[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19704-19706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06870]


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SMALL BUSINESS ADMINISTRATION

RIN 3245-AI02


Small Business Innovation Research Program and Small Business 
Technology Transfer Program Policy Directive

AGENCY: Small Business Administration.

ACTION: Notice of technical amendments; request for comments.

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SUMMARY: The Small Business Administration is amending the Small 
Business Innovation Research (SBIR) and Small Business Technology 
Transfer (STTR) programs Policy Directive to incorporate a template for 
agencies participating in the SBIR or STTR programs (Participating 
Agencies) to request the disclosure of statutorily required information 
from SBIR or STTR applicants.

DATES: These revisions to the SBIR/STTR Policy Directive take effect on 
May 3, 2023, without further action, unless significant adverse comment 
is received by May 3, 2023. If significant adverse comment is received, 
SBA will publish a timely withdrawal of the notice in the Federal 
Register.

ADDRESSES: You may submit comments, identified by number SBA-XXX-XXXX, 
through the Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    SBA will post all comments on www.regulations.gov. Please do not 
submit confidential business information (CBI) as defined in the User 
Notice at www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: Erick Page-Littleford at (202) 718-
7738 or [email protected].

SUPPLEMENTARY INFORMATION: 

I. Executive Summary

    The mission of the Small Business Innovation Research (SBIR) and 
Small Business Technology Transfer (STTR) programs is to engage small 
business concerns (SBCs) to support scientific excellence and 
technological innovation through the investment of Federal research and 
research and development (R/R&D) funding in critical American 
priorities to build a strong national economy. Both programs follow a 
three-phase process throughout the Federal Government to solicit 
proposals and award funding agreements for R/R&D: Phase I, Phase II, 
and Phase III.
    Section 9 of the Small Business Act (the Act), 15 United States 
Code (U.S.C.) 638(j) and (p), requires that the Small Business 
Administration (SBA) issue a policy directive setting forth guidance to 
the Participating Agencies. The SBIR and STTR (SBIR/STTR) Policy 
Directive outlines how agencies must generally conduct their programs. 
Each Participating Agency, however, may tailor its program to meet the 
needs of the individual Agency, as long as the general principles of 
the program set forth in the Act and directive are followed. Therefore, 
when incorporating SBIR/STTR policy into agency-specific regulations 
and procedures, Participating Agencies may develop and apply processes 
needed to implement the policy effectively; however, no Participating 
Agency may develop and apply policies, directives, or clauses that 
contradict, weaken, or conflict with the policy as stated in the Policy 
Directive.
    SBA reviews its SBIR/STTR Policy Directive regularly to determine 
areas that need updating and further clarification. The SBIR and STTR 
Extension Act of 2022 (Extension Act), Public Law 117-183 (Sep. 30, 
2022), amended section 9 of the Act; 15 U.S.C. 638(g)(13)-(17), 
(o)(17)-(21), and (vv), to require small businesses applying for SBIR 
or STTR awards to disclose information about the applicant's investment 
and foreign ties. SBA is amending Section 9(a) of the Policy Directive 
and adding an appendix to address responsibilities of Participating 
Agencies to collect disclosures of information about the applicant's 
investment and foreign ties, as required by the Extension Act. This 
amendment provides a common template, based on the statutory language 
in the Act, to uniformly capture the required disclosures. This action 
is designated a direct final rulemaking because SBA is adopting the 
statutory language for the disclosure template questions with minor 
clarifying edits.

II. Paperwork Reduction Act, 44 U.S.C., Ch. 35

    SBA has determined that this direct final rule does not impose 
additional reporting or recordkeeping requirements under the Paperwork 
Reduction Act, 44 U.S.C., chapter 35. Sections 4(b)(2)(B) and 5(c) of 
the Extension Act exclude the application of the Paperwork Reduction 
Act to the collection of information related to the implementation of a 
due diligence program authorized by 15 U.S.C. 638(vv). The collection 
of information pursuant to the disclosure template is referenced in 
section 15 U.S.C. 638(vv)(2)(A) and (B), is related to the 
implementation of a due diligence program, and therefore is exempt from 
the requirements of the Paperwork Reduction Act.

