5 years is too long of a 
time for it to continue without Congress considering 
adjustments. Additionally, I am hopeful that our economic 
situation will be improved in 3 years' time and that also may 
inform updates to the programs that are prudent prior to 2016.
    For these reasons, I must oppose the ranking member's 
amendment.
    Mr. Wu. If the chairman would yield just for a very brief 
comment?
    Chairman Quayle. I yield.
    Mr. Wu. Thank you very much, Mr. Chairman. I just want to 
point out again that the NRC study will take 4 years to be 
completed, and I do believe that taking the results of that 
study into account will be important to our further 
consideration of a reauthorization.
    I yield back to the chairman.
    Chairman Quayle. Duly noted, and I want to thank the member 
for the amendment.
    Is there further discussion on the amendment? If no, the 
vote occurs on the amendment. All those in favor--
    Mr. Wu. Whoa, whoa--I am sorry. Go ahead.
    Chairman Quayle. All in favor, say aye. Those opposed, say 
no. The nays have it and the amendment is not agreed to.
    Mr. Wu. Mr. Chairman, I just want to note that given the 
number of folks who are here today, I am not going to call for 
a recorded vote today. I can also count in the Full Committee, 
but I just want to let the Chairman know that I am likely to 
offer this amendment and call for a vote at the Full Committee.
    Chairman Quayle. Thank you, Mr. Wu.
    Mr. Wu. Thank you.
    Chairman Quayle. Are there any other amendments to the 
bill?
    Mr. Lipinski. Mr. Chairman.
    Chairman Quayle. For what purpose does the gentleman seek 
recognition?
    Mr. Lipinski. I have an amendment at the desk.
    Chairman Quayle. The next amendment is offered by the 
gentleman from Illinois, Mr. Lipinski. Are you ready to proceed 
with your amendment?
    Mr. Lipinski. Yes, I am.
    Chairman Quayle. The clerk will report the amendment.
    The Clerk. Amendment number 015, amendment to H.R. 1425 
offered by Mr. Lipinski of Illinois.
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    Mr. Lipinski is now recognized for 5 minutes to discuss his 
amendment.
    Mr. Lipinski. Thank you, Chairman Quayle. I would like to 
thank you and Ranking Member Wu for your work in conjunction 
with Chairman Hall and Ranking Member Johnson to quickly move 
this critical bill forward.
    I have been a strong supporter of the SBIR and STTR 
programs since I have been in Congress and I am excited at the 
prospect of doing away with temporary extensions and finally 
reauthorizing these programs and that is why I am proud to be a 
cosponsor of this bill.
    Since its inception in 1982, the SBIR program has created 
jobs by making sure our Nation's small businesses help the 
federal research agencies accomplish their missions. But in 
spite of these programs, American innovations don't always 
translate into American jobs. Too many of our breakthroughs 
ultimately turn into products manufactured abroad in countries 
like Japan and China. My amendment would help reverse this 
trend and create American manufacturing jobs.
    The bill before us makes permanent the successful 
commercialization pilot program at the Department of Defense 
and authorizes other agencies to follow DOD's lead by 
establishing commercialization pilot programs of their own. My 
amendment would improve the bill by requiring civilian agencies 
when making awards in the pilot program to consider whether a 
technology is likely to be manufactured in the United States. 
This will help make sure that the taxpayer dollars we invest in 
R&D ultimately produce American jobs.
    I urge my colleagues to support this amendment. I think 
this is a commonsense approach. We should be focusing not just 
on job creation; we should be focusing on American job 
creation. There is so much that has been done, so much research 
that has been done, so much technology that has been developed 
here in the United States. It is important that we do 
everything we can to make the next step and help ensure that 
these jobs are done in America, the jobs that come out of this 
technology.
    So I urge my colleagues to support this amendment, and I 
yield back the balance of my time.
    Chairman Quayle. Thank you, Mr. Lipinski.
    I have some reservations about the ability of an agency to 
measure the likelihood of whether the technology supported by 
the commercialization pilot program would be manufactured in 
the United States. That being said, I agree with the gentleman 
from Illinois that the SBIR and STTR programs should be 
promoting job growth within the United States, and I support 
the amendment. I want to thank you for the amendment.
    Is there any further discussion on the amendment?
    Mr. Wu. Mr. Chairman.
    Chairman Quayle. The gentleman from Oregon.
    Mr. Wu. I thank the chairman and I thank the gentleman from 
Illinois for this good amendment. I do believe that a very 
important goal of this legislation is to create jobs in the 
United States and I think that this amendment will move in that 
direction, and I thank the gentleman and yield back.
    Chairman Quayle. Thank you. The chair recognizes Mrs. 
Biggert.
    Mrs. Biggert. Thank you, Mr. Chairman. I just have a 
question of the sponsor.
    In looking at this, I understand that you want to have the 
manufacturing done in the United States, but what does it mean 
to consider? What happens if it is not? And in many case where 
we have a product, you know, it is where we bring in parts from 
other countries to put into the product. How does that work? Is 
there a penalty if you don't have everything made in the United 
States?
    Mr. Lipinski. Would the gentlelady yield?
    Mrs. Biggert. I yield to the gentleman.
    Mr. Lipinski. No, that is an important point. There is no 
way to guarantee that it is going to be made in the United 
States. This is just saying when the award is made that 
consideration has to be given to the expectation of whether 
this will be made in the United States, but there is nothing 
whatsoever in here that says there is a penalty if it is not 
made in the United States. We cannot be certain of that. No one 
who is judging the submission for an award would be able to 
know for sure, and there is no way to go back and--
    Mrs. Biggert. Reclaiming my time. Does it mean then that 
maybe an award would be made to someone who is going to 
manufacture in the United States over someone else who is going 
to use other products from foreign countries? Will that be a 
priority?
    Mr. Lipinski. Well, the intention is to make a priority the 
awards going to someone someplace that is expected to--there is 
a greater expectation that it will create jobs in the United 
States rather than jobs elsewhere. So yes, the purpose of it is 
to help create American jobs but there are no guarantees and 
there is not a way in this amendment to penalize, but I 
certainly think that we should be doing what we can--these are 
federal dollars. We should be doing what we can to encourage 
and do the best that we can to be creating American jobs from 
this.
    Mrs. Biggert. Reclaiming my time. Then do you think that 
sometimes we will give awards to someone who probably doesn't 
have as good a product as somebody else who is using some 
foreign companies?
    Mr. Wu. Will the gentlelady yield?
    Mrs. Biggert. Yes.
    Mr. Wu. Let me give the gentlelady a potential example of 
how this might work, how this might work. A study was done at 
Carnegie Mellon University, I believe the underlying technology 
was optical chips, and what the principal investigator found 
was that the folks with really cutting-edge technology had an 
option of manufacturing those chips either in the United States 
close to the source of the research or they could try to 
manufacture in China, and actually found that the manufacturing 
of these chips in China was not only unsuccessful but was 
deleterious to the domestic prior generation optical chip 
technology here in the United States. I don't know if I made 
myself clear, but that is perhaps the simplest way to describe 
what she found, what this professor found.
    In that instance, there were several competing companies to 
manufacture this cutting-edge optical chip technology, and 
under those conditions, I think that, again, hypothetically, if 
they had applied for SBIR funding, that there might be an 
inclination to make awards to those companies which were 
inclined to do their manufacturing in the United States, and I 
think that is appropriate not only to create American jobs but 
also to keep that very important industry in the United States.
    Granted, this is hypothetical but this is a research paper 
which is in the literature and which we can invite her to come 
talk to the Science Committee at any time, but I think it is a 
very important example of keeping jobs and technology, cutting-
edge technology, and very important jobs here in the United 
States, and I yield back to the gentlelady.
    Mrs. Biggert. Thank you. Reclaiming my time. And I thank 
both gentlemen. I just wanted to make sure when we go back and 
look at the legislative intent that it is not black and white 
saying that you have to go to those that are manufactured in 
the United States. Of course we want to have that but I think 
sometimes there is a product that we might want to have 
developed, and I yield back.
    Chairman Quayle. Is there further discussion on the 
amendment? If no, the vote occurs on the amendment. All those 
in favor, say aye. Those opposed, say ``no.'' The ayes have it 
and the amendment is agreed to.
    I now recognize myself to offer the next amendment. I have 
an amendment at the desk, amendment number 007. The clerk will 
report the amendment.
    The Clerk. Amendment number 007, amendment to H.R. 1425 
offered by Mr. Quayle of Arizona.
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    I recognize myself for 5 minutes to explain the amendment.
    The bill before us today strives to shorten the length of 
time it takes for an agency to makes final decisions on SBIR or 
STTR awards. For many small businesses, waiting months on end 
to determine if they will receive an award makes budgeting and 
prioritization difficult. The bill sets new requirements for 
agencies to make a final decision within 90 days after a 
solicitation is closed. While I support the goal of section 206 
to assist small businesses anxious to find out the fate of 
their proposal, I also recognize the rigorous peer review that 
some agencies subject these proposals to and respect that this 
process may take longer than the 90 days provided by the new 
shortened period for final decisions on proposals.
    My amendment would permit agencies that typically require a 
period longer than 90 days to complete their internal peer-
review requirements, in this case, the National Institutes of 
Health and the National Science Foundation, to maintain these 
systems. The amendment would allow them to exceed the 90 days' 
limitations because I believe it is most important to have a 
complete and rigorous review of each application. For these 
agencies to comply with the 90-day timeline, they would have to 
overhaul their peer-review process. I believe diluting the NIH 
and NSF peer-review processes would call into question the 
quality of awards in the SBIR and STTR programs as compared to 
the other programs these agencies support through their 
extramural research budgets. In order to avoid this unintended 
consequence, my amendment would maintain current peer-review 
processes for SBIR and STTR awards at NIH and NSF.
    Is there any further discussion on the amendment? Yes, the 
chair recognizes Mr. Wu.
    Mr. Wu. Thank you very much, Mr. Chairman, and I believe 
that your amendment is a very, very good amendment. As I was 
reviewing the legislation as it came back in its draft form in 
this Congress, I became very concerned about the requirement, a 
hard-edge requirement that this process move forward within 90 
days. I certainly believe in shortening up the cycle time. We 
have heard that from awardees and especially applicants 
repeatedly, so I am not standing up for foot dragging, and we 
do need to speed up the process. However, every single agency 
has made it clear that they make awards on a merit basis, and I 
don't think that the legislation should force that process 
forward any faster than the agencies think that they can do it, 
and I have a very deep concern about the other agencies other 
than the ones that are already listed in here and also NIH and 
NSF. So I hope that as we move this legislation forward from 
this Subcommittee to the Full Committee and especially in that 
part of the process because I think we will have more 
opportunity to change this requirement in the Science 
Committee, I hope that we will further review how hard edge 
this 90-day requirement is and if it is appropriate to permit 
adjustment of that period, either in the legislation or in the 
regulations that the agencies work under, and I want to commend 
the chairman for what I believe to be a very good amendment 
here, and I yield back.
    Chairman Quayle. Thank you, Mr. Wu.
    Is there further discussion on the amendment? If no, the 
vote occurs on the amendment. All those in favor, say aye. 
Those opposed, say no. The ayes have it and the amendment is 
agreed to.
    Are there any other amendments to the bill?
    Ms. Wilson. Mr. Chairman, I have an amendment at the desk.
    Chairman Quayle. The next amendment is offered by the 
gentlelady from Florida, Ms. Wilson. Are you ready to proceed 
with your amendment?
    Ms. Wilson. Yes, I am.
    Chairman Quayle. The clerk will report the amendment.
    The Clerk. Amendment number 006, amendment to H.R. 1425, 
offered by Ms. Wilson of Florida.
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    The gentlelady is recognized for 5 minutes to explain the 
amendment.
    Ms. Wilson. Thank you, Chairman Quayle.
    Today I am offering a simple amendment. I am offering an 
amendment that was non-controversial in the last Congress when 
it was included in the bipartisan authorization of the Small 
Business Innovation and Research and Small Business Technology 
Transfer programs that passed out of the Full Committee by a 
voice vote and then passed the House by an overwhelming margin 
of 386 to 41.
    My amendment authorizes $10 million for fiscal years 2012 
to 2014 for an outreach program at the Small Business 
Administration to attract small businesses owned and controlled 
by women and mathematics into the SBIR and the STTR programs. 
It is 8 pages of identical text word for word other than last 
year's authorized that was included in last year's House 
Resolution 2965.
    One of the stated objectives of the SBIR program is to 
foster the participation of women- and minority-owned 
businesses in technological innovation. Unfortunately, a 2008 
assessment of the program by the National Research Council 
showed that federal agencies involved in the SBIR have not been 
successful in meeting this goal. One example is the National 
Science Foundation, which the number of women-owned businesses 
receiving awards has remained flat. The results when analyzing 
minority-owned firms receiving SBIR funds is even more 
troubling. Awards have stagnated across every agency, and at 
the Department of Defense, the number actually declined 
substantially over time, falling under 10 percent in 2004 and 
getting progressively worse every year.
    My amendment addresses those concerns. It helps the Small 
Business Innovative Research program in meeting its objective. 
Furthermore, it also calls on federal agencies to reach out to 
small businesses from geographic areas that have historically 
not been involved in the program as well as those from areas 
that are suffering from high unemployment rates. It also 
provides for outreach to those businesses that are owned and 
controlled by service disabled veterans who are disabled while 
serving. Our veterans need our support, especially those that 
are disabled.
    Small businesses serve a vital role in our economy. They 
are innovative and more often than that the principal source of 
new jobs. You never know where the next big new idea will come 
from, and we must do all that we can to support the innovative 
potential of all of our small businesses.
    I urge you to support this amendment. I thank you, Mr. 
Chair.
    Chairman Quayle. Thank you, Ms. Wilson. The chair agrees 
with the gentlelady from Florida that we should encourage broad 
participation in the SBIR and STTR programs. However, I believe 
it is an inappropriate time to authorize a $10 million 
expenditure for the grant program created by this amendment.
    One of the strengths of H.R. 1425 is that it is revenue 
neutral. Funding for the SBIR and STTR programs come from a 
set-aside of preexisting agency research and development 
budgets. By authorizing this program, the Committee would be 
adding cost to this bill. Given our current budget situation, 
we feel it is extremely important to prevent growth in 
government expenditures. My understanding is that the gentleman 
from New Mexico, Mr. Lujan, will be offering an amendment which 
also encourages greater participation by underrepresented 
businesses without adding to the overall cost of the bill. I 
will be supporting that amendment. However, I recommend 
opposing the amendment we are currently considering, and I urge 
my colleagues to oppose it as well.
    Is there any further discussion on that amendment?
    Mr. Wu. Mr. Chairman.
    Chairman Quayle. The chair recognizes Mr. Wu.
    Mr. Wu. Thank you, Mr. Chairman, and I urge adoption of 
this very sound amendment.
    It is a very important goal of the SBIR program in the 
underlying statute to foster participation by a broader range 
of applicants because you don't know where the next great idea 
will be coming from, and the National Research Council in its 
study and recommendations found that the agencies participating 
in SBIR should take additional steps to increase the rates of 
women- and minority-owned firms and specifically recommended 
additional outreach efforts to achieve this goal.
    So I recommend adoption of the gentlelady's amendment and 
yield back, Mr. Chairman.
    Chairman Quayle. Is there further discussion on this 
amendment?
    Ms. Wilson. If the chair will yield for a brief comment?
    Chairman Quayle. Yes, the chair yields.
    Ms. Wilson. Mr. Chair, I come from a district where this 
amendment would help create so many jobs. The $10 million would 
be miniscule within a year. I intend to also propose this 
amendment with the Full Committee, and I am hoping that by that 
time we will be sensitive to this population that we are trying 
to deal with to expand the opportunities.
    We talk about jobs, jobs, jobs. We came to Washington to 
create jobs. This is the way we create jobs. This is how we 
reduce the deficit, by creating jobs. I ask that you support 
the amendment when it comes up again since there is some 
reticence now. Thank you.
    Chairman Quayle. I thank you, Ms. Wilson. I do want to 
point out that this is $10 million a year, so it is $30 
million, and I do support what I believe Mr. Lujan will be 
providing in an amendment, which is a revenue-neutral bill that 
will actually do the same thing without actually increasing our 
cost, so that is why I support that and not this because I 
think it will be much more efficient to get this through the 
House when you have a revenue-neutral bill like it is right 
now.
    Mr. Wu. Mr. Chairman, whoever is controlling the time, if 
someone could yield me just a couple seconds here?
    Chairman Quayle. The chair recognizes Mr. Wu for a couple 
seconds.
    Mr. Wu. Thank you very much, Mr. Chairman. Perhaps the 
gentlelady from Florida could work with the chairman and the 
chairman of the Full Committee so that between now and the Full 
Committee markup, her amendment could be restructured in a way 
so that it is revenue-neutral, and I realize that the 
gentlelady might prefer to go a different way but this is a 
very important objective and I believe that what the chairman 
may be indicating that if this amendment could be structured in 
a revenue-neutral way that it would receive very serious 
attention at the Full Committee level.
    Chairman Quayle. I don't know if I am saying that. I do 
think that what Mr. Lujan is proposing to offer is probably the 
best way to go about it to try to get underrepresented 
businesses involved in the SBIR program.
    Is there further discussion on the amendment?
    Mr. Lujan. Mr. Chairman.
    Chairman Quayle. Yes, the chair recognizes Mr. Lujan.
    Mr. Lujan. Mr. Chairman, while I fully appreciate what 
sounds like support for amendment 014, any time that we can 
have a conversation about allocating resources to be able to 
further reach out to minority-owned businesses, veteran-owned 
businesses, women-owned businesses, I think that is something 
that is worth having a serious conversation about and truly 
seeing how we may be able to work with Ms. Wilson by the time 
that we get to Full Committee. I do support her amendment as 
well, but just seeing what we might be able to further that 
along. I appreciate that. Thank you, Mr. Chairman.
    Chairman Quayle. Thank you. If no further discussion on the 
amendment, the vote occurs. All in favor, say aye. Those 
opposed, say no. The nays have it and the amendment is not 
agreed to.
    Ms. Wilson. I would like to have a recorded vote.
    Chairman Quayle. The clerk will call the roll.
    The Clerk. Chairman Quayle?
    Chairman Quayle. No.
    The Clerk. Chairman Quayle votes no.
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith votes no.
    Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Neugebauer?
    Mr. Neugebauer. No.
    The Clerk. Mr. Neugebauer votes no.
    Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Fleischmann?
    [No response.]
    The Clerk. Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell notes no.
    Mr. Hultgren?
    Mr. Hultgren. No.
    The Clerk. Mr. Hultgren votes no.
    Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Hall?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Yes.
    The Clerk. Mr. Wu votes aye.
    Mr. Sarbanes?
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Lipinski?
    Mr. Lipinski. Aye.
    The Clerk. Mr. Lipinski votes aye.
    Ms. Giffords?
    [No response.]
    The Clerk. Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Ms. Johnson?
    [No response.]
    Chairman Quayle. Are there other members who wish to vote?
    The Clerk. Mr. Hall is not recorded.
    Chairman Quayle. The chair recognizes Mr. Hall.
    Chairman Hall. No.
    The Clerk. Mr. Hall votes aye--Mr. Hall votes no. Mr. Hall 
votes no.
    Chairman Quayle. Are there members who wish to change their 
vote? The clerk shall report the vote.
    The Clerk. Mr. Chairman, four members vote aye and nine 
members vote no.
    Chairman Quayle. On this vote, there were four ayes and 
nine no's. The amendment is not agreed to.


