Sunday, June 21, 2009

Senate Offers Compromise Bill to Keep SBIR/STTR Alive (Source: SSTI)

The Senate Committee on Small Business and Entrepreneurship has marked up S. 1233, a bill to reauthorize and expand the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. Both programs are within weeks of expiring on July 30. SBIR, first authorized in 1982 and credited with providing startup and early-stage financing for several thousand technology and research-related firms across the country, has enjoyed broad, bipartisan support for each of its previous reauthorizations. The current effort has proven more problematic despite several positive evaluations by the Government Accountability Office and most recently the National Academies of Science.

The House and Senate were unable to craft a compromise bill before adjourning last year. Instead, Congress extended SBIR and STTR in their current forms until July 30, postponing discussion for a new Congress and new Administration. Currently, SBIR is a single program with 11 federal agencies more or less following the same rules spelled out in the authorizing legislation and the policy directive set down by the Small Business Administration. S. 1233 would alter the playing field, allowing the National Institutes of Health to make more awards to VC-backed firms than the other agencies. NIH, the venture capital community, and trade groups representing biotech and life science firms have been the most vocal advocates for more lax eligibility rules.

To date, the House version of SBIR reauthorization would be more generous - allowing VC-owned businesses full access to SBIR funding across all participating agencies. Opponents to that proposal argue the move would dilute the definition of a small business to the point of being meaningless (any large corporation could establish a SBIR shill, they argue) while also potentially putting small businesses without the financial and technical resources of VC-owned firms at a competitive disadvantage for winning awards. States without significant venture capital activity are among those seeing changes to the eligibility definition as potentially harmful to their efforts to stimulate tech-based economic development. (6/18)


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