III. Amendment

Section 9--Responsibilities of SBIR/STTR Agencies and Departments

    The Extension Act, Public Law 117-183 (Sep. 30, 2022), amended 
section 9 of the Act; 15 U.S.C. 638 (g)(13)-(17), (o)(17)-(21), and 
(vv) to require small businesses applying for SBIR or STTR awards to 
disclose information about the applicant's investment and foreign ties. 
This information must be provided by applicants for an SBIR or STTR 
award and must be considered as part of each Participating Agency's 
implementation of a due diligence program to assess security risks, as 
required by section 4 of the Extension Act, and incorporated into the 
Act at section 638(vv)(2). Sections 4(b)(2)(B) and 5(c) of the 
Extension Act exclude the application of the Paperwork Reduction Act, 
44 U.S.C. chapter 35, to the collection of information related to the 
implementation of a due diligence program authorized by 15 U.S.C. 
638(vv).
    SBA is amending Section 9(a) of the Policy Directive and adding an 
appendix to address the responsibilities of Participating Agencies to 
collect

[[Page 19705]]

disclosures of certain information about the applicant's investment and 
foreign ties, as required by the Extension Act. This amendment provides 
a common template, based on the statutory language in the Act, to 
uniformly capture required disclosures.
    Some Participating Agencies are concerned about collecting the 
disclosed information prior to publication of the disclosure template 
in the Federal Register, subject to public comment, in accordance with 
the requirements of 41 U.S.C. 1707(a). SBA is amending the Policy 
Directive, as a final rulemaking, to address that concern and to ensure 
that the disclosures may be collected without further delay. SBA is 
following the process at 41 U.S.C. 1707(a)(2), to allow a 30-day 
comment period prior to the effective date of this rulemaking. SBA 
believes that it is a compelling circumstance to limit the comment 
period to 30 days because section 4(b) of the Extension Act requires 
Participating Agencies to implement a due diligence program that 
considers the disclosed information within 270 days of the Extension 
Act's passage on September 30, 2022. SBA intends to provide further 
interpretive guidance on the disclosure template questions to 
Participating Agencies.

Notice of the Disclosure Template in the Policy Directive for the Small 
Business Innovation Research (SBIR) and Small Business Technology 
Transfer (STTR) Programs

To: The SBIR and STTR Program Managers
Subject: SBIR/STTR Policy Directive

    1. Purpose. The Small Business Administration (SBA) is updating its 
Small Business Innovation Research and Small Business Technology 
Transfer (SBIR/STTR) Policy Directives to include a disclosure template 
for Participating Agencies to collect statutorily required information 
from SBIR/STTR applicants.
    2. Authority. The Small Business Act (15 U.S.C. 638(j) and (p)) 
requires the SBA Administrator to issue an SBIR and STTR program Policy 
Directive for the general conduct of the programs. The Small Business 
Act (15 U.S.C. 638(g)(13)-(17), (o)(17)-(21), and (vv)(2)) requires 
that Participating Agencies collect disclosures of certain information 
from SBIR and STTR applicants regarding investments and foreign ties, 
as relates to the implementation of a due diligence program to assess 
security risks.
    3. Procurement Regulations. There are no procurement regulations 
created though this action.
    4. Personnel Concerned. This SBIR/STTR Policy Directive serves as 
guidance for all Federal Government personnel who are involved in the 
administration of the SBIR and STTR programs, issuance and management 
of funding agreements or contracts pursuant to the programs, and/or the 
establishment of goals for small business concerns in research or 
research and development acquisition or grants.
    5. Originator. SBA's Office of Investment and Innovation.
    This amendment to the SBIR/STTR Policy Directive will be effective 
on the date shown in the DATES section unless SBA receives any 
significant adverse comments on or before the deadline for comments set 
forth in the DATES section. Significant adverse comments are comments 
that provide strong justifications why the clarifying amendment to the 
Policy Directive should not be adopted as written or should be changed 
further. SBA does not expect to receive any significant adverse 
comments because the amendment adopts the statutory language regarding 
the disclosures of information from SBIR/STTR applicants, as relates to 
the implementation of a due diligence program. Implementation of this 
change will benefit the public by ensuring that Participating Agencies 
are using the same template to collect this information and will ensure 
that Participating Agencies receive information that is useful for 
determining whether there are security risks posed by particular SBIR 
or STTR applicants. If SBA receives any significant adverse comments, 
SBA will publish a notice in the Federal Register withdrawing this 
notice before the effective date.
    6. Date. Public comments on the proposed amendments to the Policy 
Directive must be submitted within 30 days following publication in the 
Federal Register.
    Authorized By:

    Dated: March 28, 2023.
Isabelle Casillas-Guzman,
Administrator.

List of Subjects

    SBIR/STTR Policy Directive

    1. Amend section 9(a)(5) by adding a new paragraph (13) after 
paragraph (12).
    The addition reads as follows:

9. Responsibilities of SBIR/STTR Agencies and Departments

    (a) General Responsibilities. Each agency participating in the 
SBIR/STTR program must:
    (1) * * *
* * * * *
    (13) Require disclosures from applicants utilizing the questions 
provided in the template at Appendix III as a part of the agency due 
diligence program to assess security risks under section 15 U.S.C. 
638(vv). Agencies may require small business concerns to certify that 
the information disclosed is accurate and complete.
    2. Amend by adding Appendix III to the end of the SBIR/STTR Policy 
Directive, as follows:

Appendix III: Required Disclosures of Foreign Affiliations or 
Relationships to Foreign Countries