    Are there any other amendments to the bill?
    Mr. Lipinski. Mr. Chairman.
    Chairman Quayle. For what purpose does the gentleman seek 
recognition?
    Mr. Lipinski. I have an amendment at the desk.
    Chairman Quayle. The next amendment is offered by the 
gentleman from Illinois, Mr. Lipinski. Are you ready to proceed 
with your amendment?
    Mr. Lipinski. Yes, I am, Mr. Chairman.
    Chairman Quayle. The clerk will report the amendment.
    The Clerk. Amendment number 016, amendment to H.R. 1425, 
offered by Mr. Lipinski of Illinois.
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    The chair now recognizes Mr. Lipinski to discuss his 
amendment.
    Mr. Lipinski. Thank you, Chairman Quayle. I will be very 
quick.
    Section 307 of this bill already authorizes the National 
Academy of Sciences to continue evaluating the SBIR and STTR 
programs. Among other things, this study will look at the 
number of jobs created by these programs. My amendment is very 
simple. It adds after the words ``number of jobs created,'' it 
adds ``in the United States'' making clear that Congress wants 
the academies to look at the creation of American jobs. While I 
would hope they would do this anyway, my clarification would 
make sure that Congress gets the information we need out of the 
study.
    I urge my colleagues to support the amendment and yield 
back the balance of my time.
    Chairman Quayle. Thank you, Mr. Lipinski. The chair agrees 
with the gentleman from Illinois that this is important for the 
National Academies to estimate the number of jobs created in 
the United States. I thank the gentleman for his recommendation 
and I support this amendment.
    Is there further discussion on the amendment?
    Mr. Wu. Mr. Chairman.
    Chairman Quayle. The chair recognizes Mr. Wu.
    Mr. Wu. I urge adoption of the amendment, and yield back 
the balance of my time.
    Chairman Quayle. Is there further discussion on the 
amendment? If no, the vote occurs on the amendment. All in 
favor, say aye. Those opposed, say no. The ayes have it and the 
amendment is agreed to.
    Are there any other amendments to the bill?
    Mr. Lujan. Mr. Chairman.
    Chairman Quayle. For what purpose does the gentleman seek 
recognition?
    Mr. Lujan. I have an amendment at the desk.
    Chairman Quayle. The clerk will report the amendment.
    The Clerk. Amendment number 015, amendment to H.R. 1425, 
offered by Mr. Lujan of New Mexico.
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    The gentleman is recognized for 5 minutes to explain his 
amendment.
    Mr. Lujan. Thank you, Mr. Chairman.
    This amendment would authorize a review of the STTR 
program, the Small Business Technology Transfer program, by the 
National Research Council similar to the study that they did 
for the SBIR program. Such a review is long overdue. The most 
recent examination of the STTR program was a 2001 GAO report 
which was used from a 2001 reauthorization of the program. 
However, this report was based off of one or two phase II 
projects from 1995 to 1997, the first 3 years that such awards 
were made. So the past 14 years of STTR awards experience is 
left unexamined and unreviewed.
    Under this amendment, the initial study, which is to be 
submitted to Congress 2 years after enactment, will evaluate 
the partnerships created between small businesses and research 
institutions, the effectiveness of the programs of transfering 
technology and capabilities from research institutions to small 
businesses, the degree of success at commercializing 
technologies developed in the program compared to similar 
technology transfer programs and the economic benefits achieved 
by the program. The study will also provide recommendations on 
the effects that an increase or decrease in the set-aside 
percentage for the STTR program would have and possible 
improvements to the program. They would not be recommending 
whether there be an increase or decrease, just what they 
believe the effects would be.
    It is imperative that a study of this program be performed 
as part of our constitutional oversight responsibilities, so I 
urge adoption of this amendment. I yield back.
    Chairman Quayle. I thank the gentleman from New Mexico for 
his interest in evaluating the STTR program. I agree that we 
need to learn more about the effectiveness of the STTR program 
in promoting technology transfer. I also agree that it is 
important to evaluate the effectiveness of the partnerships 
created between small businesses and research institutions 
including our Nation's colleges and universities.
    While I support greater evaluation of this program, I am 
concerned about the effects of commissioning the NRC to conduct 
an entirely separate study when the bill already provides for 
continued regular evaluations of the largest programs across 
the Federal Government. In the time that we had to review the 
amendment, I am uncertain whether it may incur unnecessary cost 
and use of resources.
    As you know, H.R. 1425 commissions the NRC to continue its 
comprehensive evaluation of the SBIR program. It also asks the 
NRC to evaluate some features of the STTR program. However, I 
agree that we need more information to effectively evaluate a 
program that disburses over $200 million of our tax dollars 
each year. My sense is that this study can be incorporated 
within the currently scheduled SBIR study. To that end, would 
the gentleman consider withdrawing his amendment, recognizing 
that the chair hopes that we can work together at Full 
Committee to include a provision requiring a comprehensive 
evaluation of the STTR program? And I yield to the gentleman.
    Mr. Lujan. Mr. Chairman, I would be willing to withdraw the 
amendment if we could work together on coming up with some 
language that we can agree on. Thank you.
    Chairman Quayle. I thank the gentleman from New Mexico, and 
we will work together on that language.
    Are there any other amendments to the bill?
    Mr. Lujan. Mr. Chairman.
    Chairman Quayle. The gentleman from New Mexico.
    Mr. Lujan. I have an amendment at the desk.
    Chairman Quayle. The clerk will report the amendment.
    The Clerk. Amendment number 014, amendment to H.R. 1425, 
offered by Mr. Lujan of New Mexico.
    [The amendment follows:]
    Chairman Quayle. I ask unanimous consent to dispense with 
the reading. Without objection, so ordered.
    The chair now recognizes the gentleman from New Mexico for 
5 minutes to discuss his amendment.
    Mr. Lujan. Thank you, Mr. Chairman.
    My amendment today adds a section to the bill that would 
require agencies to encourage applications from small 
businesses located in underrepresented areas or areas with 
excessive unemployment rates as well as small businesses owned 
and controlled by veterans, women and minorities.
    Now more than ever, as our country begins its recovery from 
the recession, we must support minority- and women-owned 
businesses. According to the United States Census Bureau, 
minority-owned businesses generate $1 trillion in economic 
output to the U.S. economy and create 5.9 million jobs, and 
these numbers are only predicted to grow. Women-owned firms 
represent almost 29 percent of businesses in the United States. 
In my home State of New Mexico, minority-owned businesses 
represent over 30 percent of the businesses in the state.
    Mr. Chairman, the numbers prove that these businesses are 
an essential part of our economy and will continue to 
experience increased growth. Minority- and women-owned 
businesses have the potential to lift our most rural and 
underrepresented areas from poverty, and I am offering this 
amendment today to ensure that these important STTR and SBIR 
program opportunities are accessible and available to them.
    As our men and women return home from serving our country, 
it is critical that we provide them with the best possible 
opportunities to succeed professionally here at home. We must 
reach out to our veterans and help equip them with the 
technical assistance they need to develop and grow their 
businesses. Supporting veteran-, minority- and women-owned 
businesses is good for our economy and good for our Nation.
    And Mr. Chairman, we just learned that sadly for the first 
time in many years, the percentage of minority-owned firms has 
declined substantially in cooperation with DOD, and this is 
something that truly we have to figure out how to turn on 
again.
    I encourage my colleagues to vote for the amendment today. 
I thank you, Mr. Chairman. I yield back my time.
    Chairman Quayle. I thank the gentleman from New Mexico for 
his amendment.
    The amendment would require federal agencies to encourage 
SBIR and STTR applications from companies which historically 
have been underrepresented in SBIR and STTR awards. I believe 
that the competitive nature of the program is maintained under 
this amendment and that it aligns with the overall goals of the 
programs, and I urge my colleagues to vote aye on the 
amendment.
    Is there any other discussion on the amendment? If no, the 
vote occurs on the amendment. All in favor, say aye. Those 
opposed, say no. The ayes have it and the amendment is agreed 
to.
    Are there any other amendments to the bill? Appearing none, 
the vote occurs on the bill as amended. All those in favor, say 
aye. All those opposed, say no. The ayes have it.
    I will now recognize Ms. Biggert to offer a motion.
    Mrs. Biggert. Mr. Chairman, I move that the Subcommittee 
favorably report H.R. 1425 as amended to the Full Committee. 
Furthermore, I move that staff be instructed to prepare the 
Subcommittee report and make necessary technical and conforming 
change to the bill as amended in accordance with the 
recommendations of the Subcommittee.
    Chairman Quayle. The question is on the motion to report 
the bill favorably. Those in favor of the motion will signify 
by saying aye. Opposed, no. The ayes appear to have it and the 
resolution is favorably reported.
    Without objection, the motion to reconsider is laid upon 
the table. I move that members have 2 subsequent calendar days 
in which to submit supplemental minority or additional views on 
the measure. Without objection, so ordered.
    This concludes our Subcommittee markup. The chair declares 
the Subcommittee adjourned.
    [Whereupon, at 10:57 a.m., the Subcommittee was adjourned.]
                               Appendix:

                              ----------                              


        H.R. 1425, Section-by-Section Analysis, Amendment Roster






                     Section-by-Section Analysis of
 H.R. 1425, CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011

Section By Section Description

        Title 1--Reaouthorization of the SBIR and STTR Programs

Sec. 101. Extension Length

    This section extends the SBIR and STTR programs for 3 years until 
September 30, 2014.

Sec. 102. SBIR and STTR Award Levels

    This section increases the size of SBIR and STTR awards from 
$100,000 to $150,000 for Phase I and from $750,000 to $1 million for 
Phase II, and requires the SBA to make annual adjustments of the award 
sizes for inflation. The provision prohibits any agency from issuing an 
SBIR or STTR award if the size of the award exceeds the award 
guidelines established in this section by more than 50 percent. 
Finally, the provision requires federal agencies to maintain 
information on awards exceeding the award guidelines; including the 
award amount; a justification for exceeding the guidelines; the 
identity and location of the recipient; and whether or not the 
recipient firm has received venture capital, hedge fund, or private 
equity firm investment, and if so, whether or not it is majority owned 
and controlled by one or more venture capital companies, hedge funds, 
or private equity firms. Nothing shall prevent a Federal agency from 
supplementing an award under the SBIR or STTR programs with Federal 
funds that are outside of the SBIR and STTR allocations.

Sec. 103. Agency and Program Flexibility

    The section allows SBIR and STTR applicants to receive awards for 
subsequent SBIR or STTR phases at another agency and also allows small 
business concerns which received SBIR or STTR awards to receive awards 
for subsequent phases in either the STTR or SBIR program, respectively.

Sec. 104. Elimination of Phase II Invitations

    This section requires that federal agencies conduct their 
solicitation of Phase II SBIR and STTR proposals without any 
invitation, pre-screening, pre-selection, or down-selection process 
between the first and second phase.

Sec. 105. Phase Flexibility

    This section grants agencies the ability to provide a Phase II 
Award if the Agency finds that the small business concern has already 
completed the work typically done during Phase I.

Sec. 106 and Sec. 107. Participation by Firms with Substantial 
                    Investment from Multiple Venture Capital Operating 
                    Companies in a Portion of the SBIR Program

    Section 106 allows the Departments of Health of Human Services and 
Energy and the National Science Foundation to permit firms majority 
owned and controlled by one or more venture capital companies, one or 
more hedge funds, or one or more private equity firms to compete for up 
to 45 percent of the agency's SBIR funds. All other qualifying federal 
agencies shall allow majority owned private investment backed small 
businesses to compete for up to 35 percent of the agency's SBIR funds. 
Sec. 107 defines what affiliations are between various outside 
investors (such as venture capital companies, private equity firms, 
etc.) and small business concerns for purposes of determining whether 
the combination is eligible for an award under the SBIR program.

Sec. 108. SBIR and STTR Special Acquisition Preference

    This section codifies the language from the SBIR and STTR Policy 
Directives confirming the intent of Congress to establish a special 
acquisition preference for SBIR and STTR Phase III awards. The 
provision clarifies that preference for contracts concerning research 
developed with SBIR or STTR funds should go to the developers and 
holders of SBIR and STTR technologies to the greatest extent 
practicable.

Sec. 109. Collaborating with Federal Laboratories and Research and 
                    Development Centers

    This section reduces the burden on cooperation between SBIR/STTR 
firms and federal laboratories by ensuring that such subcontracting is 
generally permitted without the requirement for a waiver. The provision 
also ensures that subcontracting to federal laboratories is not 
required of SBIR or STTR awardees. Finally, it clarifies that firms 
that have entered into a cooperative agreement with a federal 
laboratory are eligible to receive SBIR/STTR awards.

Sec. 110. Notice Requirement

    This section ensures that the SBA is notified any time the SBIR or 
STTR policy directives are challenged in court.

Sec. 111. Additional SBIR and STTR Awards

    The section allows SBIR and STTR applicants to receive one 
sequential Phase II award for a single project. It also requires 
agencies to verify that any activity to be performed with respect to a 
project with a Phase I and Phase II award has not been funded from 
another Federal agency.

          Title II--Commercialization and Outreach Initiatives

Sec. 201. Technical assistance for awardees

    This section increases the amount of discretionary technical 
assistance that SBIR and STTR agencies can contract out to provide to 
awardees from $4,000 to $5,000 for Phase I awards and from $4,000 to 
$5,000 per year for Phase II awards. The provision also states that 
this amount shall be in addition to the amount of the recipient's 
award. It also requires agencies to provide SBIR and STTR award winners 
who wish to procure their own technical assistance with the allowable 
amount. Finally, the provision prohibits the agencies from using these 
funds to pay its contractor for technical assistance for a given SBIR 
or STTR award unless the contractor provides the technical assistance 
to that awardee.

Sec. 202. Commercialization Readiness Program at Department of Defense

    This section extends the SBIR Commercialization Pilot Program (CPP) 
at the Department of Defense permanently and extends it to the 
department's STTR program. It also changed the name to the 
Commercialization Readiness Program. The provision authorizes the 
Secretary of Defense to establish goals for transitioning Phase I and 
Phase II technologies in subcontracting plans for contracts of $100 
million or more. The provision also requires the Secretary of Defense 
to set a goal to increase the number of Phase II contracts that lead to 
technology transition into programs of record or fielded systems and to 
use incentives to encourage agency program managers and prime 
contractors to meet that goal. Finally, the provision includes 
reporting requirements on the status of projects funded through CRP.

Sec. 203. Commercialization Readiness Pilot Program for Civilian 
                    Agencies

    This section authorizes agencies other than the Department of 
Defense to create Commercialization Readiness Pilot Programs (using no 
more than 10% of their program authorization) to support advanced 
development of small business technologies which are facing high 
manufacturing or regulatory costs. The provision authorizes these 
agencies to grant post-Phase II awards up to two times the regular size 
(up to $3 million). Authority of establish such a pilot program expires 
at the end of FY2014.

Sec. 204. Interagency Policy Committee

    This section directs the Office of Science and Technology Policy to 
establish an SBIR/STTR Interagency Policy Committee to review and make 
policy recommendations on ways to improve the effectiveness and 
efficiency of the SBIR and STTR programs.

Sec. 205 Clarifying Definition of Phase III

    This section revises the definition of ``Phase Three'' of the SBIR 
program so that it is clear that such work shall be directed toward 
commercial applications and derives from research and development 
completed in earlier phases.

Sec. 206. Shortened Period for Final Decisions on Proposals and 
                    Applications

    This section requires that not later than 90 days after, and if the 
Administrator authorizes an extension, then not later than 180 days, 
from the date on which the solicitation closes for SBIR and STTR 
programs, that the Administrator make a decision on each proposal 
submitted. It also allows the Director of NIH to make an award under 
the SBIR or STTR programs when an application for award undergoes a 
technical and scientific peer review.

                  Title III--Oversight and Evaluation

Sec. 301. Streamlining Annual Evaluation Requirements

    This section requires the Administration to report to Congress at 
least annually the number of proposals received from firms with venture 
capital, private equity, or hedge fund investment, including those 
owned and controlled by multiple venture capital, private equity, or 
hedge fund firms. It also requires the Administration to report on 
efforts to increase outreach to firms owned and controlled by women and 
socially or economically disadvantaged individuals, the implementation 
and compliance with the allocation of funds for firms majority owned 
and controlled by multiple venture capital, private equity or hedge 
fund companies, and appeals of Phase III awards and notices of 
noncompliance with the SBIR and the STTR Policy Directives. Finally, 
the section requires the Administration to coordinate the 
implementation of electronic databases at the participating agencies.

Sec. 302. Data Collection From Agencies for SBIR

    This section requires agencies with an SBIR program to collect data 
annually on whether or not an applicant or awardee has venture capital, 
private equity or hedge fund investment, if it is majority owned and 
controlled by multiple venture capital, private equity, or hedge fund 
firms, the amount of that outside capital it has received at the time 
of award, if it has foreign investors and who they are, if it is owned 
by a woman, if it is owned by a socially or economically disadvantaged 
individual, and if it has a university affiliation. The provision also 
requires agencies to justify awards given that exceed the statuary 
guidelines. Agencies must collect data and report annually on whether 
or not the award winner is from a state receiving less federal research 
funding for small businesses than a majority of other states.

Sec. 303. Data Collection From Agencies for STTR

    This section requires agencies with an STTR program to collect data 
annually on whether or not an applicant or awardee has venture capital, 
private equity or hedge fund investment, if it is majority owned and 
controlled by multiple venture capital, private equity, or hedge fund 
firms, the amount of that outside capital it has received at the time 
of award, if it has foreign investors and who they are, if it is owned 
by a woman, if it is owned by a if it is owned by a socially or 
economically disadvantaged individual, and if it has a university 
affiliation. The provision also requires agencies to justify awards 
given that exceed the statutory guidelines.

Sec. 304. Public Database

    This section requires that the public database maintained by the 
Administrator include information on whether or not a firm receiving an 
award has venture capital, private equity or hedge fund investment, if 
it is majority owned and controlled by multiple venture capital, 
private equity, or hedge fund firms, the amount of that outside capital 
it has received at the time of award, is owned by a woman, is owned by 
a if it is owned by a socially or economically disadvantaged 
individual, or has a university affiliation.

Sec. 305. Government Database

    This section requires that the government database maintained by 
the Administrator in coordination with the agencies for the purposes of 
evaluation of the SBIR and STTR programs include information on the 
ownership structure and affiliations of awardee firms that have venture 
capital, private equity, or hedge fund investment, and that are 
majority owned and controlled by multiple venture capital, private 
equity, or hedge fund firms whether or not a firm is owned by a woman, 
is owned by a minority, or has a university affiliation.

Sec. 306. Accuracy in Funding Base Calculations

    This section requires the Comptroller General of the United States 
to conduct an audit of the SBIR and STTR programs to determine whether 
federal agencies are complying with the expenditure requirements.

Sec. 307. Continued Evaluation by the National Academy of Sciences

    This section authorizes the National Academy of Sciences to 
continue its evaluation of the SBIR program through the end of fiscal 
year 2021 and requires that updates of the studies be provided to 
Congress every four years from the date of enactment.

Sec. 308. Technology Insertion Reporting Requirements

    This section requires the Administration to include in its annual 
report to Congress information on Phase III awards issued by SBIR and 
STTR agencies, including the dollar amount of these awards, their 
recipients, and the name of component or agency issuing them.

Sec. 309. Obtaining Consent from SBIR and STTR Applicants to Release 
                    Contact Information to Economic Development 
                    Organizations

    This section requires each Federal agency that conducts an SBIR or 
STTR program to enable small business concerns that are SBIR or STTR 
applicants to indicate whether that Federal agency has consent to 
identify the small business concern to local and State-level economic 
development organizations.

Sec. 310. Pilot to Allow Funding for Administrative, Oversight, and 
                    Contract Processing Costs

    This section requires that the Administrator allow each Federal 
agency to not use more than 3 percent of the funds allocated to the 
SBIR programs for the first fiscal year beginning after the enactment 
of this subsection, and each year thereafter through fiscal 2014, for 
costs relating to administrative, oversight and contract processing 
activities for SBIR programs that the Federal agency was not carrying 
out the last full fiscal year before the enactment of this subsection, 
as well as for the period of 3 years after the enactment of this 
subsection, for the implementation of commercialization and outreach 
initiatives that were not in effect on the date of the enactment of 
this subsection.

Sec. 311. GAO Study with Respect to Outside Investment Involvement

    This section requires that not later than 2 years after the date of 
the enactment of this Act, and every 2 years thereafter, the 
Comptroller General of the United States conduct a study on the impact 
of requirements relating to venture capital operating company, private 
equity firm, and hedge fund involvement in the SBIR and STTR programs.

Sec. 312. Reducing Vulnerability of SBIR and STTR Programs to Fraud, 
                    Waste, and Abuse

    This section requires the Administrator to, not later than 90 days 
after the enactment of this Act, amend the SBIR Policy Directive and 
the STTR Policy Directive to include measures to prevent fraud, waste, 
and abuse. Critical provisions include:

        (1)  Establishing dedicated administrative funds to be used by 
        participating SBIR/STTR programs for targeted reviews of award 
        recipients that could be at high risk for waste, fraud and 
        abuse;

        (2)  Requiring Inspectors General of participating SBIR/STTR 
        federal agencies to establish fraud detection measures, 
        coordinate fraud-related information sharing between agencies, 
        and provide fraud prevention-related education and training to 
        agencies administering the program;

        (3)  Requiring the Small Business Administrator to amend the 
        SBIR and STTR Policy Directives to include specific measures to 
        prevent waste, fraud and abuse;

        (4)  Creating a special SBIR/STTR telephone hotline that allows 
        individuals to report waste, fraud and abuse;

        (5)  Ordering the Government Accountability Office to conduct a 
        study assessing the SBIR/STTR programs' vulnerabilities to 
        waste, fraud and abuse; and

        (6)  Strengthening the Small Business Administration's existing 
        Tech-Net Database by requiring SBIR and STTR applicants to 
        submit additional information that will help reduce 
        "duplicative funding."

Sec. 313. Simplified Paperwork Requirements

    This section directs the SBA Administrator to issue regulations or 
guidelines to (the extent possible) standardize SBIR and STTR 
application paperwork.

                      Title IV--Policy Directives

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

    This section requires conforming amendments to the SBA's SBIR and 
STTR Policy Directives within 180 days to implement the provisions of 
this Act. It also requires that the Administration publish the SBIR and 
STTR Policy Directives in the Code of Federal Regulations within 180 
days.

                       Title V--Other Provisions

Sec. 501. Report on SBIR and STTR Program Goals

    This provision directs each federal agency required to participate 
in an SBIR or STTR program to: (1) develop metrics in conjunction with 
the Interagency Policy Committee described in Sec. 204 to evaluate the 
effectiveness and benefit of such program; (2) conduct an annual 
evaluation of their program using such metrics; and (3) report 
evaluation results annually to the Administrator and the relevant 
Congressional Committees.

Sec. 502. Competitive Selection Procedures for SBIR and STTR Programs

    This section requires all SBIR or STTR funds to be awarded pursuant 
to competitive and merit-based selection procedures.

Sec. 503. SBA Regulations on Loan Restrictions

    This section requires the SBA to develop regulations solely for 
purposes of the SBIR program that when or how restrictive covenants in 
loan agreements would constitute control for purposes of affiliation.






                                   


 XXII: PROCEEDINGS OF THE FULL COMMITTEE MARKUP ON H.R. 1425, CREATING 
           JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011

                              ----------                              


                         WEDNESDAY, MAY 4, 2011

                  House of Representatives,
               Committee on Science, Space, and Technology,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 10:04 a.m., in Room 
2318 of the Rayburn House Office Building, Hon. Ralph M. Hall 
[Chairman of the Committee] presiding.
    Chairman Hall. Good morning to everyone. The Committee on 
Science, Space, and Technology will come to order. Pursuant to 
notice, the Committee on Science, Space, and Technology meets 
today to consider the following measure: H.R. 1425, the 
Creating Jobs Through Small Business Innovation Act of 2011.
    And before we proceed with the markup I would like to have 
a little homework done here. I would like to designate the vice 
chair for each of the subcommittees. Rule 1, Subsection F of 
the committee rules provides that the committee chair designate 
a majority member of each subcommittee to serve as vice chair 
of each subcommittee. Pursuant to the rules I am pleased to 
designate the Honorable Lamar Smith of Texas as the vice chair 
of the Subcommittee on Space and Aeronautics, the Honorable 
Dana Rohrabacher as the vice chair of the Subcommittee on 
Energy and Environment, the Honorable Judy Biggert as the sub 
chair on the Committee of Technology and Innovation, the 
Honorable Roscoe Bartlett as the vice chair of the Subcommittee 
on Research and Science Education, and the Honorable Sandy 
Adams as the vice chair of the Subcommittee on Investigations 
and Oversight. I thank each of them in advance for their 
service. Rosters reflecting these designations are in the 
drawers in front of you.
    And now we will proceed with the markup, again, with 
opening statements, and I will begin.
    Today we are going to commit--we are going to consider H.R. 
1425, the Creating Jobs Through Small Business Innovation Act 
of 2011. This bill was introduced on April the 7th and was 
marked up by the Technology and Innovation Subcommittee April 
the 13th. H.R. 1425 authorizes the Small Business Innovation 
Research, SBIR, and the Small Business Technology Transfer, 
STTR, Programs through fiscal year 2014.
    These programs play a vital role in expanding innovation 
and increasing the role of small businesses and federal 
research and development. Innovation developed through SBIR and 
STTR grants have in some cases led to rapid expansion resulting 
in many new jobs for our Nation. I am sure that most of you are 
familiar with companies like Qualcomm and Sonicare. These 
companies are no longer small, but at one point in time they 
were tiny, and they started to grow thanks in part to the SBIR 
Program.
    The legislation before us is a compromise and a 
comprehensive reauthorization of both programs. The bill will 
increase award amounts to both the SBIR and STTR Programs for 
phase I and phase II to $150,000 and $1 million respectively, 
enable small businesses that are majority venture capital 
backed to compete for a limited percentage of SBIR awards and 
continue to emphasize the importance of commercializing 
technologies.
    For the first time the bill would provide agencies 
flexibility to use up to three percent of their program funds 
toward activities relating to outreach, technical assistance, 
commercializations, program oversight, and quality control.
    The legislation before us today would also strengthen SBIR 
and STTR data collection requirements and evaluation 
measurement criteria. This would improve our ability to conduct 
effective evaluations of the programs and ensure that we are 
getting the greatest return on our taxpayer investment.
    I believe Chairman Broun may also submit an amendment today 
to improve the detections of fraud, waste, and the abuse in 
these various programs, and I commend him for working to 
include these provisions.
    I would also like to thank Chairman Quayle for his 
leadership on this legislation and for shepherding it through 
the subcommittee. I would also like to recognize Ranking Member 
Johnson and Wu, both members, for being original cosponsors of 
this legislation.
    I strongly urge my colleagues to support H.R. 1425.
    [The prepared statement of Mr. Hall follows:]
              Prepared Statement of Chairman Ralph M. Hall
    Today our Committee will consider H.R. 1425, the Creating Jobs 
Through Small Business Innovation Act of 2011. This bill was introduced 
on April 7th and was marked up by the Technology and Innovation 
Subcommittee on April 13th.
    H.R. 1425 authorizes the Small Business Innovation Research (SBIR) 
and the Small Business Technology Transfer (STTR) programs through 
fiscal year 2014.
    These programs play a vital role in expanding innovation, and 
increasing the role of small businesses in federal research and 
development. Innovations developed through SBIR and STTR grants have in 
some cases led to rapid expansion, resulting in many new jobs for our 
nation. I am sure that most of you are familiar with companies like 
Qualcomm and Sonicare. These companies are no longer small, but at one 
point in time, they were tiny, and they started to grow thanks in part 
to the SBIR program.
    The legislation before us is a comprehensive reauthorization of 
both programs. The bill would increase award amounts in both the SBIR 
and STTR programs for Phase I and Phase II to $150,000 and $1 million, 
respectively; enable small businesses that are majority venture capital 
backed to compete for a limited percentage of SBIR awards; and continue 
to emphasize the importance of commercializing technologies.
    For the first time, the bill would provide agencies flexibility to 
use up to three percent of their program funds toward activities 
related to outreach, technical assistance, commercialization, program 
oversight and quality control.
    The legislation before us today would also strengthen SBIR and STTR 
data collection requirements and evaluation measurement criteria. This 
would improve our ability to conduct effective evaluations of the 
programs, and ensure that we are getting the greatest return on our 
taxpayer investment. I believe Chairman Broun may also submit an 
amendment today to improve the detection of waste, fraud, and abuse in 
these programs, and I commend him for working to include these 
provisions.
    I would like to thank Chairman Quayle for his leadership on this 
legislation and for shepherding it through the subcommittee.
    I would also like to recognize Ranking Members Johnson and Wu for 
being original cosponsors of this legislation.
    I strongly urge my colleagues to support H.R. 1425, and I now 
recognize the gentlelady from Texas for an opening statement.

    Chairman Hall. And I now recognize the gentlelady from 
Texas for an opening statement. Mrs. Johnson.
    Ms. Johnson. Thank you very much, Mr. Chairman. Today we 
are marking up H.R. 1425, the Creating Jobs Through Small 
Business Innovation Act of 2011. I am pleased to join you, Mr. 
Hall, as an original cosponsor of this important legislation 
and to reauthorize SBIR and the STTR Programs.
    I would like to thank Mr. Wu for his work on this bill. No 
one in Congress is more committed to SBIR and STTR Programs 
than Mr. Wu. His tireless efforts to support--in support of 
these programs and in getting this reauthorization bill enacted 
is to be admired and respected, and I want to thank you for all 
that you have done to get us to this point, Mr. Wu.
    Mr. Chairman, this is a good piece of legislation, and I am 
confident that the bill we have before us today is a better 
bill because it benefited from the bipartisan input in its 
development. We all recognize the important role that small 
businesses play in fueling technological innovation and 
creating jobs in the United States.
    That being the case, we should be doing what we can to 
foster a vibrant small business community and give our small 
businesses the tools that they need to succeed. The SBIR and 
STTR Programs are such tools. They have been critically 
important programs for fostering innovation by small 
businesses.
    As we continue our efforts to keep our economy on the path 
to recovery, it is more important than ever that we recommit 
ourselves to these programs and get a comprehensive 
reauthorization bill enacted.
    As I have noted, I support this bill. It includes many good 
provisions that I believe are necessary and important and that 
will make the SBIR and STTR Programs more efficient and 
effective. The bill also takes great strides to modernize the 
programs, making them more responsive to the ever-changing, 
high tech sector, and the demands of the global economy.
    That being said, there is definitely room for improvement. 
For example, this bill falls short to include any formal 
outreach programs for women and minority-owned small 
businesses. This is despite the fact that increasing 
participation is one of the stated goals of the program and one 
which the National Academy's founders decided they have a mixed 
track record.
    It is irresponsible for us to ignore this issue. The bill 
should include a meaningful provision that will give the 
agencies the tools and resources they need to conduct the 
outreach and technical assistance that is necessary to meet 
this challenge.
    I will be offering an amendment along with Congresswoman 
Wilson later this morning to rectify the situation. I hope it 
will be accepted. I know that some of our colleagues have other 
good amendments to strengthen and improve the bill, and I hope 
they will be supported.
    Thank you, Mr. Chairman. Again, I look forward to working 
with you to get this bill to the House Floor as soon as 
possible, and I yield back the balance of my time.
    [The prepared statement of Ms. Johnson follows:]
       Prepared Statement of Representative Eddie Bernice Johnson
    Thank you, Chairman Hall. Today, we are marking up H.R. 1425, the 
Creating Jobs Through Small Business Innovation Act of 2011. I am 
pleased to join you, Chairman Hall, as an original cosponsor of this 
important legislation to reauthorize the SBIR and STTR programs.
    I would also like to thank Mr. Wu for his work on this bill. No one 
in Congress is more committed to the SBIR and STTR programs than Mr. 
Wu. His tireless efforts in support of these programs and in getting 
this reauthorization bill enacted is to be admired and respected. Thank 
you for all that you have done to get us to this point, Mr. Wu.
    Mr. Chairman, this is a good piece of legislation. I am confident 
that the bill we have before us today is a better bill because it 
benefited from bipartisan input in its development.
    We all recognize the important role that small businesses play in 
fueling technological innovation and creating jobs in the United 
States. That being the case, we should be doing what we can to foster a 
vibrant small business community and give our small businesses the 
tools that they need to succeed. The SBIR and STTR programs are such 
tools--they have been critically important programs for fostering 
innovation by small businesses.
    As we continue our efforts to keep our economy on the path to 
recovery, it is more important than ever that we recommit ourselves to 
these programs and get a comprehensive reauthorization bill enacted.
    As I've noted, I support this bill. It includes many good 
provisions that I believe are necessary and important, and that will 
make the SBIR and STTR programs more efficient and effective.
    The bill also takes great strides to modernize the programs, making 
them more responsive to the ever-changing high-tech sector and the 
demands of the global economy.
    That being said, there is definitely room for improvement. For 
example, this bill fails to include any formal outreach program for 
women and minority-owned small businesses. This is despite the fact 
that increasing participation is one of the stated goals of the 
program, and one for which the National Academies found a decidedly 
mixed track record.
    It is irresponsible of us to ignore this issue. The bill should 
include a meaningful provision that will give the agencies the tools 
and resources they need to conduct the outreach and technical 
assistance that is necessary to meet this challenge.
    I will be offering an amendment--along with Congresswoman Wilson--
later this morning to rectify this situation and I hope that it will be 
accepted.
    I know that some of our colleagues have other good amendments to 
strengthen and improve the bill, and I hope that they will be 
supported.
    Thank you again, Mr. Chairman. I look forward to working with you 
to get this bill to the House floor as soon as possible. And I yield 
back the balance of my time.

    Chairman Hall. Thank the gentlelady.
    Without objection all members' opening statements will be 
placed in the record at this point.
    And we will now consider the bill, H.R. 1425, The Creating 
Jobs Through Small Business Innovation Act of 2011.
    Without objection I ask unanimous consent that the bill is 
considered as read and open to amendment at any point and that 
members proceed with amendments in the order listed on the 
roster.
    And that is so ordered.
    Chairman Hall. Are there any amendments to the bill?
    Mr. Wu. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. The first amendment on the roster is offered 
by Mr. Wu. The clerk will report the amendment.
    The Clerk. Amendment number 010, amendment to H.R. 1425, 
offered by Mr. Wu of Oregon.
    Mr. Wu. I ask unanimous consent that the amendment be 
considered as read.
    Chairman Hall. Without objection.
    I ask unanimous consent to dispense with the reading.
    Without objection, I think it is so ordered, and I 
recognize the gentleman for five minutes to explain this. 
Respect to you, Mr. Wu, recognize you for five minutes at this 
time.
    Mr. Wu. Thank you very much, Mr. Chairman, and thank you 
and Chairman Quayle for your work on this legislation, and 
thank Ms. Johnson for her leadership and work on this 
legislation, and Ms. Johnson, thank you specifically for your 
very kind and generous remarks about my labor for the last five 
years on this legislation.
    And it is in the spirit of that five-year push that I offer 
my amendment to extend the authorization period from three 
years to five years. I think that some of us have been in that 
funny place in restaurants where it sometimes takes longer for 
someone to describe, for the server to describe in great detail 
the benefits or the spectacular nature of a particular dish, 
longer than it takes to actually eat the meal.
    And in this instance I have been working on a 
reauthorization for five years, and we have a three-year 
reauthorization period, which kind of makes me feel like I am 
in one of those restaurants. I think that there is a much more 
substantive reason to extend the reauthorization period and 
that is that the National Research Council report looking at 
this legislation and making recommendations on it will be due 
in four years, and a reauthorization at the five-year mark 
would permit us to take that report into consideration when we 
do the next reauthorization to that rather than, if you will, 
fly by the seat of the pants and do the reauthorization in 
three years.
    In addition, a second strong reason for pushing the 
reauthorization out by another couple of years is because of 
the need for certainty by applicants for both phase I and phase 
II awards. I also note that the Senate reauthorization period 
is currently in their bill at eight years. That is down from a 
14-year reauthorization period, which they passed in the last 
two Congresses, and they are coming down towards a reasonable 
period. In my view a reasonable five or six-year period, and we 
have gone up from the two-year period that we, that the House 
bill had in it in the last Congress, and we are currently at 
three years, and an increase for which I am grateful, and I 
think is commendable. I do think that a five-year period is a 
more useful period and one that will, indeed, in all likelihood 
be closer to what House and Senate ultimately agree to.
    And for all those reasons, Mr. Chairman, I urge adoption of 
this amendment.
    Chairman Hall. Thank you, Mr. Wu, and I thank you for the 
amendment. I think we debated this in subcommittee. I believe 
it was voted down in subcommittee, and I think the three-year 
authorization currently provided by H.R. 1425 is appropriate. 
It provides a reasonable amount of time to pass but ensures 
Congress is going to keep an eye on some of the changes we are 
considering right today.
    I would like to have the opportunity to consider how these 
languages have impacted the program three years from now 
instead of five. For these reasons I oppose Mr. Wu's amendment.
    Mr. Wu. Mr. Chairman, if you could yield to me just for one 
second.
    Chairman Hall. I would yield to the gentleman more than one 
second.
    Mr. Wu. I just want to point out that I did not ask for my 
amendment to be voted down in the subcommittee, and I was 
saving the moment for today.
    Chairman Hall. The chair recognizes that chair made his own 
observation at the subcommittee, and I think the vote was not 
there, and you showed good judgment at that time. I would like 
you to exercise that same judgment now and pull it down, but 
you don't have to if--is there further discussion?
    All right. Then the vote occurs on the amendment. All in 
favor, say aye. Those opposed, say no. It is my opinion that 
the no's have it. The amendment is not agreed to.
    Mr. Wu. Mr. Chairman, today I do ask for a recorded vote on 
this amendment.
    Chairman Hall. All right. The gentleman asks for a recorded 
vote.
    The clerk will call the roll.
    The Clerk. Chairman Hall?
    Chairman Hall. No.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    [No response.]
    The Clerk. Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith votes no.
    Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    Mr. Bartlett. No.
    The Clerk. Mr. Bartlett votes no.
    Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    [No response.]
    The Clerk. Mr. McCaul?
    [No response.]
    The Clerk. Mr. Broun?
    [No response.]
    The Clerk. Mrs. Adams?
    Mrs. Adams. No.
    The Clerk. Mrs. Adams votes no.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell votes no.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    Mr. Brooks. No.
    The Clerk. Mr. Brooks votes no.
    Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    [No response.]
    The Clerk. Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Bucshon?
    [No response.]
    The Clerk. Mr. Benishek?
    Mr. Benishek. No.
    The Clerk. Mr. Benishek votes no.
    Ms. Johnson?
    Ms. Johnson. Aye.
    The Clerk. Ms. Johnson votes aye.
    Mr. Costello?
    [No response.]
    The Clerk. Ms. Woolsey?
    [No response.]
    The Clerk. Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Aye.
    The Clerk. Mr. Wu votes aye.
    Mr. Miller?
    [No response.]
    The Clerk. Mr. Lipinski?
    [No response.]
    The Clerk. Ms. Giffords?
    [No response.]
    The Clerk. Ms. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Ms. Edwards votes aye.
    Ms. Fudge?
    [No response.]
    The Clerk. Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. Aye.
    The Clerk. Mr. McNerney votes aye.
    Mr. Sarbanes?
    [No response.]
    The Clerk. Ms. Sewell?
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Clark?
    [No response.]
    Chairman Hall. Are there others who wish to vote?
    Mr. McCaul. Yeah. Mr. Chairman. I would like to be recorded 
as a no.
    The Clerk. Mr. McCaul votes no.
    Chairman Hall. Mr. Costello.
    Mr. Costello. Mr. Chairman, I would like to be recorded as 
aye.
    The Clerk. Mr. Costello votes aye.
    Chairman Hall. All right. The clerk shall report the vote.
    The Clerk. Mr. Chairman, eight members vote aye, and 15 
members vote no.
    Chairman Hall. This amendment is not agreed to, and on this 
vote there were eight ayes, 15 nos. Amendment is not agreed to.


    Chairman Hall. You want to be recognized, Ms. Johnson?
    Ms. Johnson. Yes. Thank you, Mr. Chairman. I just simply 
want to say that a five-year authorization I thought was 
appropriate because under the bill the next phase of the 
National Research Council evaluation of the program is due in 
four years after enactment, and this ends in three years. So it 
is going to make it a little bit more difficult, but providing 
five years would allow us to take the evaluation into 
consideration when we sit down for reauthorization again.
    I just wanted to point that out. Thank you.
    Chairman Hall. We will take note of that, and we did have a 
roll call vote, so it would put your statements in their proper 
position and thank you for them.
    Are there any other amendments?
    Mr. Wu. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. For what purpose does the gentleman seek 
recognition? The next amendment is offered by the gentleman 
from Oregon, Mr. Wu. Are you ready to proceed with your 
amendment?
    Mr. Wu. Yes, sir, I am.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 011, amendment to H.R. 1425, 
offered by Mr. Wu of Oregon.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, I think it is so ordered. The gentleman 
is recognized for five minutes to explain the amendment.
    Mr. Wu. Thank you, Mr. Chairman.
    I am offering this amendment to increase award size across 
the board, and in a moment I want to enter in a discussion with 
the majority and with the chairman for the specific reason of 
or for the reason to specifically identify the National 
Institutes of Health as the one agency where it might be 
especially appropriate to have a different award size and to 
propose something that we can take between here and the House 
Floor so that we can enter into a discussion with the Senate 
later on. If we pass the award sizes as we do, it would badly 
infringe on what the NIH is currently doing.
    As drafted, my amendment raises the award level from $1 
million to $1.5 million. The reason why my amendment is so 
important for the current legislation is that whether correct 
or not, the SBA has interpreted the caps in the prior 
legislation as guidelines and not as hard caps. We made clear 
in this legislation that these are hard caps, and there is a $1 
million cap in the existing bill with a 50 percent potential 
increase to be determined by the agency.
    My amendment would take it to $1.5 million with a 50 
percent increase as interpreted by the agency. This means that 
for phase II it would, the hard cap at most would be 2.25 
million and for phase I the hard cap would be $225,000.
    Now, I feel that these are appropriate award levels for all 
the agencies, but for purposes of discussion today I am willing 
to leave that on the--I am willing to leave that behind, and I 
want to specifically identify the National Institutes of Health 
as an agency where we need to work with them on their judgment 
of what the award sizes ought to be. They have specific 
expertise in their area, health and biologics and 
pharmaceuticals, and the information, the data which I got 
within the last 24 hours is that at the phase I award level of 
$225,000, 42 percent of the awards that they are currently 
giving would exceed that amount. And if we have a hard cap in 
our bill, which we do, then 42 percent of what they are 
awarding would be eliminated and have to be brought down to the 
$225,000 level. Even at a $450,000 phase I award level, almost 
15 percent of what they are currently awarding exceeds that 
amount.
    Now, I think that these numbers, we should look further 
into these numbers between now and the time that the bill hits 
the House Floor and determine whether, as best as we can 
legislatively, for legislative information, whether the NIH is 
appropriately awarding phase I awards this high. By the way, 
they award phase II awards quite high also.
    But we should be setting a different cap level for NIH, and 
the only question is how high it should be probably different 
from other agencies. They are doing a good job of spinning off 
biologics and pharmaceuticals and other healthcare basic 
biological technologies. We don't want to inhibit that.
    The two reasons why we should consider this seriously and 
have a different number in the House bill are that we, for the 
first time we have a hard cap in this legislation. The SBA will 
not be able to interpret around us. I believe in that, but the 
second reason is that the Senate bill has the same numbers that 
we do in the current draft of our bill. We will not have a 
conferenceable issue if we have the exact same numbers.
    To be able to solve this problem in conference or before we 
have to have a different number, and Mr. Chairman, I would like 
to work with you and the majority to make sure that NIH is 
protected in its program in an appropriate way going forward, 
and that is the modified goal of my amendment. I am willing to 
work with the majority on all the other agencies living within 
the caps as currently proposed in the House and Senate bills.
    Chairman Hall. All right. The gentleman's time has expired, 
and I thank the gentleman for his amendment, and I understand 
and do really believe it is the gentleman's intent to ensure 
that the best research is funded. It is genuine. I also 
recognize that NIH has funded a number of projects that exceed 
the new caps in the legislation as he has pointed out.
    However, I think that changing the award size would have a 
negative implication for the SBIR and STTR Programs. Actually, 
the National Research Council recommended setting the phase II 
award guidelines at 1 million because this strikes the proper 
balance between providing adequate funding and ensuring broad 
participation in the program.
    I do oppose the gentleman's amendment and urge my 
colleagues to do the same. However, it is not all that bad. If 
Mr. Wu would maybe--if I could suggest that he withdraw the 
amendment and ask that we work together on this amendment 
before the Floor, I would probably agree. I am not sure because 
I am not sure the best way to go about this, whether we single 
out NIH or find another means to accommodate that agency, but I 
am willing to work on it.
    Are there others who would like to be heard or would like 
to recognize Mr. Wu for his feelings about--or do you want to 
go on and take the vote now? What would you like to do, Mr. Wu?
    Mr. Wu. Mr. Chairman, I think that the path that you have 
laid out is more than generous. I would like to withdraw the 
amendment. I have racked my brain as to the best way to do a 
carve out or some other way to handle NIH in the last 24, 36 
hours. I think we need more time and more information, and I 
look forward to working with you and all the other members of 
the committee so that we can do something appropriate, and I do 
mean appropriate for NIH.
    Chairman Hall. Actually, I thank the gentleman. I know the 
time and the work that he has put in on this, his sincerity on 
it. I think it probably can be worked out.
    The gentleman withdraws his amendment.
    Let us see. Are there other amendments?
    Mr. Tonko. Mr. Chairman.
    Chairman Hall. All right. Do you have an amendment at the 
desk?
    Mr. Tonko. Yes, Mr. Chairman. I have an amendment at the 
desk.
    Chairman Hall. The next amendment is offered by the 
gentleman from New York, Mr. Tonko. Are you ready to proceed 
with your amendment, sir?
    Mr. Tonko. I am, Mr. Chair.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 026, amendment to H.R. 1425, 
offered by Mr. Tonko of New York.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered.
    I recognize Mr. Tonko on his amendment.
    Mr. Tonko. Thank you, Mr. Chairman. Since its inception in 
1982, the SBIR Program has proven to be one of the most 
successful federal programs for technological innovation in 
United States history, delivering more than 60,000 patents and 
hundreds of valuable innovations in agriculture, defense, 
energy, health sciences, homeland security, space, 
transportation, and other fields.
    The National Research Council of the National Academies 
2007, report, an assessment of the Small Business Innovation 
Research Program states, and I quote, ``The SBIR Program is 
sound in concept and effective in practice.'' The SBIR Program 
has created a competitive entrepreneurial environment in which 
small, independently-owned businesses can compete and 
strengthen America's high-tech economy.
    While reauthorization of the SBIR Program is of the utmost 
importance, certain changes to the current SBIR Program 
contained in today's bill could in my opinion negatively affect 
several small businesses in our districts by stacking the 
competition against them with larger companies which 
historically have not been the focus of this innovative 
program.
    The first issue I am concerned with in today's bill is in 
Section 105. The current version of the bill eliminates one of 
the best tools the program has to make sure we are using the 
taxpayers' money the best way possible. Many members of this 
committee continue to express concern as to how we use federal 
funds when it comes to research and development programs. I 
share that concern.
    But the way the current bill is written we are creating a 
loophole that would, could waste time and resources for 
applicants and the agencies. Allowing applicants to skip phase 
I awards and go straight to phase II awards should be a cause 
for concern.
    In a time when both our government and private businesses 
are being forced to do more with less we should be making sure 
that the process for awards does not waste time and resources 
of the small innovator or the agencies. My amendment addresses 
this concern by striking the language that creates this 
loophole.
    A fundamental premise of the SBIR Program and the main 
reason for its success is that it has been structured to invest 
modestly to explore ideas and allow the winners to emerge. The 
phase I step with modest funding is critical to the concept, 
allowing only the strongest ideas to survive in advance. 
Jumping directly to making large awards would squeeze out many 
innovative ideas that are in need of exploration while 
concentrating on a few that may not pan out.
    Therefore, the most important issue in preserving the 
integrity of the SBIR Program is to require a phase I 
investment before jumping to phase II. Phase I of this program 
is a rigorous process involving more than one level of review 
by staff. A rigorous phase I application enables the concept to 
be properly vetted for relevancy to the SBIR Program and the 
agency. We should be encouraging this type of selection process 
and not allowing it to be simply passed by.
    This is an amendment that is simple and straightforward. It 
strikes the language that allows applicants to skip phase I, 
and I urge members of our committee to support this amendment, 
and I yield back the balance of my time.
    Chairman Hall. The gentleman yields back his time. I thank 
the gentleman for his amendment. I understand the arguments to 
both sides of this amendment and the importance to maintain the 
integrity of the program and encourage greater small business 
participation, but I hate to vote in the face of the National 
Research Council recommending against allowing companies to 
apply directly for phase II awards.
    Indeed, allowing the companies to apply directly for phase 
II awards can significantly shift the balance of both awards 
and funding from phase II to phase--from phase I to phase II. 
This might crowd out small start-up businesses that can't 
compete directly for phase II projects.
    If a company has already conducted the work equivalent to 
phase I on the other side, why should the government pay for 
this work?
    Again, I understand the arguments on both sides, but I have 
a hard time supporting this. I will be opposing the amendment 
because I believe it is important to prevent wasteful spending 
on duplicative projects and to fund the most promising research 
with the most, with the greater potential for commercialization 
and to line up with the National Research Council.
    I will oppose, and I thank the gentleman for his amendment.
    Is there further discussion on the amendment?
    All right.
    Mr. Wu. Mr. Chairman.
    Chairman Hall. Yes. Mr. Wu, recognize you for 5 minutes.
    Mr. Wu. Thank you very much, Mr. Chairman, and I want to 
recognize that Mr. Tonko has worked very hard on developing his 
expertise in this legislation and has many thoughtful 
amendments to propose today. I do reluctantly oppose this 
amendment for one of the reasons that the chairman cited, which 
was that the intent when we wrote this provision into the 
legislation was that if the private sector has already 
performed the phase I work, there is no need for the public 
sector, for the taxpayer to jump in and fund a repeat of that 
work, and it is a step to save money for the taxpayer.
    And in this regard, Mr. Chairman, I am with you in that the 
NRC is advisory to us but ultimately we draw the lines, and I 
think we need to take responsibility for that, and I thank you 
for the opportunity to speak for a moment.
    I have tremendous respect for the gentleman from New York's 
work on this legislation.
    Chairman Hall. The gentleman's time has expired, and I want 
to thank the member for the amendment.
    Is there further discussion on the amendment?
    Mr. Tonko. Mr. Chairman, if I might just ask for further 
clarification. You are citing the academy's 2007, report, and I 
believe that they recommended not skipping over phase I. They 
thought that it was a critical part of especially the vetting 
process.
    Chairman Hall. Is there other discussion?
    Okay. Hearing no further discussion the vote will occur on 
the amendment. All in favor, say aye. Those opposed, say no.
    Mr. Tonko. Mr. Chairman.
    Chairman Hall. Yes.
    Mr. Tonko. Could we have a recorded vote, please?
    Chairman Hall. The gentleman asks for a recorded vote. All 
in--recorded vote called for. Would the clerk call the roll?
    The Clerk. Chairman Hall?
    Chairman Hall. No.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    [No response.]
    The Clerk. Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith votes no.
    Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    Mr. Bartlett. No.
    The Clerk. Mr. Bartlett votes no.
    Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    [No response.]
    The Clerk. Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Broun?
    [No response.]
    The Clerk. Mrs. Adams?
    Mrs. Adams. No.
    The Clerk. Mrs. Adams votes no.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. Yes.
    The Clerk. Mr. Rigell votes aye.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    Mr. Brooks. No.
    The Clerk. Mr. Brooks votes no.
    Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    [No response.]
    The Clerk. Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Bucshon?
    [No response.]
    The Clerk. Mr. Benishek?
    Mr. Benishek. No.
    The Clerk. Mr. Benishek votes no.
    Ms. Johnson?
    Ms. Johnson. Aye.
    The Clerk. Ms. Johnson votes aye.
    Mr. Costello?
    [No response.]
    The Clerk. Ms. Woolsey?
    [No response.]
    The Clerk. Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. No.
    The Clerk. Mr. Wu votes no.
    Mr. Miller?
    [No response.]
    The Clerk. Mr. Lipinski?
    Mr. Lipinski. No.
    The Clerk. Mr. Lipinski votes no.
    Ms. Giffords?
    [No response.]
    The Clerk. Ms. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Ms. Edwards votes aye.
    Ms. Fudge?
    [No response.]
    The Clerk. Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. No.
    The Clerk. Mr. McNerney votes no.
    Mr. Sarbanes?
    Mr. Sarbanes. No.
    The Clerk. Mr. Sarbanes votes no.
    Ms. Sewell?
    Ms. Sewell. Yes.
    The Clerk. Ms. Sewell votes aye.
    Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Clark?
    Mr. Clark. Aye.
    The Clerk. Mr. Clark votes aye.
    Chairman Hall. Are there others members who wish to vote? 
Are there members who wish to change their vote?
    Mr. Costello. Mr. Chairman.
    Chairman Hall. The chair recognizes the gentleman from 
Illinois.
    Mr. Costello. Costello votes aye.
    The Clerk. Mr. Costello votes aye.
    Chairman Hall. Are there others?
    Mr. Bucshon.
    The Clerk. Mr. Bucshon is not recorded.
    Mr. Bucshon. No, ma'am.
    The Clerk. Mr. Bucshon votes no.
    Chairman Hall. All right. Are there other members who wish 
to change their vote?
    All right. The clerk will report the vote.
    The Clerk. Mr. Chairman, nine members vote aye, and 19 
members vote no.
    Chairman Hall. On this vote there were nine ayes and 19 
nos. The amendment is not agreed to.