Relevant Definitions

    Covered individual--the term ``covered individual'' means an 
individual who--
    (A) contributes in a substantive, meaningful way to the 
scientific development or execution of a research and development 
project proposed to be carried out with a research and development 
award from a federal research agency; and
    (B) is designated as a covered individual by the federal 
research agency concerned.
    Foreign affiliation--the term ``foreign affiliation'' means a 
funded or unfunded academic, professional, or institutional 
appointment or position with a foreign government or government-
owned entity, whether full-time, part-time, or voluntary. This 
includes appointments or positions deemed adjunct, visiting, or 
honorary with research institutions located in a foreign country of 
concern.
    Foreign country of concern--the term ``foreign country of 
concern'' means the People's Republic of China, the Democratic 
People's Republic of Korea, the Russian Federation, the Islamic 
Republic of Iran, or any other country determined to be a country of 
concern by the Secretary of State.
    Malign foreign talent recruitment program--the term ``malign 
foreign talent recruitment program'' has the meaning given such term 
in section 19237 of title 42.
    Federally funded award--the term ``federally funded award'' 
means a Phase I, Phase II (including a Phase II award under 
subsection (cc)), or Phase III SBIR or STTR award made using a 
funding agreement.

Applicant or awardee Name: ___
Applicant or awardee EIN (UEI if EIN is unavailable): ___

    Responses to disclosure questions may contain trade secrets or 
commercial or financial information that is privileged or 
confidential and is exempt from public disclosure. Such information 
shall be used or disclosed only for evaluation purposes or in 
accordance with an award between the submitter and the Government.
    An up-to-date list of countries determined to be countries of 
concern by the Secretary of State will be maintained and accessible 
on SBIR.gov.

[[Page 19706]]

Disclosure Questions

    1. Is any owner or covered individual of the applicant or 
awardee party to any malign foreign talent recruitment program?
    [ballot] Yes [ballot] No
    If yes, disclose the first and last name of each owner or 
covered individual, identify their role (i.e., owner or covered 
individual), and the malign foreign talent recruitment program.
    2. Is there a parent company, joint venture, or subsidiary, of 
the applicant or awardee that is based in or receives funding from, 
any foreign country of concern?
    [ballot] Yes [ballot] No
    If yes, disclose the name, full address, applicant or awardee 
relationships (i.e., parent company, joint venture, or subsidiary) 
of each entity based in, or funded by, any foreign country of 
concern.
    3. Does the applicant or awardee have any current or pending 
contractual or financial obligation or other agreement specific to a 
business arrangement, or joint venture-like arrangement with an 
enterprise owned by a foreign state or any foreign entity?
    [ballot] Yes [ballot] No
    If yes, disclose the name of each enterprise or foreign entity, 
type of obligation, agreement, or arrangement (i.e., contractual, 
financial, or other), description of obligation, agreement, or 
arrangement, and the foreign state(s) and/or the country of the 
foreign entity (or entities).
    4. Is the applicant or awardee wholly owned in a foreign 
country?
    [ballot] Yes [ballot] No
    If yes, disclose the foreign country.
    5. Does the applicant or awardee have any venture capital or 
institutional investment?
    [ballot] Yes [ballot] No
    If yes, proceed to question 5a. If no, proceed to question 6.
    5a. Does the investing entity have a general partner or any 
other individual holding a leadership role who has a foreign 
affiliation with any foreign country of concern?
    [ballot] Yes [ballot] No [ballot] Unable to determine
    If yes or unable to determine, disclose the venture capital or 
institutional investing entity's name, the percentage of ownership 
obtained by the investing entity, and the type of investment (i.e., 
equity, debt, or combination of equity and debt).
    6. During the previous 5-year period, did the applicant or 
awardee have any technology licensing or intellectual property sales 
or transfers, to a foreign country of concern?
    [ballot] Yes [ballot] No
    If yes, disclose the name, address, and country, of the 
institution or entity that licensed, purchased, or received the 
technology or intellectual property.
    7. Is there any foreign business entity, offshore entity, or 
entity outside the United States related to the applicant or 
awardee?
    [ballot] Yes [ballot] No
    If yes, disclose the entity name, relationship type (i.e., 
foreign business entity, offshore entity, entity outside the United 
States), description of the relationship to the applicant or 
awardee, and entity address and country.
    8. Does the applicant or awardee have an owner, officer, or 
covered individual that has a foreign affiliation with a research 
institution located in a foreign country of concern?
    [ballot] Yes [ballot] No
    If yes, disclose the first and last name of each owner, officer, 
or covered individual that has a foreign affiliation with a foreign 
country of concern, identify their role (i.e., owner, officer, or 
covered individual), and the name of the foreign research 
institution and the foreign country of concern where it is located.

[FR Doc. 2023-06870 Filed 3-31-23; 8:45 am]
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