    Chairman Hall. Are there other amendments?
    Mr. Wu. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. Our next amendment is offered from the 
gentleman from Oregon, Mr. Wu. Are you ready to proceed with 
your amendment?
    Mr. Wu. Yes, sir, I am.
    Chairman Hall. All right. The clerk will report the 
amendment.
    The Clerk. Amendment number 009, amendment to H.R. 1425, 
offered by Mr. Wu of Oregon.
    Chairman Hall. I would ask unanimous consent to dispense 
with the reading.
    Without objection, it is so ordered, and the gentleman is 
recognized for five minutes to explain his amendment.
    Mr. Wu. Thank you very much, Mr. Chairman.
    As drafted the current legislation permits one level of 
majority venture capital VAT companies to participate in the 
SBIR Program, and for three agencies, the NIH, the NSF, and 
the--I am sorry. The NIH, the NSF, and the DOE to participate 
at 45 percent for venture capital majority-owned companies.
    My amendment would add NASA as the fourth agency to be 
permitted to have majority venture capital-owned companies at 
this higher level. I believe that this is appropriate, and I 
believe that this is where NASA and the National Space 
Initiative want to go and ought to go.
    As you know, Mr. Chairman, and also the ranking member, 
NASA is winding down a significant amount of its workforce as 
we transition from one form of human spaceflight hopefully to 
another. As this wind down is occurring, at a number of NASA 
sites around the country there have been incubators created, 
and there are strong efforts, sometimes on behalf--by NASA 
frequently by state agencies to encourage small spinouts from 
NASA based on NASA technology.
    I think that we ought to encourage such efforts, not just 
as an effort to create high-wage, private sector jobs, but also 
as a way of maximizing technology and maximizing innovation and 
helping our space program achieve its objectives by permitting 
a higher level of majority venture capital-owned companies to 
participate I believe that we promote innovation, we promote 
jobs, and also it saves the taxpayers some expenses when 
venture capitalists do, if you will, some of the due diligence 
that would otherwise have to be done by public agencies. It is 
entirely appropriate that NASA is one of the lead science 
agencies of our Nation, also be included with the Department of 
Energy, NIH, and NSF so that we can take larger steps toward an 
innovation economy and also one that maximizes our 
participation in space.
    And for all those reasons, Mr. Chairman, I urge adoption of 
the amendment, and I yield back the balance of my time.
    Chairman Hall. The gentleman yields back his time, and I 
thank the ranking member of the Technology and Innovation 
Subcommittee, for his amendment. I agree that we should add 
NASA to the list of federal agencies that may provide up to 45 
percent of award funding to firms that have majority venture 
capital backing.
    This amendment has the potential, I believe, to increase 
the quality of applications NASA receives, which could lead to 
better research and development. I support the amendment and 
urge my colleagues to do the same.
    All right. Is there further discussion on the amendment?
    Ms. Edwards. Mr. Chairman.
    Chairman Hall. I recognize Mrs. Edwards, gentlelady.
    Ms. Edwards. Thank you, Mr. Chairman.
    Chairman Hall. Maryland.
    Ms. Edwards. Thank you, Mr. Chairman. I am not so much 
concerned with this amendment that it would add NASA to the 
list of agencies. I am concerned as reflected in Mr. Tonko's 
amendment, the next one that we will consider, about the 
percentage.
    And Prince George is in Montgomery County in the fourth 
Congressional district. Particularly in Montgomery County we 
are home to some of the most nimble, agile, but also small 
biotech firms, and what happens is that with the 45 percent 
award, the 45 percent level that many of those firms that are 
smaller firms, that are more nimble, that hire an awful lot of 
people, they don't really get the same kind of capacity, and I 
actually think that, you know, particularly for an agency like 
NASA to encourage the greater participation of our smaller 
businesses our women-owned businesses, our minority and 
veteran-owned businesses, that, you know, indeed, that 
threshold level at 45 percent really screens them out.
    And so my concern is not so much that, you know, that NASA 
isn't a full participant in SBIR but that the 45 percent level 
I think does great harm to some of our smaller and more nimble 
companies.
    And with that I yield.
    Chairman Hall. The gentlelady yields back her time. I would 
only say to that the percentage is a ceiling. It is not a 
floor, and I suggest you talk with the author who may have some 
concessions to make that might solve the problems that you have 
representing your district as you do very well.
    Is there further discussion to the amendment?
    All right. Hearing no further discussion, the vote occurs 
on the amendment. All in favor, say aye. Those opposed, say no. 
Those opposed say, no. The ayes have it, and the amendment is 
not agreed to.
    The Clerk. It is agreed to. The amendment is agreed to.
    Chairman Hall. I have changed my mind on that. The 
amendment is agreed to since I have been elbowed here. And, 
remember, I turned 88 years old yesterday.
    All right. Are there other amendments?
    Mr. Tonko. I have an amendment at the desk.
    Chairman Hall. All right. The next amendment is offered by 
the gentleman from New York, Mr. Tonko. Are you ready to 
proceed with your amendment?
    Mr. Tonko. I am, Mr. Chairman, and happy birthday.
    Chairman Hall. Thank you. The clerk will report the 
amendment.
    The Clerk. Amendment number 027, amendment to H.R. 1425, 
offered by Mr. Tonko of New York.
    Chairman Hall. Ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered.
    Mr. Tonko. Mr. Chairman.
    Chairman Hall. The chair recognizes the gentleman for five 
minutes to explain his amendment.
    Mr. Tonko. Thank you. My second amendment is, again, 
designed to make sure we do not drastically change the 
fundamental purpose of this program. Although I understand the 
important role of venture capital or a VC firm continues to 
play in the SBIR Program, I find it more important to retain 
the SBIR's historic and proven focus on truly small business.
    At a time when our national unemployment is near nine 
percent we should be promoting any policy we can that creates 
jobs, especially jobs that strengthen our small business 
community, the backbone of our economy and the source of 70 
percent of new jobs in our country.
    My amendment does just that. My amendment reduces the 
allocation limits for majority-owned VC companies to 25 percent 
and 15 percent respectively. This is consistent with the Senate 
language and allows the program to better target the intended 
small businesses for which this program was originally 
designed.
    VCs already see significant benefits from the SBIR Program 
in its present form because it is used as a vetting process for 
their investment decisions to reduce risk. VC investment firms 
have historically invested in 1 to three percent of all the 
businesses, business plans that they review, and those are the 
ones that you believe could produce revenue within fewer than 3 
years.
    So the SBIR Program has historically been aimed at true 
innovation, those bold plans and ideas that are just too risky 
for VC funding but are potentially game changers. It is that 
spirit and tradition that has provided the underpinnings of 
success for this program to date, and in that tradition that we 
should continue.
    By lowering the allocation levels we will enable the 
program to continue to be successful in meeting the goals that 
Congress has set out for--to be met.
    I urge members of our committee to support this amendment, 
and I yield back, Mr. Chair, the balance of my time.
    Chairman Hall. I thank the gentleman for yielding back, and 
I thank the gentleman for his amendment. And while I recognize 
the gentleman's desire to limit the amount of funding that goes 
to majority venture capital-backed firms, I believe it is more 
important to give agencies the flexibility to award funding for 
the best applications, and actually that is what this bill 
does.
    The bill enables a greater number of small businesses to 
compete for SBIR and STTR awards while ensuring that a majority 
of awards go to small businesses that don't have majority 
venture capital backing.
    For that reason I oppose the gentleman's amendment and urge 
my colleagues to do the same.
    All right. Are there other members who wish to discuss 
the----
    Mr. Quayle. Mr. Chairman.
    Chairman Hall. Yes. The chair recognizes the gentleman from 
Arizona.
    Mr. Quayle. Thank you, Mr. Chairman. I agree with you that 
I am going to oppose this amendment, and during our hearings we 
had a number of different people, definitely small businesses 
and academics who actually have voiced that the VCs actually 
play a pivotal role in actually weeding out some of the 
potential commercialized successes in the small businesses. And 
this is, as we have said before, is a ceiling and not a floor, 
and I believe that the VCs actually play--will have the better 
expertise to determine whether a company at those stages will 
be able to be successful in the future.
    And it also still does make sure that small businesses that 
are not VC backed get the majority of the funding, so I urge my 
colleagues to oppose this amendment, and I yield back the 
balance of my time.
    Chairman Hall. The gentleman yields back. Are there other 
members who wish to discuss the amendment?
    Mr. Wu. Mr. Chairman.
    Chairman Hall. Mr. Wu is recognized for five minutes.
    Mr. Wu. Thank you very much, Mr. Chairman, and I want to 
thank Chairman Quayle for his fine work, and it has been a 
pleasure to work with you on this legislation. And both for 
Chairman Quayle and Chairman Hall you are advocating a position 
that I have advocated in the past, and I want to recognize that 
and also say that when I have pushed for this, it is as an 
aspiration, because I hope that there are more venture-funded 
companies. In my view they tend to be small companies that have 
to give away more of their equity, they have to give away a 
higher percentage because they are small. And that a lot of the 
advocates before this committee have it exactly wrong when they 
are concerned that bigger businesses will be venture funded. I 
disagree. I think they are smaller businesses.
    That being said, I also want to recognize that the 
statistics strongly indicate that none of the agencies would be 
affected by the current caps of--the proposed caps of 15 
percent and 25 percent. So if we set those caps at those levels 
today, it would in essence not have affect on the applicant 
pool.
    That is one reason. The second reason is that we have 
negotiated this for five years, and it is high time to get it 
done, and I think that the caps as proposed last year at 15 and 
25 percent and as currently set in the Senate bill at 15 and 25 
percent are probably what we can get done at this point.
    And while I share with the chairman of the full chairman 
and the chairman of the subcommittee, their aspirations for 
higher participation by venture capital, I just very much want 
to get this bill done, and for those two reasons I intend to 
support the gentleman from New York's amendment to set the caps 
at 15 and 25 percent.
    I yield back the balance of my time.
    Chairman Hall. The gentleman yields back his time.
    Are there others who wish to discuss the amendment?
    All right. Hearing no further discussion, the vote occurs 
on the amendment. All in favor, say aye. All those opposed, say 
no.
    Mr. Tonko. Mr. Chairman.
    Chairman Hall. Yes.
    Mr. Tonko. I ask for a recorded vote, please.
    Chairman Hall. The gentleman asks for a recorded vote. The 
recorded vote will be held. The clerk will please call the roll 
at this time.
    The Clerk. Chairman Hall?
    Chairman Hall. No.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    [No response.]
    The Clerk. Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith votes no.
    Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    Mr. Bartlett. No.
    The Clerk. Mr. Bartlett votes no.
    Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    [No response.]
    The Clerk. Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Broun?
    Dr. Broun. No.
    The Clerk. Mr. Broun votes no.
    Mrs. Adams?
    Mrs. Adams. No.
    The Clerk. Mrs. Adams votes no.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell votes no.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    Mr. Brooks. No.
    The Clerk. Mr. Brooks votes no.
    Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    [No response.]
    The Clerk. Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Bucshon?
    Mr. Bucshon. No.
    The Clerk. Mr. Bucshon votes no.
    Mr. Benishek?
    Mr. Benishek. Yes.
    The Clerk. Mr. Benishek votes aye.
    Ms. Johnson?
    Ms. Johnson. No.
    The Clerk. Ms. Johnson votes no.
    Mr. Costello?
    Mr. Costello. Aye.
    The Clerk. Mr. Costello votes aye.
    Ms. Woolsey?
    [No response.]
    The Clerk. Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Aye.
    The Clerk. Mr. Wu votes aye.
    Mr. Miller?
    [No response.]
    The Clerk. Mr. Lipinski?
    Mr. Lipinski. Aye.
    The Clerk. Mr. Lipinski votes aye.
    Mrs. Giffords?
    [No response.]
    The Clerk. Mrs. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Mrs. Edwards votes aye.
    Mrs. Fudge?
    [No response.]
    The Clerk. Mr. Lujan?
    Mr. Lujan. No.
    The Clerk. Mr. Lujan votes no.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. No.
    The Clerk. Mr. McNerney votes no.
    Mr. Sarbanes?
    Mr. Sarbanes. Aye.
    The Clerk. Mr. Sarbanes votes aye.
    Ms. Sewell?
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. No.
    The Clerk. Ms. Wilson votes no.
    Mr. Clark?
    Mr. Clark. No.
    The Clerk. Mr. Clark votes no.
    Chairman Hall. Are there others members who wish to vote? 
Are there any members who wish to change their vote?
    Okay. The clerk shall report the vote.
    The Clerk. Mr. Chairman, seven members vote aye, and 21 
members vote no.
    Chairman Hall. All right. The amendment is not agreed to.
    
    
    Chairman Hall. Are there other amendments?
    Mr. Tonko. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. What purpose is that? You have an amendment 
at the desk. The next amendment is offered by the gentleman 
from New York, Mr. Tonko. Are you ready to proceed with your 
amendment, sir?
    Mr. Tonko. I am, sir.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 030, amendment to H.R. 1425, 
offered by Mr. Tonko of New York.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered. Recognize the 
gentleman on his amendment.
    Mr. Tonko. Thank you, Mr. Chairman.
    Section 107 as currently written, again, would make drastic 
changes to a program that at its core is an innovation program 
for small business. In its current format Section 107 would 
open the SBIR Program to businesses that are majority based by 
venture capital, hedge funds, and private equity firms with 
large holdings and employees in market share.
    This opening up of the program, which is funded by 
taxpayers, could potentially crowd out small businesses most in 
need of funding for their innovative work.
    I have a concern that the current language does not 
accurately reflect the way most companies use funding from VCs. 
We all know that one VC firm and others hardly ever make an 
investment of 50 percent or more into a single company. One 
rarely sees a single VC firm control more than a 50 percent 
stake in one company.
    However, what you will see is multiple VC firms taking 
positions of 10 to 20 percent each, which when you total them 
could equal 70, 80, or 90 percent ownership of a single 
company. Under the current language that is acceptable. I would 
argue that if the intent of this bill is to let VC-supported 
companies have access to their program but still allow the 
founders of the company to have control of their company, then 
we could, we should draft the language in a way that accurately 
defines how these types of firms work and have ownership in 
small companies.
    My amendment addresses these concerns by saying that the 
total amount of ownership of a company by VCs, hedge funds, or 
equity firms cannot go beyond 50 percent. I believe this 
amendment gives the founders of the small business more 
bargaining power against private sources of funding like VCs.
    According to my own constituents, having the current limit 
on VCs in the SBIR Program has been one of the best tools to 
keep VCs from immediately seizing more than 60 percent of that 
given company.
    I urge members of our committee to support this pro-small 
business amendment, and I yield back the balance of my time, 
Mr. Chair.
    Chairman Hall. The gentleman yields back his time, and I 
thank the gentleman for his amendment. Actually, I disagree 
with the gentleman's amendment because for one thing, it would 
prevent any majority venture capital-backed firm from competing 
for SBIR and STTR awards.
    H.R. 1425 enables majority venture capital-backed firms to 
compete for a limited percent of awards, which will increase, I 
think, the potential pool of applicants and may result in 
stronger proposals.
    I oppose the gentleman's amendment and strongly urge my 
colleagues to do the same.
    And I want to thank the member for his amendment.
    Is there further discussion of the amendment?
    All right. Hearing no further discussion, the vote occurs 
on the amendment. All in favor, say aye. Those opposed, say no. 
Apparently in my opinion the no's have it, and the amendment is 
not agreed to.
    Are there other amendments?
    Mr. Tonko. Mr. Chair, I have an amendment at the desk.
    Chairman Hall. The next amendment is offered by the 
gentleman--by the gentleman from New York, Mr. Tonko. Are you 
ready to proceed with your amendment?
    Mr. Tonko. Yes, I am, Mr. Chair.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 028, amendment to H.R. 1425, 
offered by Mr. Tonko of New York.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered. I recognize the 
gentleman on his committee----
    The Clerk. Amendment.
    Chairman Hall. --on his amendment.
    Mr. Tonko. Thank you, Mr. Chair. The purpose of this 
amendment is to protect the program from being open to foreign-
owned VC, hedge funds, and equity firms. My amendment simply 
prevents foreign-owned firms from participating in the program.
    We should be doing everything we can to encourage American 
businesses and American investments into an American bit of 
ideas and technologies. After all, we must continue to strive 
to make it in America. We should not be subsidizing foreign 
capital and outside governments to use federal resources to 
develop an idea, then run back to their company of origin to 
commercialize that product.
    With limited resources we must prioritize American 
businesses and American growth above foreign-owned companies. 
This language matches the Senate bill and makes sure that the 
program is targeted at keeping American innovation here at 
home.
    I urge members of the committee to support his amendment 
and yield back the balance of my time, Mr. Chair.
    Chairman Hall. I thank the gentleman. I have some concerns 
about the gentleman's amendment.
    First, the bill already prevents businesses with more than 
500 employees from participating in the SBIR and the STTR 
Programs. Second, the companies have to have at least 51 
percent U.S. ownership to participate in SBIR and STTR Programs 
based on existing SBA regulations.
    And finally I am concerned that the amendment would prevent 
small businesses from competing for SBIR awards if they are 
partially owned by a large business, even if the ownership 
stakes were miniscule.
    Again, I have some concerns about this amendment. Would the 
gentleman clarify his intent with the amendment?
    Mr. Tonko. Basically it is to make certain that American 
investments are given the priority here and that we do not 
allow it to go forward with the foreign investments that might 
be made from foreign-owned VC firms.
    Chairman Hall. All right. I thank the gentleman. We think 
that is already covered. I will be opposing the amendment and 
urge my colleagues to do the same.
    Are there others who wish to be recognized?
    Mr. Rigell. Mr. Chairman.
    Chairman Hall. The gentleman is recognized for five 
minutes.
    Mr. Rigell. I just have--Mr. Chairman, thank you. I just 
had a question. The point that the gentleman makes I think is 
an important one, and there seems to be some, at least lack of 
clarity on whether foreign ownership is allowed or not, and it 
would help me to make a better decision if I fully understood 
the issue. So if either, Mr. Chairman, if you could or the 
gentleman who presented the bill could either--the amendment 
could provide clarification on that, I would be much 
appreciated on that. Thank you.
    Chairman Hall. I thank Mr. Rigell. I would recognize anyone 
who wants to give further clarification on the bill.
    Hearing none, is there other--are there others to discuss 
the amendment?
    Hearing no further discussion, the vote occurs on the 
amendment. All in favor, say aye. Those opposed, say no. The 
no's have it, and the amendment is not agreed to.
    Mr. Tonko. Chairman, I request a recorded vote.
    Chairman Hall. The gentleman requests a recorded vote. The 
clerk will call the roll.
    The Clerk. Chairman Hall?
    Chairman Hall. No.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    Mr. Sensenbrenner. No.
    The Clerk. Mr. Sensenbrenner votes no.
    Mr. Smith?
    Mr. Smith. No.
    The Clerk. Mr. Smith votes no.
    Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    Mr. Bartlett. No.
    The Clerk. Mr. Bartlett votes no.
    Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    [No response.]
    The Clerk. Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Broun?
    Dr. Broun. No.
    The Clerk. Mr. Broun votes no.
    Mrs. Adams?
    Mrs. Adams. No.
    The Clerk. Mrs. Adams votes no.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell votes no.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    Mr. Brooks. No.
    The Clerk. Mr. Brooks votes no.
    Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    [No response.]
    The Clerk. Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Bucshon?
    Mr. Bucshon. No.
    The Clerk. Mr. Bucshon votes no.
    Mr. Benishek?
    Mr. Benishek. No.
    The Clerk. Mr. Benishek votes no.
    Ms. Johnson?
    Ms. Johnson. Aye.
    The Clerk. Ms. Johnson votes aye.
    Mr. Costello?
    Mr. Costello. Aye.
    The Clerk. Mr. Costello votes aye.
    Ms. Woolsey?
    [No response.]
    The Clerk. Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Aye.
    The Clerk. Mr. Wu votes aye.
    Mr. Miller?
    [No response.]
    The Clerk. Mr. Lipinski?
    Mr. Lipinski. Aye.
    The Clerk. Mr. Lipinski votes aye.
    Ms. Giffords?
    [No response.]
    The Clerk. Ms. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Ms. Edwards votes aye.
    Ms. Fudge?
    [No response.]
    The Clerk. Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. No.
    The Clerk. Mr. McNerney votes no.
    Mr. Sarbanes?
    Mr. Sarbanes. Aye.
    The Clerk. Mr. Sarbanes votes aye.
    Ms. Sewell?
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Clark?
    Mr. Clark. Aye.
    The Clerk. Mr. Clark votes aye.
    Chairman Hall. The clerk will report the----
    The Clerk. Mr. Chairman, 10 members vote aye, and 19 
members vote no.
    Chairman Hall. All right. The amendment is not agreed to.
    
    
    Chairman Hall. Are there further amendments?
    Mr. Smith. Mr. Chairman.
    Chairman Hall. The gentleman from--Mr. Smith from Texas.
    Mr. Smith. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. All right. The next amendment is offered by 
the gentleman from Texas, Mr. Smith. Are you ready to proceed 
with your amendment?
    Mr. Smith. Yes, I am, Mr. Chairman.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 018, amendment to H.R. 1425, 
offered by Mr. Smith of Texas.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered. The gentleman is 
recognized for five minutes on his amendment.
    Mr. Smith. Thank you, Mr. Chairman. This amendment is a 
direct result of concerns raised by one of my constituents 
during a town meeting a couple of months ago. Maybe this is how 
democracy is supposed to work.
    A Department of Energy laboratory required his small 
business to pay them 90 days up front for a joint research 
project under a Work For Others Agreement. For example, the 
small business enters into a Work for Others Agreement with an 
Energy Department laboratory for a 12-month effort valued at 
$240,000. The small business could be required to pay $60,000 
in advance to meet the 90-day requirement.
    This rule creates a difficult cash flow situation for 
typical small businesses and makes it harder for them to 
partner with the national laboratories to bring new 
technologies into the marketplace.
    I wrote the Department of Energy on behalf of my 
constituent to ask them to reexamine this 90-day policy, and 
they did, and I want to compliment the DOE for changing their 
regulation from 90 days to 60 days for advanced payments. They 
made this change only two weeks after receiving my letter.
    However, I believe that an upfront cash advance of 30 days 
is a more reasonable policy, and that is what my amendment 
would require for a small business innovative research project. 
A 30-day cash advance from the small business is more in line 
with how bills actually get paid, on a monthly basis. A 30-day 
advanced payment addresses concerns raised by federal agencies 
about maintaining a positive cash balance while also lessening 
the burden on small businesses.
    Small businesses are the engine that drives our economy. 
Given our current fiscal crisis, it is more important than ever 
that we eliminate roadblocks to job creation. This amendment 
helps achieve that goal, and I urge my colleagues to support it 
and yield back the balance of my time.
    Chairman Hall. I thank the gentleman, and I understand that 
you seek to ensure that small businesses are not overburdened 
by the Federal Government regulations that require them to 
advance a great deal of money upfront. At a time when many 
businesses are strapped for cash to operate with, I think the 
gentleman's amendment provides some relief for those businesses 
that will participate in the programs of the bill.
    I support this amendment and urge my colleagues to do the 
same.
    Is there any other discussion on the amendment?
    Ms. Johnson. Mr. Chairman, I----
    Chairman Hall. The chair recognizes the gentlelady from 
Texas.
    Ms. Johnson. Thank you, Mr. Chairman. I support the intent 
of this amendment. We do need to do all we can to encourage 
small businesses to team up with our national labs. The 
scientists and engineers in our national labs represent a 
tremendous resource and expertise that will further the 
ingenuity of our small businesses, and I applaud the gentleman 
for offering this amendment.
    Thank you.
    Chairman Hall. The gentlelady yields back her time, and I 
want to thank the amendment and the member for this amendment.
    Is there further discussion on the amendment?
    Hearing none, all in favor, say aye. Those opposed, say no. 
The ayes have it, and the amendment is agreed to.
    Are there other amendments?
    Mr. Lujan. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. Our next amendment is offered from the 
gentleman from New Mexico, Mr. Lujan. Are you ready to proceed 
with your amendment?
    Mr. Lujan. I am, Mr. Chairman.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 016, amendment to H.R. 1425, 
offered by Mr. Lujan of New Mexico.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered.
    Mr. Lujan. Thank you, Mr. Chairman. This----
    Chairman Hall. The gentleman is recognized for five minutes 
to explain his amendment.
    Mr. Lujan. Thank you, Mr. Chairman. This amendment would 
increase the set-aside amount to STTR over three years. I am 
introducing this amendment to help bridge the divide separating 
small businesses from our R&D institutions.
    Over the years the private sector has become increasingly 
isolated from our research institutions like universities and 
our national labs. This does not serve our Nation well. It 
reduces the main commercial advantage of funding and performing 
basic research in the country. Other countries are taking our 
R&D output and turning new scientific discoveries and newly-
developed technological capabilities into new businesses and 
new products.
    We need to remove the isolation of these two communities in 
order for the U.S. to be more competitive. STTR requires 
partnerships between small businesses and research institutions 
and would encourage these relationships, which is why I think 
STTR Programs need to be increased.
    Furthermore, this amendment makes economic sense as it 
would yield higher commercialization output. At the hearing the 
Technology and Innovation Subcommittee held a few weeks ago 
Professor Siegel testified that studies have shown that a 
university connection to an SBIR project substantially 
increases the likelihood of successful commercialization.
    So by putting more funds into STTR projects which require 
such partnerships we'll be positioning the SBIR and STTR 
portfolio to generate more jobs and a better economy.
    As we truly understand, Mr. Chairman, the importance of 
partnering up small businesses with the research and 
development capabilities and capacity of the United States, 
especially those the engineers most talented in our Nation with 
our universities and national labs. It is incumbent that we 
truly look to programs that have shown some success and that 
really positioned U.S. companies to take advantage of a 
technological revolution that we need to reinvigorate with the 
United States.
    With that, Mr. Chairman, I urge the adoption of this 
amendment.
    Chairman Hall. The gentleman yields back his time. I thank 
the gentleman for his amendment. I am concerned that the 
gentleman's amendment increases the size of the STTR Program by 
100 percent over the course of three years. Growing the program 
from approximately 800 million a year to 1.6 billion a year at 
a time when most agencies' programs are facing flat budgets, an 
additional 800 million would be taken from the extramural 
research budgets of our federal agencies.
    I am just not confident this big change is justified by any 
data that we have, current have for the STTR Program. 
Therefore, I must oppose the gentleman's amendment.
    Is there other discussion?
    Hearing no further discussion, the vote occurs on the 
amendment. All in favor, say aye. Those who oppose, say no. In 
the opinion of the chair the no's have it. The no's have it, 
and the amendment is not agreed to.
    Are there other amendments?
    Mr. Mr. Tonko. Yes, Mr. Chairman. I have an amendment at 
the desk.
    Chairman Hall. The next amendment is offered by the 
gentleman from New York, Mr. Tonko. Are you ready to proceed 
with your amendment?
    Mr. Tonko. I am, Mr. Chairman.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 029, amendment to H.R. 1425, 
offered by Mr. Tonko of New York.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered. The gentleman is 
recognized for five minutes to explain his amendment.
    Mr. Tonko. Thank you, Mr. Chairman. The intent of this 
amendment is to make certain that phase II recipients can 
continue to use state and local organizations for 
commercialization assistance.
    It also ensures that they are aware that this flexibility 
is still possible even if agencies choose to contract with a 
national vendor for these services. It is my belief that state 
and local representatives are generally in a better position to 
assist companies through commercialization than a national 
contractor which may not be aware of the commercialization 
support services that are supported by and available through 
state technology-based economic development programs.
    State and local representatives can also introduce 
companies to other sources of collaboration and many other 
aspects required on that path to commercialization.
    While I believe that the flexibility language in this 
section allows recipients to exercise this option, I am still 
concerned that they may not be aware of these options.
    However, I understand that there is a concern about the 
best way to address this issue and that the current amendment 
might not be the best solution. Mr. Chairman, I know that 
staffs have been talking, and if you would be willing to work 
with my office to address this issue, I would consider 
withdrawing the amendment.
    Chairman Hall. I thank the gentleman, and I think the goal 
of the amendment was to ensure the state-based organizations 
with expertise and commercializations are able to support small 
businesses who have received SBIR awards, and I do certainly 
agree to work with you, and I think you have a good thrust, and 
we will--I certainly personally will, and I think this side of 
the docket will work.
    And I accept the fact that you withdraw the amendment at 
this time.
    Mr. Tonko. Yes, Mr. Chairman.
    Chairman Hall. We will work together at a later time.
    Mr. Tonko. Absolutely. I move to withdraw the amendment.
    Chairman Hall. The amendment is withdrawn.
    Are there other amendments?
    Mr. Tonko. Thank you.
    Chairman Hall. Thank you, sir.
    Ms. Johnson. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. The next amendment is offered by the 
gentlewoman from Texas, Mrs. Johnson. Are you ready to proceed 
with your amendment?
    Ms. Johnson. Yes, Mr. Chairman.
    Chairman Hall. All right. The clerk will report the 
amendment.
    The Clerk. Amendment number 031, amendment to H.R. 1425, 
offered by Ms. Eddie Bernice Johnson of Texas.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading.
    Without objection, it is so ordered. The chair recognizes 
Mrs. Johnson on her amendment.
    Ms. Johnson. Thank you, Mr. Chairman. I am offering this 
amendment today along with Congresswoman Wilson, and will 
ensure--this will ensure that the agencies participating in the 
SBIR Program have the resources they need to conduct the 
necessary outreach activities.
    As we all know, the SBIR Program is an important program 
for fueling technological innovation and spurring job creation. 
I believe that innovation can come from anywhere and that all 
small businesses, not just a small subset of small businesses, 
are capable of developing new technologies, and I think that 
our chances of getting game-changing innovation are 
significantly increased if SBIR applicant pool is larger and 
more diverse.
    For these reasons I believe we need to do a better job of 
reaching out to small businesses that have traditionally been 
under-represented in this program. This amendment does just 
that. It provides the SBIR agencies with the resources they 
need to conduct outreach to small businesses and geographical 
areas that have been under-represented in the program, 
including rural areas and areas with unemployment rates that 
exceed the national average. And it facilitates outreach to 
small businesses owned by women, minorities, and veterans.
    This amendment takes important substantive steps towards 
ensuring that SBIR Program is available and accessible to all 
small businesses in the country. And in addition, as many of 
you are aware, one of the four stated Congressional objectives 
of SBIR Program is to increase participation by women and 
minority-owned businesses. This certainly has not been 
achieved.
    In its 2008 evaluation of the program, the National 
Research Council found that the program was having serious 
problems achieving this objective. It recommended that the 
targeted outreach be developed to improve the participation 
rates of women and minority-owned small businesses. This 
amendment follows through on its NRC recommendation.
    And I just want to take a moment to clarify a few points 
about this amendment. It is cost neutral. Congresswoman Wilson 
offered a very reasonable outreach amendment at the 
subcommittee markup based on a provision that was included in 
the bipartisan House Bill from last Congress. That amendment 
was rejected on a party line vote based on negligible costs 
associated with the program.
    Based on the feedback received at the subcommittee markup, 
we developed a cost-neutral proposal. This does not include a 
mandate for agencies to spend money on outreach. Only those 
agencies that choose to participate in the Administrative and 
Oversight Expenses Pilot Program will be required to set aside 
some money for these activities.
    The amendment also includes a waiver which allows SBA to 
exempt an agency from the requirement if it is appropriate and 
necessary to do so. While language was added at the 
subcommittee markup to encourage applications from the under-
represented small businesses, I firmly believe that we need to 
take our outreach efforts beyond a mere encouragement.
    If we truly are committed to the stated Congressional goal 
of increasing participation by under-represented groups in the 
SBIR Program, we need to provide agencies with a formal 
mechanism to conduct outreach and technical assistance and give 
them the resources to do it.
    Chairman Hall, as you know, this is a very important issue 
to me, and it should be an important issue to all the members 
of this committee. This amendment is motivated by nothing but 
the best intentions and represents a good faith attempt by me 
and Ms. Wilson to address the outreach challenges and to be as 
responsive as possible to concerns we heard from the other side 
of the aisle in the subcommittee markup.
    And so I do urge you to consider the adoption of this 
amendment, and I yield back the balance of my time.
    Chairman Hall. Thank the gentlelady. She yields back the 
balance of her time, and the chair thanks the gentlewoman from 
Texas for her amendment.
    The bill provides agencies the ability I guess for the 
first time to use some of their program funding to support 
outreach and other administrative activities, and I like the 
way the bill is currently worded, allowing agencies the ability 
to choose how these funds might be used.
    Each year an agency could change how it wanted to spend. If 
it needed to look into some fraud allegations, it could do 
that. If it needed to provide targeted outreach to a certain 
group, it could that, and if it really wanted to boost 
commercialization outreach, it probably could do that as well. 
Or it could do a little bit of all of it.
    However, I have some problems, and I am inclined to oppose 
the ranking member's amendment because it would require a 
certain amount of funding to always go towards outreach to 
certain specific groups.
    And another thing, there are others that ought to be added 
to those groups, and I think outreach is important, but I don't 
like making it mandatory when it is already permitted. Unless 
we could work together and make some changes on this, and we 
have discussed this personally. I wanted instead of ``shall'', 
``may'' go to those groups, and if we have specific groups, 
there would be some groups that I would like to add to that 
group.
    If the gentlelady wants to do that, or you can have the 
alternative that we can have the roll call vote as you choose.
    Ms. Johnson. Mr. Chairman, this is too important to just 
shaft it I think, so I would love to work with you for some 
acceptable wording. I would like to know the additional groups 
you want to add.
    Chairman Hall. Specifically I want to add the Disabled 
Veterans, and they have been turned down in other----
    Ms. Johnson. We do have veterans listed. You want to add 
the word disabled?
    Chairman Hall. And other disabled groups.
    Ms. Johnson. That is acceptable to me to add disabled 
groups. I know that the intent is not yours, but it is the 
intent of the behavior behind whoever it is is to just kind of 
push this aside. This was one of the original intents of this 
legislation, and out of the spirit of attempting to be 
cooperative, I am going to agree to work with you on any final 
wording of this provision.
    I don't think that my amendment is unreasonable, but I am 
willing to work with you and whoever is pushing you to make 
this more acceptable.
    Chairman Hall. It is just the things we discussed that I 
don't like making it mandatory actually when it is already 
permitted, but I would listen to others.
    Are there others who want to be heard?
    Now, what is your request, Ms. Johnson? That we pull it 
down and work together on it as we go, or do you want to----
    Ms. Johnson. Yes, we can do that.
    Chairman Hall. Do you want to have further discussion at 
this time?
    Ms. Johnson. Well, if anybody else wants to have 
discussion, I have no objection to that.
    Chairman Hall. Mr. Rohrabacher, the chair recognizes you 
for five minutes.
    Mr. Rohrabacher. Mr. Chairman, I join with you in your 
commitment to making sure if there is a list that the list be a 
little bit more comprehensive than what was being presented.
    I would suggest that people with disabilities, I know there 
is a company in my district, the Sara Corporation, that is run 
by a man who is in a wheelchair, a paraplegic, and he has had 
to overcome great obstacles to the success of his small 
business. And it is a research company that falls really within 
the arena of what we are talking about today, and I am very 
proud to have worked with him in the past and certainly I would 
think if we make a list, which is a big question, should we 
have lists of people of who specifically to reach out to rather 
than just trying to say we are going to be fair to everybody, 
certainly people with disabilities should be on that list, and 
I have an amendment to that effect that would be the last 
amendment today, which may or may not be necessary, depending 
on your discussion at this moment.
    Thank you.
    Chairman Hall. Would the gentleman----
    Mr. Rohrabacher. Yield back.
    Chairman Hall.--yield back? I guess we want to be positive 
that it is permissible and not mandatory. Does that----
    Ms. Wilson. Mr. Chairman.
    Chairman Hall. Or do you want to work toward a solution?
    Ms. Johnson. Well, Mr. Chairman, I would like to work 
toward a solution if it is just permissible, that is 
permissible now, and that hadn't brought the results that this 
recent legislation had intended.
    I have no problem with having Mr. Rohrabacher's amendment 
which adds to women, minorities, veterans, disabled, and who 
else? And 501, I mean, 504, which is access for disabled 
persons.
    Chairman Hall. I still have the problem with being 
mandatory. If it is ``may'' instead of ``shall'', I would 
withdraw my opposition to it, but if it is not, well, then the 
board could vote, the committee could vote on it.
    Mr. McNerney. Mr. Chairman.
    Chairman Hall. Yes, sir.
    Mr. McNerney. Maybe you would recognize.
    Chairman Hall. The chair recognizes the gentleman.
    Mr. McNerney. Well, I certainly appreciate your sentiment 
about including disabled veterans, very important, and other 
groups that might need help, but I must stick with the ranking 
member on the mandatory part of this. If it is just, if it is 
not mandatory, people aren't going to do it, and I think the 
mandatory part will--it has shown, it has been shown to be 
effective. There is groups that will be impacted, and I 
strongly urge my colleagues to consider how important it is to 
outreach to groups that may need help getting into the program.
    With that I yield back.
    Chairman Hall. I thank the gentleman. This committee has 
gone through bills where we attempted to add disabled groups, 
and they were turned down. I just think it is so important that 
they not eliminate of all the groups in the world, particularly 
at a day and time like this, disabled veterans who might want 
to apply.
    So if----
    Ms. Wilson. Mr. Chairman.
    Chairman Hall. What is the gentlelady's wishes?
    Ms. Wilson. Mr. Chair.
    Chairman Hall. Ms. Wilson, the chair recognizes Ms. Wilson.
    Ms. Wilson. Thank you, Mr. Chairman, and thank you, Ranking 
Member Johnson.
    I appreciate the opportunity to speak today, but I must say 
that I am disappointed. I am disappointed that we could not 
resolve this issue at the subcommittee level before a full 
committee markup, and I will be more disappointed still if we 
cannot pass this amendment today.
    Three weeks ago in the subcommittee markup of this bill I 
offered an amendment similar to the one we are discussing now. 
It was simple. It was eight pages of identical text, word for 
word, that was included in last year's reauthorization of the 
SBIR and STTR Programs, reauthorization that passed the House 
easily by 300 to 86, 41 vote. We all came to serve in the 112th 
Congress to create jobs, jobs, jobs. This is the Nation's 
number one issue.
    I was shocked to find out given the non-controversial 
nature of last year's bill that a significant portion of it was 
eliminated before we even heard it this year. Particularly the 
section establishing an outreach program at the Small Business 
Administration that would attract small businesses owned and 
controlled by women and minorities into the SBIR and STTR 
Programs.
    To remedy that I offered my amendment in subcommittee that 
reinserted the deleted text from last year's bill. The only 
concern I heard voiced before my amendment was voted down 
across partisan lines in subcommittee was that it was not 
revenue neutral. Well, I am back.
    Ms. Johnson and I have solved that problem together, and we 
have come here today to ask your support for this amendment. 
This amendment achieves the same goal as the program that was 
eliminated from last year's bill, and it does so in a revenue 
neutral way.
    This is an important program. One of the stated objectives 
of the SBIR Program is to foster the participation of women and 
minority-owned firms and technological innovation. 
Unfortunately, a 2008 assessment of the program by the National 
Research Council showed that federal agencies involved in the 
SBIR have not been successful in meeting this goal. At the 
National Science Foundation the number of women-owned 
businesses receiving awards has remained flat for the past 
several years. Results when analyzing minority-owned firms 
receiving SBIR funds are even more troubling.
    Awards have stagnated across every agency, and at DOD the 
number has actually declined over time. This amendment here 
today addresses these concerns. It helps the SBIR Program meet 
its objectives; jobs, jobs, jobs.
    Small businesses serve a vital role in our community. They 
are innovative and more often than not the principle source of 
new jobs. You never know where the next big idea will come 
from, and we must all do what we can to support the innovative 
potential of all small businesses, and an innovative potential 
within all of our communities.
    To not approve this amendment would ignore and 
disenfranchise an important segment of our communities. It 
would deny access to jobs for those in rural areas, 
transportation-challenged communities, grandmothers, young 
people. All of us need jobs. My district has an unemployment 
rate that exceeds the national unemployment rate. Anything that 
we can do to help create jobs I would appreciate it.
    I urge you to support this amendment. Jobs, jobs, jobs.
    Thank you, Ms. Johnson, and thank you, Mr. Chair.
    Chairman Hall. The gentlelady yield back her time.
    We are needing to get on closer to a vote on this. Is there 
anyone else? I don't want to deny anybody the right to speak.
    Ms. Johnson. Yes, Mr. Chairman.
    Chairman Hall. I recognize the gentlelady from Texas.
    Ms. Johnson. As we have discussed this this morning, it is 
my great intent to do all I can to work with you, Mr. Chair, as 
the leader of this committee, but the more I think about it the 
more it is very difficult for me to put language in here that 
means nothing.
    We either want to do it, or we do not want to do it. It is 
not--it doesn't take a rocket scientist to understand the 
intent of this bill and all we are trying to do is reach that 
intent so it can be meaningful to this Nation.
    So I would just simply ask for an up or down vote on the 
amendment as submitted.
    Chairman Hall. All right. The gentlelady yield back her 
time.
    Mr. Wu. Mr. Chairman.
    Chairman Hall. Yes. Who seeks?
    Mr. Wu. Mr. Chairman.
    Chairman Hall. Mr. Wu.
    Mr. Wu. Thank you very much.
    Chairman Hall. The chair recognizes you for five minutes.
    Mr. Wu. Thank you very much. Now that it is clear that our 
ranking member intends to seek a recorded vote, I do want to 
speak on this before we vote.
    It is very important. I have not always been a strong 
proponent of such provisions, but I want to speak very strongly 
on behalf of the gentlelady's proposal.
    First of all, it is revenue neutral, which was the primary 
objection which was raised at the subcommittee level, and that 
concern has been addressed.
    More importantly, I take it as good faith that it has been 
explained to me that there are members of the majority who are 
concerned that a list of some individuals necessarily excludes 
other individuals, other groups, and I understand that. And why 
should we pick out some groups.
    This is one of those fairness questions which is very 
difficult to address, but I have come to terms with this in the 
following way. It is not that we pick out some groups at the 
disadvantage of others, but historically is the case that some 
programs and some subcultures, if you will, some business 
communities, some professions, have been going to certain 
groups and not others.
    And I don't necessarily think of this as any mal-intent. 
There may be, and I don't think there is any bad intent on the 
part of anyone in the development of these patterns.
    What tends to happen is human nature. We look for people 
who are roughly like us or even if not intentionally doing 
that, we travel in certain circles, and when we look for folks, 
we tend to find folks in those circles. It is not a bad intent. 
It is human nature. That is how personal habit, business 
practice, professional practice tends to work.
    It is uncomfortable to push outside of those circles, and 
that is true of all of us. I think the gentlelady's amendment, 
like other efforts like it, in its best sense is a strong 
effort to push us just a little bit beyond our standard comfort 
levels so that we will reach out to folks who have not been 
historically included. And once they are included, then even if 
we revert to those very human comfort levels, at least a few 
more groups have been included, even if we drop those 
provisions in the future.
    I think that is very, very important, and for those reasons 
I intend to support the gentlelady's amendment today. I do wish 
that the ranking member and the chairman could work this out, 
but it seems like we are at logger heads, and well, I yield 
back the balance of my time.
    Mr. Cravaack. Mr. Chairman.
    Chairman Hall. The gentleman yields back.
    Who seeks recognition?
    Mr. Cravaack. Mr. Chairman, Chip Cravaack, Minnesota, sir.
    Chairman Hall. Mr. Cravaack.
    Mr. Cravaack. Point of question. Does the current amendment 
in its current form exclude disabled American veterans?
    Chairman Hall. It includes all veterans. It doesn't specify 
disabled. We went through that situation with the Competes 
bill, and they sent that to the Senate and they took disabled 
veterans out and sent it back. And we tried to work with them. 
At that time we were told we won, and I don't want to get into 
that but we don't want to go for a mandatory solution here. We 
are not denying anything. I prefer to retain full agency 
flexibility but not mandatory oversight. We have a 
philosophical difference here about how best to encourage 
outreach, and I am willing to let it go to a vote.
    Mr. Quayle. Mr. Chairman?
    Chairman Hall. The gentleman from Arizona?
    Mr. Quayle. Mr. Chairman, thank you very much.
    Mr. Cravaack. I yield back my time, sir. Thank you.
    Mr. Quayle. The Ranking member and the gentlelady from 
Florida have laudable goals for increased participation for 
those groups that are underrepresented in the SBIR and STTR 
programs. And during the Subcommittee hearings and markups that 
we had, one of the things with the gentlelady from Florida's 
amendment that we did have a problem was that it wasn't revenue 
neutral. Now it is changed. It is revenue neutral, but it does 
have these mandates on the agencies that I am not comfortable 
with. And I think Chairman Hall really elucidated on that 
subject because we don't want the agencies to have to be 
basically hamstrung to be told how they use their 
administrative budgets accordingly. I think that they should be 
able to have the flexibility to address their concerns how they 
best see. And I think that the goals of this are good, and that 
is why we already have in the legislation where we require 
federal agencies to encourage applications from companies who 
have been historically underrepresented in the SBIR and STTR 
programs. So I will be opposing this amendment, but I do 
understand the Ranking Member's position and the gentlelady's 
from Florida. I just fundamentally disagree with it. Thank you. 
I yield back.
    Ms. Johnson. Could I just ask for some clarification?
    Chairman Hall. I recognize you for as much as you have to 
use of five minutes.
    Ms. Johnson. Thank you very much. The last thing I want to 
do is be an irritant, but I do feel very strongly that 
opportunities are noticed. This does nothing but request that 
they make an effort for outreach. It does not mandate to do 
anything as a result of that unless they find of course that 
through oversight there has not been an opportunity. It goes to 
the grain of many people to offer equal opportunity. I 
understand that. But historically in this Nation, it has been a 
real strong pattern that opportunities have not been offered 
and outreach has not been made, and that is all this does. It 
does not mandate that they do anything but be sensitive to it 
and offer that opportunity. Of course there are some who still 
might object to that, but the intent, the original intent of 
this legislation, that was a basic intent. And you know, there 
are a lot of things I do not understand, and I will admit to 
that. I do not understand the objection to this amendment. But 
I feel negligent if I do not call attention to the intent that 
this legislation set out to do and that was to be inclusive.
    Mr. Quayle. Will the gentlelady yield for----
    Ms. Johnson. Yes, I will yield.
    Mr. Quayle. I just have a question. If it's not a mandate, 
then you shouldn't have any objection to the Chairman's 
changing of the word from shall to may.
    Ms. Johnson. The difference is it is a waste of language to 
put it in here to me. They may do that now. This is a reminder 
that they shall make an opportunity to notice it.
    Mr. Quayle. Will the gentlelady yield?
    Ms. Johnson. Yes.
    Mr. Quayle. But if it isn't a mandate, a ``shall'' is a 
mandate. A ``may'' is not a mandate. So if it is not a 
mandate----
    Ms. Johnson. Sir, let me just point this out. For 38 years 
I have been in public service, and I do know the difference 
between ``shall'' and ``may''. May is always out there, whether 
it is written or not. May has ruled this Nation. ``May'' has 
been an opportunity for anybody to do anything they wanted to 
do. But it has not happened under ``may''. And that is the only 
reason why ``shall'' reaches for opportunities for outreach is 
put here. It doesn't say you have got to give these people 
anything. But it does sensitize an agency to be sure that they 
have looked at it, and that is all it does. And if you look at 
the history of all of this, you know--I don't play with this 
stuff and I don't do this for the purpose of trying to be 
insulting. It is a factual thing that women, minorities, 
veterans have not been included. Perhaps they are not assertive 
enough, and many of them are not assertive because they never 
had the opportunity. But if there is an extra sheet of paper 
put there saying, you know, this is open to you, then that is 
outreach. They frequently do put newspaper announcements. Many 
of them are putting a statement of equal opportunity, and that 
is usually enough. When people feel there is an equal 
opportunity, they will apply. If they don't, take it from me, I 
am a 75-year-old black woman, and if I feel I am going to be 
insulted, I pass it on by. But if I think there is an equal 
opportunity and I can qualify, I might seek it. That is all 
this does. I am from Waco, Texas. I understand all this. I have 
lived it.
    Mr. Wu. Will the gentlelady yield for----
    Ms. Johnson. Yes.
    Mr. Wu. With the consent of the Ranking Member, I would 
like to offer a second-degree amendment to the gentlelady's 
amendment and include the words ``persons with disabilities'' 
to the gentlelady's amendment.
    Ms. Johnson. That is accepted. I just said that to Mr. 
Rohrabacher. I have no objection to anybody who has been 
overlooked to get a notice that they are welcome to apply.
    Mr. Rohrabacher. Mr. Chairman?
    Chairman Hall. The gentlelady's time has expired several 
times----
    Ms. Johnson. If I need some more----
    Chairman Hall. And I am going to give it to you, too, if 
you ask for it. Mr. Rohrabacher is recognized.
    Mr. Rohrabacher. Well, just to make my position clear, I 
personally and philosophically believe that such lists are not 
consistent with the way I think we should have honest and open 
government and fair government. Making lists of specific people 
is wrong because there are a lot of people who are suffering in 
this country and struggling in this country, and we should not 
be looking, reaching out to them, based on their race or their 
sex or anything else.
    Now, somebody with disabilities can be of any sex and any 
race, and the fact is we know that someone with a disability we 
absolutely are aware that that person has gone through 
struggles. But when you try to say we should reach out to 
people and put on a list of those people who are of a certain 
race or are female as compared to male, we may be reaching out 
to people who have absolute benefits and actually have an 
advantageous position over other people who are struggling to 
get those same contracts.
    I mean, if you have a situation where someone comes from a 
very poor family and has struggled all their life but you are 
going to reach out to someone else because they happen to be of 
a minority race but their family is very wealthy, what we are 
doing is giving the advantaged person an even more advantage. 
And that is why it is not proper to go about making racially 
based decisions. If we have lists, we might as well just have a 
list and bring it down to what is really meant here. We can 
reach out to anybody but white males.
    Ms. Johnson. Would the gentleman yield?
    Mr. Rohrabacher. Not quite yet. Let me finish my point. I 
will be happy to. Why don't we just eliminate all this extra 
verbiage and just say that we want the government to reach out 
to everybody except white males? Why we wouldn't do that, 
because it would obviously be racist. Well, it is racist to do 
this in the first place. My recommendation was people with 
disabilities because we know that whoever is being helped is 
someone who actually has gone through a personal life struggle, 
but we don't know whether they are black Americans or Hispanic 
Americans or whatever. They could come from very wealthy 
families in competition with a white male who maybe came from a 
very deprived family.
    Ms. Johnson. Will the gentleman yield?
    Mr. Rohrabacher. Yes, I certainly will. Go right ahead.
    Ms. Johnson. Mr. Chairman----
    Chairman Hall. Do you yield to the gentlelady?
    Mr. Rohrabacher. Yes, I did.
    Chairman Hall. All right. The gentleman yields. I think you 
have about 1-1/2 minutes left.
    Ms. Johnson. Okay. I will try to be brief. I never wanted 
this to come to the point of this kind of discussion, but it 
probably is necessary. And this does not mean to reach out to 
everybody but white males, but there are a lot of white males 
that are disabled and veterans. However, if you look at this 
history of this Nation, it wouldn't have to be any outreach if 
there was anything but white males getting these opportunities. 
This is only a way of saying make an opportunity, but let the 
people other than white males and white males, too, because 
they already know that is who is getting it, to let them know 
that they can take advantage of these programs.
    It is amazing to me, absolutely incredibly amazing, why 
this came to this point. It reinforces why we need it in the 
first place. But the more I see the resistance, the more it 
concerns me that somewhere in this Committee we have lost track 
of what this legislation was ever meant to be. But nonetheless, 
thank you, Mr. Rohrabacher. We have served on this Committee 
together in the 19th year, and this is the first time we have 
gotten into a discussion where we had to talk about white males 
versus the rest of the world. Thank you.
    Chairman Hall. The gentlelady yields back her time. Does 
the gentleman from California yield back your time?
    Mr. Rohrabacher. Well, let me just note that at no point do 
I ever suggest that it is acceptable to judge people by their 
race, and whatever one's definition of racism is, it has to be 
including people who would judge others by their race. I yield 
back the balance of my time.
    Chairman Hall. The gentleman yields back his time.
    Mr. Lujan. Mr. Chairman.
    Chairman Hall. Who seeks recognition? The gentleman from 
Arizona?
    Mr. Lujan. From New Mexico, Mr. Chairman.
    Chairman Hall. All right, recognizes--we have a vote on and 
we have discussed this thing and discussed it, but I would like 
to hear from you if you would quickly give us a 5-minute answer 
in about 2 minutes.
    Mr. Lujan. Mr. Chairman, I appreciate that. I would like to 
ask unanimous consent to accept Mr. Wu's secondary amendment.
    Chairman Hall. Excuse me. Go ahead, sir.
    Mr. Lujan. Mr. Chairman, I would like to ask unanimous 
consent----
    Chairman Hall. You have more than five minutes now. We 
don't have a vote on I am told.
    Mr. Lujan. Mr. Chairman, I would like to ask unanimous 
consent that we accept Mr. Wu's secondary amendment.
    Chairman Hall. Is there objection? I have no objection to 
his secondary amendment.
    Mr. Lujan. Thank you, Mr. Chairman.
    Chairman Hall. Is there objection? Does the Chair hear 
objection? Chair hears none.
    Mr. Lujan. Mr. Chairman, with that being said, again, just 
to remind everyone here, I appreciate where the discussion went 
to really talk about veterans. To say that, we should not 
require agencies to reach out to veteran-owned businesses with 
the sacrifices that they make every day of their lives and what 
they did for this great Nation of ours? To see what we can 
truly do to make sure that they are going to be included? 
Simply, as the amendment says, to reach out and to provide 
technical assistance to provide a foundation for these 
companies, for these entrepreneurs, to be able to strengthen 
this great economy of ours. I think it is sad if we don't go 
down that line. We should do all that we can do to reach out to 
some of these organizations. And again, I appreciate that we 
have been talking about veteran organizations, veteran groups, 
veteran-owned businesses, veteran entrepreneurs to see what we 
can do to reach out and work with them and get them included 
here, Mr. Chairman. And again, it is revenue neutral. When we 
talk about what needs to be done to get the economy growing 
again and looking at language like this that allows us to work 
together to look after men and women of all races, of all 
creed, to be able to provide them that path forward to seek out 
programs like SBIR and STTR that are great I think is something 
important for us to consider. With that, Mr. Chairman, I 
certainly encourage adoption of this amendment which now 
includes disabled veterans, and I yield back my time.
    Chairman Hall. The gentleman yields back his time. At this 
time we will have a vote on the amendment as amended. All those 
in favor say aye, no. The no's have it. The no's have it. The 
amendment is not agreed to.
    Ms. Johnson. Recorded vote, Mr. Chairman.
    Chairman Hall. Now, let me make this statement before we go 
any further. The gentlelady has accepted the persons with 
disability to include veterans with disabilities, but we still 
have the mandatory situation to deal with. I urge a no vote on 
this, and the clerk will call the roll.
    The Clerk. Chairman Hall?
    Chairman Hall. No.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    [No response.]
    The Clerk. Mr. Smith?
    [No response.]
    The Clerk. Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    Mr. Bartlett. No.
    The Clerk. Mr. Bartlett votes no.
    Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    Mr. Neugebauer. No.
    The Clerk. Mr. Neugebauer votes no.
    Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Broun?
    Dr. Broun. No.
    The Clerk. Mr. Broun votes no.
    Mrs. Adams?
    Mrs. Adams. No.
    The Clerk. Mrs. Adams votes no.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell votes no.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    Mr. Brooks. No.
    The Clerk. Mr. Brooks votes no.
    Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    Mr. Hultgren. No.
    The Clerk. Mr. Hultgren votes no.
    Mr. Cravaack?
    Mr. Cravaack. Yea.
    The Clerk. Mr. Cravaack votes aye.
    Mr. Bucshon?
    Mr. Bucshon. No.
    The Clerk. Mr. Bucshon votes no.
    Mr. Benishek?
    Mr. Benishek. No.
    The Clerk. Mr. Benishek votes no.
    Ms. Johnson?
    Ms. Johnson. Aye.
    The Clerk. Ms. Johnson votes aye.
    Mr. Costello?
    Mr. Costello. Aye.
    The Clerk. Mr. Costello votes aye.
    Ms. Woolsey?
    Ms. Woolsey. Aye.
    The Clerk. Ms. Woolsey votes aye.
    Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Aye.
    The Clerk. Mr. Wu votes aye.
    Mr. Miller?
    [No response.]
    The Clerk. Mr. Lipinski?
    Mr. Lipinski. Aye.
    The Clerk. Mr. Lipinski votes aye.
    Ms. Giffords?
    [No response.]
    The Clerk. Ms. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Ms. Edwards votes aye.
    Ms. Fudge?
    Ms. Fudge. Aye.
    The Clerk. Ms. Fudge votes aye.
    Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. Aye.
    The Clerk. Mr. McNerney votes aye.
    Mr. Sarbanes?
    Mr. Sarbanes. Aye.
    The Clerk. Mr. Sarbanes votes aye.
    Ms. Sewell?
    Ms. Sewell. Aye.
    The Clerk. Ms. Sewell votes aye.
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Clarke?
    Mr. Clarke. Aye.
    The Clerk. Mr. Clarke votes aye.
    Chairman Hall. Are there other members who wish to vote? 
All right. The clerk will report the vote.
    The Clerk. Mr. Chairman, 15 members vote aye and 17 members 
vote no.
    Chairman Hall. The amendment is not agreed to.
    
    
    Chairman Hall. Are there other amendments?
    Mr. Lipinski. Mr. Chairman?
    Chairman Hall. Who seeks recognition?
    Mr. Lipinski. Mr. Lipinski.
    Chairman Hall. Mr. Lipinski? All right. The next amendment 
is offered by the gentleman from Illinois, Mr. Lipinski. Are 
you ready to proceed with your amendment?
    Mr. Lipinski. Yes, I have an amendment at the desk.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 018, amendment to H.R. 1425 
offered by Mr. Lipinski of Illinois.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading. Without objection, it is so ordered. The gentleman is 
recognized for five minutes to explain his amendment.
    Mr. Lipinski. Thank you, Chairman Hall, for your work in 
quickly advancing this critical bill. I have been a champion of 
SBIR and STTR programs since I have been in Congress, and I 
hope assuming this bill passes the House in short order that we 
can finally reach an agreement with the Senate. That is why I 
was proud to join you in cosponsoring this bill.
    While I believe that both SBIR and STTR programs have 
worked well, I believe they do not do enough to support 
academic or national lab researchers who are founding a small 
business in trying to bring a new product to market. This means 
not only building successful prototype, it also means market 
research, developing an intellectual property strategy, 
investigating commercial or business opportunities.
    Without guidance and help in the early phases of 
commercialization, many small businesses will never get off the 
ground. My amendment would address this problem by creating a 
new pilot program within STTR at the National Institutes of 
Health. This idea is based on the testimony of one of the 
witnesses in the hearing held before the Technology Innovation 
Subcommittee at the end of March. Mr. Crowell described 
University of Virginia's successful proof-of-concept program 
which helps researchers identify the most promising markets and 
direct their small business accordingly. This program, which is 
funded by a grant from the Coulter Foundation, has generated a 
five-to-one overall return on investment.
    This is not the only example of a successful phase zero 
program. The European Research Council funds a similar 
initiative, and Deshpande Center at MIT also includes some of 
these activities.
    This amendment will require the NIH to allocate $10 million 
from within its STTR program for at least 10 grants that will 
go to universities or other research institutions including 
national labs. These institutions would, in turn, use the 
grants to run proof-of-concept programs modeled after 
successful examples I have mentioned. Within a proof-of-concept 
program at a research institution, small grants would be 
awarded to individual researchers to support translational 
proof-of-concept work including market analysis and mentoring. 
Critically, the proof-of-concept programs would be required to 
use an industry project management board composed of local, 
technical and business experts. This board would monitor the 
progress of grant recipients, imposing market-driven milestones 
and reporting requirements. The board should also be quick to 
terminate any failing projects.
    My amendment would bring an idea that succeeded with other 
funding sources to the STTR program through a limited pilot 
program at the NIH. It is an idea that has improved 
commercialization outcomes whenever it has been tried. It is 
worth trying here.
    I urge my colleagues to support this amendment, and I yield 
back the balance of my time.
    Chairman Hall. I thank the gentleman for yielding back his 
time and actually, I yield myself five minutes.
    The amendment would take 13 percent of the STTR funds of 
the National Institute of Health's STTR program and redirect 
them to the university commercialization activities. That is 
what I understand the gentleman to be saying. And while I 
recognize that it is challenging for universities to achieve 
effective technology transfer, I am concerned that this 
amendment supports that effort at the cost of small businesses 
who are currently the lead partner on the STTR grant. Indeed 
this bill is primarily a small business innovation bill, and 
most important, I don't think it is appropriate to divert money 
away from small businesses under this bill. Further, under this 
amendment the NIH director would make awards to a university or 
research institution and allow the institution to fund 
individual grants. Traditionally NIH has provided awards 
directly to principal investigators after their applications 
have undergone a rigorous peer review process.
    I am concerned that the awards under this amendment would 
not be held to the same rigorous standards. While I agree that 
we should be promoting effective technology transfers at our 
colleges, universities and research institutions, I don't 
believe this is a proper vehicle to achieve that goal. For 
these reasons, I oppose the gentleman's amendment. Is there 
further discussion on the amendment? I yield back my time. The 
gentlelady from Ohio.
    Ms. Fudge. Thank you, Mr. Chairman. I would like to first 
thank my colleague, Mr. Lipinski, for offering this amendment. 
It is well-known and we have heard testimony time and time 
again that there does in fact exist a valley of death where 
technologies are stuck between research and commercialization 
with insufficient resources to pull them through. Mr. 
Lipinski's amendment would help address this problem by 
creating a pilot program for the early proof-of-concept stage 
of research and development. Moreover, it would help build the 
infrastructure of expertise and will facilitate the cultural 
change necessary for the transfer of technology from the 
university setting to the marketplace.
    Let us take a look at NIH. Ohio is one of the states hit 
hardest by this economic recession, but it is also one of the 
fastest-growing regions in bioscience. Last fiscal year the 
Ohio State University, which is my alma mater, had $124 million 
in NIH research expenditures which supported 2,500 jobs. Case 
Western Reserve University in my district received $185 million 
in NIH and NIHRR funds.
    Additionally, from 2000 to 2009, 170 companies were 
created, small businesses, from SBIR/STTR awards, and the 
majority of them were in Northeast Ohio. Mr. Lipinski's 
amendment will grow that number and enable technology 
commercialization across the Nation by making these R&D dollars 
more effective. I urge my colleagues to support this amendment, 
and I would like to yield the balance of my time to my 
colleague, Mr. Lujan.
    Mr. Lujan. I thank my colleague, Mr. Chairman, and I want 
to thank Mr. Lipinski as well for bringing this important topic 
forward. As you know, I am a proponent of technology transfer, 
and one of the significant roadblocks for technology transfer 
from universities and national labs is the lack of funding for 
proof-of-concept work, including technology maturation, 
prototype development, technical validation and market 
research. All of this is needed in order to attract business 
partners or capital for new technology. One of the roadblocks 
that groups, organizations, especially small businesses and 
entrepreneurs talk about is that there is no support to take 
basic technology innovation to mature it, to commercialize it, 
to attract investors or to help get it out of this valley of 
death. This is something that we hear from, not only during our 
hearings during markup, but I hear when I go home and I talk to 
our entrepreneurs. When those small business groups come and 
visit with us here at our offices, here in hearing rooms, this 
is one area that I think there is full agreement with.
    So this pilot program looks to be an effective way at 
testing a method for lowering the roadblock to 
commercialization. As we put ourselves back on a track to an 
innovative economy, to being able to attract more manufacturing 
here in the U.S., to help these entrepreneurs be able to move 
this technology forward, we need programs like this.
    So again, I applaud the efforts of my colleague. I fully 
support and I certainly hope that we can support small 
businesses to be able to accelerate their ability to take these 
innovative ideas and take them to the marketplace.
    With that, I yield back to my colleague from Ohio.
    Chairman Hall. The gentleman yields back. Is there 
further----
    Ms. Fudge. I yield back.
    Chairman Hall. --request? The gentlelady yields back her 
time.
    Mr. Lipinski. Mr. Chairman?
    Chairman Hall. Who seeks recognition?
    Mr. Lipinski. Mr. Lipinski.
    Chairman Hall. The author. I will recognize you, Mr. 
Lipinski. Go ahead, I recognize you for five minutes.
    Mr. Lipinski. Thank you, Chairman Hall. I will make this 
quick. I want to thank you again for all your work on this bill 
and also thank Chairman Quayle for his work.
    We all clearly want to support small business, but we do 
know that we have not only great research institutions, 
universities but the great research that is going on at our 
national labs that is out there. It is unfortunate that we 
don't see enough of what is found in the lab brought to the 
market. I think this is critical for the future of our country, 
building more small businesses, creating more jobs. And this 
would not be taking money away from small businesses. It would 
be helping to create more small businesses. And I think doing a 
pilot program, setting aside a little bit of money to do that, 
we would only go to universities, national labs that have 
proven that they have programs in place that have helped 
researchers to start-up companies. So we will have that. There 
is no reason to believe that they will be using this money 
unwisely. They will have to have a proven track record of what 
they have done, and then we can see, we can evaluate after the 
pilot program is done if it is has been successful.
    So again, I want to thank you, Chairman Hall, for your work 
on this legislation, and I just want to urge my colleagues to 
support this to help us create those small businesses that we 
all know are critical for our country. And I yield back.
    Chairman Hall. And the gentleman yields back, and I thank 
the gentleman for his input. And I know the gentleman's 
intention is sincere. I disagree with him that this is a small 
business bill, and it does take money from small businesses. I 
suggested universities, colleges are great to support, and I 
recognize the gentleman's knowledge about their needs and he 
represents his district well. But I disagree with him on 
whether this is a small business bill, and I don't think we 
ought to divert any of the funds otherwise.
    Is there anyone else who wants to be heard? All right. If 
not, we will vote on the amendment. Those in favor of the 
amendment say aye, those who oppose say no. Chair believes the 
no's have it.
    Mr. Lipinski. Mr. Chairman?
    Chairman Hall. The Chair recognizes a motion from----
    Mr. Lipinski. Ask for a recorded vote.
    Chairman Hall. Yes. A record vote is called for. The clerk 
will call the roll.
    The Clerk. Chairman Hall?
    Chairman Hall. Votes no.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    [No response.]
    The Clerk. Mr. Smith?
    [No response.]
    The Clerk. Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    [No response.]
    The Clerk. Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    Mr. Neugebauer. No.
    The Clerk. Mr. Neugebauer votes no.
    Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Broun?
    Dr. Broun. No.
    The Clerk. Mr. Broun votes no.
    Mrs. Adams?
    Mrs. Adams. Aye.
    The Clerk. Mrs. Adams votes aye.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell votes no.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    Mr. Brooks. No.
    The Clerk. Mr. Brooks votes no.
    Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    Mr. Hultgren. No.
    The Clerk. Mr. Hultgren votes no.
    Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Bucshon?
    [No response.]
    The Clerk. Mr. Benishek?
    Mr. Benishek. Aye.
    The Clerk. Mr. Benishek votes aye.
    Ms. Johnson?
    Ms. Johnson. Aye.
    The Clerk. Ms. Johnson votes aye.
    Mr. Costello?
    [No response.]
    The Clerk. Ms. Woolsey?
    Ms. Woolsey. Aye.
    The Clerk. Ms. Woolsey votes aye.
    Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Aye.
    The Clerk. Mr. Wu votes aye.
    Mr. Miller?
    Mr. Miller. Aye.
    The Clerk. Mr. Miller votes aye.
    Mr. Lipinski?
    Mr. Lipinski. Aye.
    The Clerk. Mr. Lipinski votes aye.
    Ms. Giffords?
    [No response.]
    The Clerk. Ms. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Ms. Edwards votes aye.
    Ms. Fudge?
    Ms. Fudge. Aye.
    The Clerk. Ms. Fudge votes aye.
    Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. Aye.
    The Clerk. Mr. McNerney votes aye.
    Mr. Sarbanes?
    Mr. Sarbanes. Aye.
    The Clerk. Mr. Sarbanes votes aye.
    Ms. Sewell?
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Clarke?
    Mr. Clarke. Yes.
    The Clerk. Mr. Clarke votes aye.
    Chairman Hall. Are there other members who wish to vote?
    Mr. Costello. Mr. Chairman? Costello votes aye.
    The Clerk. Mr. Costello votes aye.
    Chairman Hall. Are there others? The clerk will report roll 
call.
    The Clerk. Mr. Chairman, 16 members vote aye and 14 members 
vote no.
    Chairman Hall. The amendment is agreed to.
    
    
    Chairman Hall. Are there other amendments?
    Mr. Tonko. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. All right. The next amendment is offered by 
the gentleman from New York, and we just have three more to go, 
I think. Mr. Tonko, are you ready to proceed with your 
amendment?
    Mr. Tonko. Yes, I am, sir.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 035, amendment to H.R. 1425 
offered by Mr. Tonko of New York.
    Chairman Hall. The gentleman is recognized for five minutes 
to report the amendment.
    Mr. Tonko. Thank you, Mr. Chair. After meeting with many 
constituents and reviewing the National Academies' report on 
the SBIR program, it is clear to me we should be doing more at 
NIH to help all types of companies to commercialize their 
products that they have developed in the SBIR program at NIH.
    Most of the discussion about opening the entire SBIR 
program seems to be coming from companies that participate or 
would like to particulate in the SBIR program at NIH. To 
address the concerns of these companies, I have offered this 
amendment. It would create a pilot program within NIH. This 
program would provide funding to any SBIR Phase II recipient 
companies from 2007 through 2008 equal to their face to award 
through a competitive process for the purposes of 
commercialization. Funds would be awarded to eligible companies 
for the purpose of commercialization. A key process in the 
product development phase, this commercialization funding would 
enable the companies to quickly hire additional help and move 
their product to market. The valley of death is real, and the 
pilot program I have proposed here aims at eliminating that 
valley of death for SBIR companies awarded through NIH. Their 
success and developments to date are often credited to the SBIR 
program. However, this amendment would make the most important 
leap, taking the idea from a lab or research center and 
launching the product to market, creating real jobs and real 
economic growth. This concept originated with small businesses 
in my district which came to me with the desire to grow and 
create more jobs. They recognize and feel the pressure of the 
valley of death each and every day. This pilot program can be 
used to attempt a new, innovative approach. We use the years 
2007 and 2008 as a baseline because it is the products 
developed in these years that are ready to be commercialized 
today. I urge members of the Committee to support this 
amendment, Mr. Chair, and I yield back the balance of my time.
    Chairman Hall. The gentleman yields back the balance of his 
time, and I thank the gentleman. At a time when our Nation is 
facing very significant deficits, I think it is inappropriate 
to authorize such a large program that we have not fully 
examined. One of the strengths of H.R. 1425 is that it does not 
authorize any additional funding. Instead, the SBIR and STTR 
programs are funded through set-asides from existing agency 
research budgets. This amendment would add $538 million in new 
spending which we just can't afford at this time. I oppose this 
amendment and urge my colleagues to do so.
    Is there further discussion on the amendment? The Chair 
hears none. Hearing no further discussion, the vote occurs on 
the amendment. All in favor say aye----
    Mr. Tonko. Mr. Chair, I request a recorded vote, please.
    Chairman Hall. A recorded vote is requested. Let me finish 
with the first vote first.
    Mr. Tonko. Okay.
    Chairman Hall. All those in favor say aye. All those 
opposed say no. The no's have it.
    Mr. Tonko. Mr. Chair, I move for a recorded vote, please.
    Chairman Hall. Recorded vote is called. The clerk will 
please call the roll.
    The Clerk. Yes.
    Chairman Hall. In a hurry.
    The Clerk. Chairman Hall?
    Chairman Hall. No.
    The Clerk. Chairman Hall votes no.
    Mr. Sensenbrenner?
    [No response.]
    The Clerk. Mr. Smith?
    [No response.]
    The Clerk. Mr. Rohrabacher?
    Mr. Rohrabacher. No.
    The Clerk. Mr. Rohrabacher votes no.
    Mr. Bartlett?
    [No response.]
    The Clerk. Mr. Lucas?
    [No response.]
    The Clerk. Mrs. Biggert?
    Mrs. Biggert. No.
    The Clerk. Mrs. Biggert votes no.
    Mr. Akin?
    [No response.]
    The Clerk. Mr. Neugebauer?
    Mr. Neugebauer. No.
    The Clerk. Mr. Neugebauer votes no.
    Mr. McCaul?
    Mr. McCaul. No.
    The Clerk. Mr. McCaul votes no.
    Mr. Broun?
    Dr. Broun. No.
    The Clerk. Mr. Broun votes no.
    Mrs. Adams?
    Mrs. Adams. No.
    The Clerk. Mrs. Adams votes no.
    Mr. Quayle?
    Mr. Quayle. No.
    The Clerk. Mr. Quayle votes no.
    Mr. Fleischmann?
    Mr. Fleischmann. No.
    The Clerk. Mr. Fleischmann votes no.
    Mr. Rigell?
    Mr. Rigell. No.
    The Clerk. Mr. Rigell votes no.
    Mr. Palazzo?
    Mr. Palazzo. No.
    The Clerk. Mr. Palazzo votes no.
    Mr. Brooks?
    [No response.]
    The Clerk. Mr. Harris?
    Mr. Harris. No.
    The Clerk. Mr. Harris votes no.
    Mr. Hultgren?
    Mr. Hultgren. No.
    The Clerk. Mr. Hultgren votes no.
    Mr. Cravaack?
    Mr. Cravaack. No.
    The Clerk. Mr. Cravaack votes no.
    Mr. Bucshon?
    [No response.]
    The Clerk. Mr. Benishek?
    Mr. Benishek. No.
    The Clerk. Mr. Benishek votes no.
    Ms. Johnson?
    Ms. Johnson. Aye.
    The Clerk. Ms. Johnson votes aye.
    Mr. Costello?
    Mr. Costello. Aye.
    The Clerk. Mr. Costello votes aye.
    Ms. Woolsey?
    Ms. Woolsey. Aye.
    The Clerk. Ms. Woolsey votes aye.
    Ms. Lofgren?
    [No response.]
    The Clerk. Mr. Wu?
    Mr. Wu. Aye.
    The Clerk. Mr. Wu votes aye.
    Mr. Miller?
    Mr. Miller. Aye.
    The Clerk. Mr. Miller votes aye. Mr. Lipinski?
    Mr. Lipinski. Aye.
    The Clerk. Mr. Lipinski votes aye.
    Ms. Giffords?
    [No response.]
    The Clerk. Ms. Edwards?
    Ms. Edwards. Aye.
    The Clerk. Ms. Edwards votes aye.
    Ms. Fudge?
    Ms. Fudge. Aye.
    The Clerk. Ms. Fudge votes aye.
    Mr. Lujan?
    Mr. Lujan. Aye.
    The Clerk. Mr. Lujan votes aye.
    Mr. Tonko?
    Mr. Tonko. Aye.
    The Clerk. Mr. Tonko votes aye.
    Mr. McNerney?
    Mr. McNerney. Aye.
    The Clerk. Mr. McNerney votes aye.
    Mr. Sarbanes?
    Mr. Sarbanes. Aye.
    The Clerk. Mr. Sarbanes votes aye.
    Ms. Sewell?
    [No response.]
    The Clerk. Ms. Wilson?
    Ms. Wilson. Aye.
    The Clerk. Ms. Wilson votes aye.
    Mr. Clarke?
    [No response.]
    Chairman Hall. Are there other who wish to vote? The clerk 
report the vote, please.
    The Clerk. Mr. Chairman, 13 members vote aye and 15 members 
vote no.
    Chairman Hall. The amendment is not agreed to.
    
    
    Chairman Hall. Are there further amendments?
    Dr. Broun. Mr. Chairman?
    Chairman Hall. Dr. Broun, I recognize you for your 
amendment.
    Dr. Broun. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. The next amendment is amendment number 22, 
an amendment offered by the gentleman from Georgia. Are you 
ready to proceed with your amendment, sir?
    Dr. Broun. Yes, Mr. Chairman. The amendment is----
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 022, amendment to H.R. 1425 
offered by Mr. Broun of Georgia.
    Chairman Hall. I would ask unanimous consent to dispense 
with the reading. Without objection, it is so ordered. The 
gentleman from Georgia is recognized for five minutes to 
explain his amendment.
    Dr. Broun. Thank you, Mr. Chairman. My amendment will 
respond to recent reviews by the Inspectors General community 
which found that the SBIR and STTR programs were vulnerable to 
certain kinds of waste, fraud and abuse. While H.R. 1425 
already takes a number of positive steps to address these 
vulnerabilities, my amendment would add provisions to make it 
easier for SBIR agencies and other auditors to detect waste, 
fraud and abuse.
    The amendment would standardize several requirements which 
some agencies already require of the SBIR and STTR grant 
recipients, thus notably, the amendment requires applicants and 
awardees to certify the statements they make in their 
applications and reports. These certifications make it easier 
for law enforcement to hold accountable applicants who make 
false statements to win an SBIR awards or receive SBIR 
payments.
    My amendment makes a series of mostly technical changes to 
H.R. 1425's waste, fraud and abuse provisions. The purpose of 
these changes is to strengthen the bill's already robust waste, 
fraud and abuse provisions. Many of these suggestions have come 
from the Council of Inspectors General for integrity and 
efficiency working group that has been examining fraud in the 
SBIR and STTR programs.
    I would like to recognize Senators Grassley and Rockefeller 
for initiating a parallel amendment to the Senate legislation, 
and I hope that both Houses of Congress will include similar 
language prior to conferencing this legislation.
    I urge my colleagues to support improving mechanisms to 
detect and reduce waste, fraud and abuse in these programs and 
to support my amendment. Mr. Chairman, I yield back.
    Chairman Hall. The gentleman yields back, and I thank the 
gentleman for his amendment. I think it is a good addition to 
the bill. One of the most important duties we have as a 
Committee is to ensure proper oversight of the programs over 
which we have jurisdiction. This is the best way to ensure that 
vital taxpayer dollars are not wasted. I think this amendment 
will assist in ensuring that the SBIR and STTR programs are 
being properly administered at the federal agencies, and I 
support it. Are there others who wish to be heard?
    Ms. Edwards. Mr. Chairman?
    Chairman Hall. The Chair recognizes the gentlelady from 
Maryland.
    Ms. Edwards. Mr. Chairman, I have a second-degree amendment 
at the desk. It has been shared with the majority.
    Chairman Hall. All right. The clerk will distribute the 
amendment. Wait until we all get it. The clerk shall report the 
amendment.
    The Clerk. Amendment number 010, amendment offered by Ms. 
Edwards of Maryland to the amendment offered by Mr. Broun of 
Georgia.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading. Without objection, so ordered. The gentlelady is 
recognized for five minutes to explain her amendment.
    Ms. Edwards. Thank you, Mr. Chairman, and I want to thank 
and congratulate Dr. Broun, Mr. Broun, on his amendment. He has 
really taken up I think a really important area of accountable 
and transparency, and I join him in supporting these set of 
provisions. In fact, had he not offered them, I was looking 
also at what the Senate leaders have done and wanted to make 
sure that we did the same thing in the house. And so Mr. Broun, 
thank you.
    I am offering an amendment, and my intent is really to 
ensure that we entrust the enforcing and anti-fraud provisions 
of the program. The Inspectors General and Justice Department, 
we want to make sure that they have adequate tools to punish 
those who commit fraud against the government and taxpayer. We 
really should give credit to Senator Rockefeller who has done 
most of the lion's share work on fraud and misuse of SBIR 
grants, and the language that is offered today is almost 
identical to an amendment drafted by the Senators, but that 
shouldn't detract at all from our consideration of that here in 
the House and in this Committee.
    Credit also has to go to the Inspectors General at the 
National Science Foundation and NASA, particularly Allison 
Lerner, the NSF IG has been a leading voice on the need to 
insert a lot more managerial rigor into the SBIR program, and I 
am happy to follow their advice on how to proceed.
    According to the National Science Foundation Inspector 
General, one issue that has been particularly vexing is a lack 
of ongoing certification by the SBIR recipients, that they are 
doing the work they applied to do and that they are not 
basically double-dipping, duplicating funding from other 
agencies. The NSF already requires such certifications in their 
applications for Phase I and Phase II awards, as well as at the 
time of interim and final reports. And the question is, do we 
require those same sort of certifications so that we strengthen 
the hands of enforcement authorities to make sure that they are 
able to actually prosecute waste, fraud and abuse when it 
occurs? And what we have heard from both the Inspectors General 
and from the Department of Justice is that they lack that tool 
and lacking the certification where the recipient would have to 
check off a certain amount of boxes, not anything that is 
particular onerous indicating that they are not double-dipping, 
that they are not submitting for duplicate funds, in that 
certification process. Then when the prosecutor finds that 
there might be waste, fraud or abuse or the Inspector General 
does, there is some teeth in terms of enforcing the 
requirements of the grant.
    And so NSF, the IG, they have a report on this, and they 
found that without that certification and agency's requiring, 
the Justice Department is actually reluctant to pursue fraud 
cases. And that is the purpose of this amendment, is to require 
the certification, require the recipient to check off the boxes 
in the normal SBIR process so it is no anymore onerous. It is a 
one-sheet form of certifications, and then that gives the 
enforcement authorities the tools that they need in case there 
is fraud going on.
    So I offer the amendment in the spirit of actually 
perfecting Dr. Broun's well-intentioned provision, and my 
language that has been worked out with the Inspector General 
makes it clear that the new rules on certification will require 
certification at every stage of a project and that the 
certifications will include attestations that the people and 
firms paid to do the work are actually doing the work for which 
they submitted, and they provide a firm disclosure if they have 
pursued or are pursing funding from other agencies for the same 
or similar work.
    And so I want to thank you very much, and I know that many 
members might be concerned. Some members might be concerned 
that it adds to the burden, but it can already be a part of the 
SBIR process, and NSF has found that, you know, you have the 
form in there, the certification is done and then the grant is 
pursued.
    And so I would appreciate consideration of this amendment 
to an already really strong set of provisions, and I hope that, 
Dr. Broun, you would accept it and that members of the 
Committee would, and with that I yield.
    Chairman Hall. The gentlelady yields, and I thank her for 
her statement. I appreciate the gentlelady's desire to add to 
the content of Dr. Broun's amendment with a second-degree 
amendment. However, as we have only just received this 
amendment during the markup, I am inclined to oppose this 
amendment as members are not being provided enough time to 
review the contents and implications of the gentlelady's 
amendment to Dr. Broun's amendment. We attempt to avoid last-
minute situations like these by the use of a roster, knowing 
that members do have the ability to craft second-degree 
amendments at any point during the markup. Committee policy and 
the spirit of comity dictates that the members be provided 
sufficient time to review, inquire about and research language 
to be adopted by the underlying bill. As the gentlelady's 
amendment is time-stamped 5:34 p.m. last evening, it would have 
gone a long way to the cooperative process had the Republican 
Committee staff and Dr. Broun's staff been apprised of the 
gentlelady's desire to add to Dr. Broun's amendment. Because I 
am concerned about including language not fully vetted by the 
members, I would ask that the gentlelady withdraw her amendment 
and possibly work with Dr. Broun prior to this bill going to 
the Floor. I yield back my time.
    Ms. Edwards. Mr. Chairman?
    Chairman Hall. I beg your pardon? Ms. Edwards?
    Ms. Edwards. Mr. Chairman, let me just say I really 
appreciate that, and I would be willing to withdraw it and work 
with Dr. Broun, you know, just because of logistics between Dr. 
Broun and myself. I only had a chance to actually speak with 
him this morning and then fully intended to do that yesterday, 
but we were unable to have that conversation. And so I 
appreciate that, and I think that this is consistent with Dr. 
Broun's approach and would look forward to working with him, 
withdrawing the amendment and making sure that it could be 
included.
    Chairman Hall. I don't question your genuine sincerity. Dr. 
Broun, I recognize you for an acceptance of this gentlelady's 
suggestion which I suggest you accept.
    Dr. Broun. Mr. Chairman, I accept your suggestion to accept 
the lady's suggestion that she and I work together. And in 
fact, she and I work together on about a lot of issues. She is 
my ranking member on my O&I Subcommittee. I have a tremendous 
respect for her and enjoy working with her. And I do look 
forward to working the details out with this.
    The secondary amendment actually just lists the 
certification process whereas the amendment itself would put in 
place the certification. But this just enumerates what those 
certifications are, and I am very eager to work with the lady 
from Maryland to work this out so it is to everyone on the 
Committee's satisfaction. So I agree.
    Chairman Hall. I thank the gentleman. The gentlelady has 
withdrawn her second-degree amendment, 0.10. Is there further 
discussion on the amendment offered by the gentleman from 
Georgia? Hearing none, the vote occurs on the amendment. All in 
favor say aye, those opposed say no. The yeas have it. The 
amendment is agreed to.
    Are there any other amendments?
    Mr. Lujan. Mr. Chairman?
    Chairman Hall. For what purpose does the gentleman seek 
recognition?
    Mr. Lujan. Mr. Chairman, I have an amendment at the desk.
    Chairman Hall. The next amendment is offered by the 
gentleman from New Mexico, Mr. Lujan. Are you ready to proceed 
with your amendment?
    Mr. Lujan. Yes, Mr. Chairman.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 018, amendment to H.R. 1425 
offered by Mr. Lujan of New Mexico.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading. Without objection, it is so ordered. I recognize the 
gentleman from New Mexico for five minutes.
    Mr. Lujan. Thank you, Mr. Chairman. This amendment would 
add the STTR program to the National Research Council's ongoing 
study. Following the agreement between myself and Chairman 
Quayle at the Subcommittee markup, our offices worked together 
and we came up with language that would be acceptable to both 
the majority and the minority.
    A study of the STTR program is long overdue. The most 
recent examination of the STTR program was a 2001 GAO report 
which was used for the 2001 reauthorization of the program. 
However, the report was based off of 102 Phase II projects from 
1995 to 1997, only the first three years of this project. So 
the past 14 years of STTR awards experience was left 
unexamined. I think it is important that we look at it.
    It is imperative that a study of this program be performed 
as part of our Congressional oversight, and I thank Chairman 
Quayle and the Committee staff for their cooperation in 
drafting acceptable language, and I urge adoption of this 
amendment. Mr. Chairman, I yield back.
    Chairman Hall. I thank the gentleman, and I certainly thank 
the gentleman from New Mexico for his interest in evaluating 
the STTR program and appreciate that we were able to work 
between Subcommittee and Full Committee, and I think that is 
the understanding of the Chairman of the Subcommittee on an 
amendment establishing strong evaluation mechanisms for the 
program. I am pleased to support the gentleman's amendment.
    Is there further discussion? The Chair hears none, so at 
this time all in favor of the amendment say aye, those opposed 
say no. The ayes have it, and the amendment is agreed to.
    Are there further amendments?
    Mr. Rohrabacher. Mr. Chairman, I have an amendment at the 
desk.
    Chairman Hall. The gentleman from California has an 
amendment. Are you ready to proceed, Mr. Rohrabacher?
    Mr. Rohrabacher. I am.
    Chairman Hall. The clerk will report the amendment.
    The Clerk. Amendment number 014, amendment to H.R. 1425 
offered by Mr. Rohrabacher of California.
    Chairman Hall. I ask unanimous consent to dispense with the 
reading. Without objection, it is so ordered.
    Mr. Rohrabacher. Mr. Chairman, may I describe what my 
amendment is?
    Chairman Hall. I recognize you for five minutes. If you 
can't describe it in five minutes, I will consider five 
minutes.
    Mr. Rohrabacher. All right. Well, we have had the debate a 
little bit earlier on this idea of lists. My amendment would 
modify language offered in subcommittee by Representative Lujan 
which states that federal agencies shall encourage SBIR and 
STTR applications from a number of different types of small 
businesses. The current list includes small businesses located 
in rural areas with high unemployment, small businesses owned 
by women, veterans or minorities and my amendment would add 
small businesses owned and operated by individuals with 
disabilities. As I mentioned earlier with the earlier debate, I 
would prefer not having lists. It seems to me that we should be 
encouraging people who are struggling to improve their lives 
regardless of their race, regardless of their sex. That makes 
every sense to me and certainly trying to give someone a 
preference in reaching out to people who are of a race or sex 
that is being targeted for helping or whatever to try to give a 
helping hand, if those particular women or those particular 
minority people happen to be from wealthy families, we aren't 
doing anybody any justice.
    So I would prefer no lists at all. But if we have to have 
lists, putting people with disabilities on that list is the one 
that really makes sense because someone with a disability, 
whether they are a woman or a minority, those people have a 
personal struggle that they have to go through in order to 
succeed in the business world and in small business, et cetera, 
and in this innovative world that we are trying to promote.
    So while my amendment seeks to promote a broader pool of 
applicants for the agencies involved, I think that if we are 
going to do that, let us put people with disabilities on that 
list. With that, I yield back the balance of my time.
    Chairman Hall. The gentleman yields back his time. I thank 
the gentleman for his amendment. I think it is a good addition 
to the bill. I share the gentleman's concern about leaving 
people out and creating lists. It might tend to ignore an 
important group that needs assistance. I think the gentleman 
has highlighted one such group with his amendment. And it is my 
hope that the agencies would try to encourage applications from 
as many diverse individuals as possible. We never know where 
the next great ideas in innovation will come from. That is what 
makes us a great country. I support the gentleman's amendment, 
and I urge my colleagues to do the same.
    Ms. Johnson. Question.
    Chairman Hall. Does anyone else seek recognition?
    Ms. Johnson. Yes.
    Chairman Hall. The gentlelady from Dallas, I recognize you 
for five minutes.
    Ms. Johnson. Thank you very much. This amendment is 
intended to stand alone and not include any other language? 
Initially?
    Mr. Rohrabacher. Yes.
    Ms. Johnson. Okay. Of course, there is no other language in 
the bill. I was wondering. Your initial statement was added to 
the other.
    Chairman Hall. The gentlelady yield back?
    Ms. Johnson. Yes, I yield back.
    Chairman Hall. The gentlelady yields back. Are there others 
seeking? All right. Hearing no other, the vote occurs on the 
amendment. All in favor say aye, those who oppose say no. The 
ayes have it. The ayes have it, and the amendment is agreed to.
    Are there other amendments? Hearing none, the question is 
on the bill H.R. 1425, the Creating Jobs Through Small Business 
Innovation Act of 2011 as amended. All those in favor will say 
aye. All those opposed say no. In the opinion of the Chair, the 
ayes have it. The ayes have it. I will now recognize myself for 
a motion on the bill. I move that the Committee favorably 
report H.R. 1425 as amended to the House with the 
recommendation that the bill do pass. Furthermore, I move that 
staff be instructed to prepare the legislative report and make 
necessary technical and conforming changes and that the 
Chairman take all necessary steps to bring the bill before the 
House for consideration.
    The question is on the motion to report the bill. Those in 
favor say aye, those opposed say no. The ayes have it, and the 
resolution is supported. Without objection, the motion to 
reconsider is laid upon the table. Members may have two 
subsequent calendar days in which to submit supplemental 
minority or additional views on the measure with receipt of 
such by 10:00 a.m. Monday, May the 9th. I move pursuant to 
Clause 1 of Rule 22 of the Rules of the House of 
Representatives that the Committee authorizes the Chairman to 
offer such motions as may be necessary in the House to adopt 
and pass H.R. 1425, the Creating Jobs Through Small Business 
Innovation Act of 2011 as amended. Without objection, it is so 
ordered.
    This concludes our Full Committee markup. The Chairman 
declares this Full Committee adjourned.
    [Whereupon, at 12:37 p.m., the Committee was adjourned.]
                               Appendix:

                              ----------                              


        H.R. 1425, Section-by-Section Analysis, Amendment Roster






                     Section-by-Section Analysis of
 H.R. 1425, CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011

Section By Section Description

                               I. Purpose

    The purpose of H.R. 1425, sponsored by Rep. Renee Ellmers (R-NC 2), 
and co-sponsored by Rep. Jason Altmire (D-PA 4), Rep. Judy Biggert (R-
IL 13), Rep. Howard Coble, (R-NC 6), Rep. Sam Graves (R-MO 6), Rep. 
Ralph Hall (R-TX 4), Rep. Eddie Bernice Johnson (D-TX 30), Rep. Daniel 
Lipinski (D-IL 3), Rep. Benjamin Quayle (R-AZ 3), Rep. Cedric L. 
Richmond (D-LA 2), and Rep. David Wu (D-OR 1), is to reauthorize the 
Small Business Innovation Research (SBIR) and Small Business Technology 
Transfer (STTR) programs.

                II. Background and Need for Legislation

    The Small Business Innovation Research (SBIR) program was 
originally established when the Congress passed the Small Business 
Innovation Development Act in 1982 (P.L. 97-219).
    The original objectives of the SBIR program included:

    Stimulation of technological innovation in the small business 
sector;

    Increased use of the small business sector to meet the 
government's research and development (R&D) needs;

    Additional involvement of minority and disadvantaged individuals 
in the process; and

    Expanded commercialization of the results of federally funded R&D.

    The 1992 SBIR reauthorization (P.L. 102-564) placed greater 
emphasis on the objective of commercialization of SBIR projects.
    Current law requires that every federal department with an 
extramural R&D budget of $100 million or more establish and operate an 
SBIR program. Eleven federal departments have SBIR programs, including 
the Departments of Agriculture, Commerce, Defense, Education, Energy, 
Health and Human Services, Homeland Security, and Transportation; the 
Environmental Protection Agency, the National Aeronautics and Space 
Administration (NASA); and the National Science Foundation (NSF). Under 
the program, each qualifying federal department is mandated to set 
aside 2.5 percent of its applicable extramural R&D for the SBIR 
program. Cumulatively, the SBIR program makes almost $2 billion in 
awards to small businesses annually.
    The Small Business Technology Transfer (STTR) program was created 
in 1992 to provide federal R&D funding for research proposals that are 
developed and executed cooperatively between a small firm and a 
scientist in a nonprofit research organization, and fall under the 
mission requirements of the federal funding agency.
    Federal departments with annual extramural research budgets over $1 
billion must set aside 0.3 percent for STTR programs. Currently, the 
Departments of Energy, Defense, and Health and Human Services, as well 
as NASA and NSF participate in the STTR program. Across the 
participating agencies, approximately $800 million in STTR awards are 
made annually.
    The SBIR and STTR programs have been operating under temporary 
extensions since their authorizations expired in 2008 and 2009, 
respectively.
    H.R. 1425 will reauthorize the SBIR and the STTR programs through 
Fiscal Year 2014.
    This bill will increase the size guidelines for award amounts for 
Phase I and Phase II SBIR and STTR awards, will enable majority venture 
capital backed firms to participate in the program, and will improve 
evaluation of the programs through greater data collection, sharing of 
best practices, and increased efforts to prevent fraud, waste, and 
abuse.
    H.R. 1425 has been referred on April 7, 2011 to the Committee on 
Science, Space, and Technology, and in addition to the Committee on 
Small Business, and the Committee on House Armed Services.
                       III. Subcommittee Actions
    The Technology and Innovation Subcommittee held a hearing on March 
31, 2011 entitled ``The Role of Small Business in Innovation and Job 
Creation: The SBIR and STTR Programs.'' The purpose of the hearing was 
to examine the role of the Small Business Innovation Research (SBIR) 
and the Small Business Technology Transfer (STTR) Programs in promoting 
innovation.
    The Committee received testimony from: Dr. Sally Rockey, Deputy 
Director for Extramural Research at the National Institutes of Health; 
Dr. Donald Siegel, Dean and Professor at the School of Business, 
University at Albany, State University of New York, and a Member of the 
research team for the Committee for Capitalizing on Science, 
Technology, and Innovation, National Research Council of the National 
Academies; Mr. Mark Crowell, Executive Director and Associate Vice 
President for Innovation Partnerships and Commercialization at the 
University of Virginia; Mr. Doug Limbaugh, Chief Executive Officer of 
Kutta Technologies; and Ms. Laura McKinney, President and Chief 
Executive Officer of Galois, Inc.
    Witnesses discussed their experience with the SBIR and STTR 
Programs and provided advice on areas of potential improvement as the 
Committee is currently considering reauthorization of these programs.
    The Subcommittee on Technology and Innovation met to consider H.R. 
1425 on April 13, 2011.
    The Subcommittee considered seven amendments, and approved four.
    An amendment offered by Mr. Wu to extend the authorization through 
Fiscal Year 2016 was not agreed to by voice vote.
    An amendment offered by Mr. Lipinski to direct civilian agencies 
making awards in the SBIR and STTR commercialization pilot program to 
consider whether the technology to be supported by the awards is likely 
to be manufactured in the United States was agreed to by voice vote.
    An amendment offered by Mr. Quayle to ensure that applications for 
SBIR or STTR awards at the National Institutes of Health (NIH) and the 
National Science Foundation (NSF) undergo standard agency peer review 
process was accepted by voice vote.
    An amendment offered by Ms. Wilson to authorize $10 million 
annually for the Small Business Administration to award grants to 
organizations that provide outreach and application assistance to 
underrepresented business groups was defeated by a recorded vote of 
four yeas and nine nays.
    An amendment offered by Mr. Lipinski that requires the evaluation 
by the National Academies to estimate the number of jobs created ``in 
the United States,'' as opposed to just the number of jobs created was 
agreed to by voice vote.
    An amendment by Mr. Lujan to conduct a comprehensive study and 
report by the National Academies of the STTR program was withdrawn.
    An amendment by Mr. Lujan requiring federal agencies to encourage 
applications under the SBIR and STTR programs from underrepresented 
business groups was agreed to by voice vote.
    The bill, as amended, was agreed to by voice vote, and was 
favorably reported to the full Committee by voice vote.

                    IV. Section-by-Section Analysis
 H.R. 1425, Creating Jobs Through Small Business Innovation Act of 2011

         Title 1-Reauthorization of the SBIR and STTR Programs

Sec. 101. Extension Length This section extends the SBIR and STTR 
                    programs for three years until September 30, 2014.

Sec. 102. SBIR and STTR Award Levels This section increases the size of 
                    SBIR and STTR awards from $100,000 to $150,000 for 
                    Phase I and from $750,000 to $1 million for Phase 
                    II, and requires the SBA to make annual adjustments 
                    of the award sizes for inflation. The provision 
                    prohibits any agency from issuing an SBIR or STTR 
                    award if the size of the award exceeds the award 
                    guidelines established in this section by more than 
                    50 percent. Finally, the provision requires federal 
                    agencies to maintain the following information on 
                    awards exceeding the award guidelines: the award 
                    amount; a justification for exceeding the 
                    guidelines; the identity and location of the 
                    recipient; and whether or not the recipient firm 
                    received venture capital, hedge fund, or private 
                    equity firm investment; and if so, whether or not 
                    it is majority owned and controlled by one or more 
                    venture capital companies, hedge funds, or private 
                    equity firms. Nothing shall prevent a Federal 
                    agency from supplementing an award under the SBIR 
                    or STTR programs with Federal funds that are 
                    outside of the SBIR and STTR allocations.

Sec. 103. Agency and Program Flexibility

    The section allows SBIR and STTR applicants to receive awards for 
subsequent SBIR or STTR phases at another agency and also allows small 
business concerns, which received SBIR or STTR awards, to receive 
awards for subsequent phases in either the STTR or SBIR program, 
respectively.

Sec. 104. Elimination of Phase II Invitations

    This section requires that federal agencies conduct their 
solicitation of Phase II SBIR and STTR proposals without any 
invitation, pre-screening, pre-selection, or down-selection process 
between the first and second phase.

Sec. 105. Phase Flexibility

    This section grants agencies the ability to provide a Phase II 
Award if the Agency finds that the small business concern has already 
completed the work typically done during Phase I.

Sec. 106 and Sec. 107. Participation by Firms with Substantial 
                    Investment from Multiple Venture Capital Operating 
                    Companies in a Portion of the SBIR Program

    Section 106 allows the Departments of Health of Human Services and 
Energy and the National Science Foundation to permit firms majority 
owned and controlled by one or more venture capital companies, one or 
more hedge funds, or one or more private equity firms to compete for up 
to 45 percent of the Agency's SBIR funds. All other qualifying federal 
agencies shall allow majority owned private investment backed small 
businesses to compete for up to 35 percent of the agency's SBIR funds. 
Sec. 107 defines what affiliations are between various outside 
investors (such as venture capital companies, private equity firms, 
etc.) and small business concerns for purposes of determining whether 
the combination is eligible for an award under the SBIR program.

Sec. 108. SBIR and STTR Special Acquisition Preference

    This section codifies the language from the SBIR and STTR Policy 
Directives confirming the intent of Congress to establish a special 
acquisition preference for SBIR and STTR Phase III awards. The 
provision clarifies that preference for contracts concerning research 
developed with SBIR or STTR funds should go to the developers and 
holders of SBIR and STTR technologies to the greatest extent 
practicable.

Sec. 109. Collaborating with Federal Laboratories and Research and 
                    Development Centers

    This section reduces the burden on cooperation between SBIR/STTR 
firms and federal laboratories by ensuring that such subcontracting is 
generally permitted without the requirement for a waiver. The provision 
also ensures that subcontracting to federal laboratories is not 
required of SBIR or STTR awardees. Finally, it clarifies that firms 
that have entered into a cooperative agreement with a federal 
laboratory are eligible to receive SBIR/STTR awards.

Sec. 110. Notice Requirement

    This section ensures that the SBA is notified any time the SBIR or 
STTR policy directives are challenged in court.

Sec. 111. Additional SBIR and STTR Awards

    The section allows SBIR and STTR applicants to receive one 
sequential Phase II award for a single project. It also requires 
agencies to verify that any activity to be performed with respect to a 
project with a Phase I and Phase II award has not been funded from 
another Federal agency.

          Title II-Commercialization and Outreach Initiatives

Sec. 201. Technical assistance for awardees

    This section increases the amount of discretionary technical 
assistance that SBIR and STTR agencies can contract out to provide to 
awardees from $4,000 to $5,000 for Phase I awards and from $4,000 to 
$5,000 per year for Phase II awards. The provision also states that 
this amount shall be in addition to the amount of the recipient's 
award. It also requires agencies to provide SBIR and STTR award winners 
who wish to procure their own technical assistance with the allowable 
amount. Finally, the provision prohibits the agencies from using these 
funds to pay its contractor for technical assistance for SBIR or STTR 
awardees unless the contractor provides the technical assistance 
directly to the awardee designated by the award.

Sec. 202. Commercialization Readiness Program at Department of Defense

    This section extends the SBIR Commercialization Pilot Program (CPP) 
at the Department of Defense permanently and extends it to the 
Department's STTR program. It also changed the name to the 
Commercialization Readiness Program (CRP). The provision authorizes the 
Secretary of Defense to establish goals for transitioning Phase III 
technologies in subcontracting plans for contracts of $100 million or 
more. The provision also requires the Secretary of Defense to set a 
goal to increase the number of Phase II contracts that lead to 
technology transition into programs of record or fielded systems and to 
use incentives to encourage agency program managers and prime 
contractors to meet that goal. Finally, the provision includes 
reporting requirements on the status of projects funded through CRP.

Sec. 203. Commercialization Readiness Pilot Program for Civilian 
                    Agencies

    This section authorizes agencies other than the Department of 
Defense to create Commercialization Readiness Pilot Programs (using no 
more than ten percent of their program authorization) to support 
advanced development of small business technologies which are facing 
high manufacturing or regulatory costs. The provision authorizes these 
agencies to grant post-Phase II awards up to two times the regular size 
(up to $3 million). This section directs agencies making awards under 
this program to consider whether the technology to be supported by the 
award is likely to be manufactured in the United States. Authority to 
establish such a pilot program expires at the end of FY 2014.

Sec. 204. Interagency Policy Committee

    This section directs the Office of Science and Technology Policy to 
establish an SBIR/STTR Interagency Policy Committee to review and make 
policy recommendations on ways to improve the effectiveness and 
efficiency of the SBIR and STTR programs.

Sec. 205 Clarifying Definition of Phase III

    This section revises the definition of ``Phase III'' of the SBIR 
program so that it is clear that such work shall be directed toward 
commercial applications and derives from research and development 
completed in earlier phases.

Sec. 206. Shortened Period for Final Decisions on Proposals and 
                    Applications

    This section requires that not later than 90 days after, and if the 
Administrator authorizes an extension, then not later than 180 days, 
from the date on which the solicitation closes for SBIR and STTR 
programs, that the Administrator make a decision on each proposal 
submitted. This section specifies that the Director of the National 
Institutes of Health (NIH) and the Director of the National Science 
Foundation (NSF) may make an award under the SBIR or STTR programs only 
if an application for award undergoes a technical and scientific peer 
review.

                   Title III-Oversight and Evaluation

Sec. 301. Streamlining Annual Evaluation Requirements

    This section requires the Administration to report at least 
annually to Congress the number of proposals received from firms with 
venture capital, private equity, or hedge fund investment, including 
those owned and controlled by multiple venture capital, private equity, 
or hedge fund firms. It also requires the Administration to report on 
efforts to increase outreach to firms owned and controlled by women and 
socially or economically disadvantaged individuals, the implementation 
and compliance with the allocation of funds for firms majority owned 
and controlled by multiple venture capital, private equity or hedge 
fund companies, and appeals of Phase III awards and notices of 
noncompliance with the SBIR and the STTR Policy Directives. Finally, 
the section requires the Administration to coordinate the 
implementation of electronic databases at the participating agencies.

Sec. 302. Data Collection From Agencies for SBIR

    This section requires agencies with an SBIR program to collect data 
annually on several issues including: whether or not an applicant 
business or awardee has venture capital, private equity or hedge fund 
investment; if an applicant business is majority owned and controlled 
by multiple venture capital, private equity, or hedge fund firms; the 
amount of that outside capital it has received at the time of award; if 
an applicant business has foreign investors and who they are; if an 
applicant business is owned by a woman or by a socially or economically 
disadvantaged individual, and finally, whether an applicant has a 
university affiliation. The provision also requires agencies to justify 
awards given that exceed the statuary guidelines. Agencies must collect 
data and report annually on whether or not the award winner is from a 
state receiving less federal research funding for small businesses than 
a majority of other states.

Sec. 303. Data Collection From Agencies for STTR

    This section requires agencies with an STTR program to collect data 
annually on several issues including: whether or not an applicant 
business or awardee has venture capital, private equity or hedge fund 
investment; if an applicant business is majority owned and controlled 
by multiple venture capital, private equity, or hedge fund firms; the 
amount of that outside capital it has received at the time of award; if 
an applicant business has foreign investors and who they are; if an 
applicant business is owned by a woman or by a socially or economically 
disadvantaged individual, and finally, whether an applicant has a 
university affiliation. The provision also requires agencies to justify 
awards given that exceed the statutory guidelines.

Sec. 304. Public Database

    This section requires that the public database maintained by the 
Administrator include information on whether or not a firm receiving an 
award has venture capital, private equity or hedge fund investment, is 
majority owned and controlled by multiple venture capital, private 
equity, or hedge fund firms, the amount of outside capital it has 
received at the time of award, if it is owned by a woman or by a 
socially or economically disadvantaged individual, or if it has a 
university affiliation.

Sec. 305. Government Database

    This section requires that the government database maintained by 
the Administrator in coordination with the agencies for the purposes of 
evaluation of the SBIR and STTR programs include information on the 
ownership structure and affiliations of awardee firms that have venture 
capital, private equity, or hedge fund investment, and that are 
majority owned and controlled by multiple venture capital, private 
equity, or hedge fund firms, whether or not a firm is owned by a woman, 
is owned by a minority, or has a university affiliation.

Sec. 306. Accuracy in Funding Base Calculations

    This section requires the Comptroller General of the United States 
to conduct an audit of the SBIR and STTR programs to determine whether 
federal agencies are complying with the expenditure requirements.

Sec. 307. Continued Evaluation by the National Academy of Sciences

    This section authorizes the National Academy of Sciences to 
continue its evaluation of the SBIR program through the end of fiscal 
year 2021 and requires that updates of the studies be provided to 
Congress every four years from the date of enactment. This section 
requires the National Research Council (NRC) to estimate the number of 
jobs created in the United States as a result of the SBIR and STTR 
programs.

Sec. 308. Technology Insertion Reporting Requirements

    This section requires the Administration to include in its annual 
report to Congress information on Phase III awards issued by SBIR and 
STTR agencies, including the dollar amount of these awards, their 
recipients, and the name of the agency or the component of the agency 
issuing them.

Sec. 309. Obtaining Consent from SBIR and STTR Applicants to Release 
                    Contact Information to Economic Development 
                    Organizations

    This section requires each Federal agency that conducts an SBIR or 
STTR program to enable small business concerns that are SBIR or STTR 
applicants to indicate whether that Federal agency has consent to 
identify the small business concern to local and State-level economic 
development organizations.

Sec. 310. Pilot to Allow Funding for Administrative, Oversight, and 
                    Contract Processing Costs

    This section requires that the Administrator allow each Federal 
agency to not use more than three percent of the funds allocated to the 
SBIR programs for the first fiscal year beginning after the enactment 
of this subsection, and each year thereafter through fiscal 2014, for 
costs relating to administrative, oversight, and contract processing 
activities for SBIR programs that the Federal agency was not carrying 
out the last full fiscal year before the enactment of this subsection, 
as well as for the period of three years after the enactment of this 
subsection, for the implementation of commercialization and outreach 
initiatives that were not in effect on the date of the enactment of 
this subsection.

Sec. 311. GAO Study with Respect to Outside Investment Involvement

    This section requires that not later than two years after the date 
of the enactment of this Act, and every two years thereafter, the 
Comptroller General of the United States conduct a study on the impact 
of requirements relating to venture capital operating company, private 
equity firm, and hedge fund involvement in the SBIR and STTR programs.

Sec. 312. Reducing Vulnerability of SBIR and STTR Programs to Fraud, 
                    Waste, and Abuse

    This section requires the Administrator to, not later than 90 days 
after the enactment of this Act, amend the SBIR Policy Directive and 
the STTR Policy Directive to include measures to prevent fraud, waste, 
and abuse. Critical provisions include:

    Requiring Inspectors General of participating SBIR/STTR federal 
agencies to establish fraud detection measures, coordinate fraud-
related information sharing between agencies, and provide fraud 
prevention-related education and training to agencies administering the 
program;

    Requiring the Small Business Administrator to amend the SBIR and 
STTR Policy Directives to include specific measures to prevent fraud, 
waste, and abuse;

    Creating a special SBIR/STTR telephone hotline that allows 
individuals to report fraud, waste, and abuse;

    Ordering the Government Accountability Office (GAO) to conduct a 
study assessing the effectiveness of federal agencies in combating 
fraud, waste, and abuse in the SBIR and STTR programs.

Sec. 313. Simplified Paperwork Requirements

    This section directs the SBA Administrator to issue regulations or 
guidelines to (the extent possible) standardize SBIR and STTR 
application paperwork.

                       Title IV-Policy Directives

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

    This section requires conforming amendments to the SBA's SBIR and 
STTR Policy Directives within 180 days to implement the provisions of 
this Act. It also requires that the Administration publish the SBIR and 
STTR Policy Directives in the Code of Federal Regulations within 180 
days.

                        Title V-Other Provisions

Sec. 501. Report on SBIR and STTR Program Goals

    This provision directs each federal agency required to participate 
in an SBIR or STTR program to: (1) develop metrics in conjunction with 
the Interagency Policy Committee described in Sec. 204 to evaluate the 
effectiveness and benefit of such program; (2) conduct an annual 
evaluation of their program using such metrics; and (3) report 
evaluation results annually to the Administrator and the relevant 
Congressional Committees.

Sec. 502. Competitive Selection Procedures for SBIR and STTR Programs

    This section requires all SBIR or STTR funds to be awarded pursuant 
to competitive and merit-based selection procedures.

Sec. 503. SBA Regulations on Loan Restrictions

    This section requires the SBA to develop regulations solely for 
purposes of the SBIR program that when or how restrictive covenants in 
loan agreements would constitute control for purposes of affiliation.

Sec. 504 Program Diversification

    This section requires federal agencies to encourage applications 
from small business concerns located in rural areas, areas 
underrepresented in SBIR and STTR programs, and areas with unemployment 
rates greater than the national average, as well as business concerns 
owned or controlled by women, veterans, and minorities.





                                  
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