Enhancing Small Business Research And Innovation Act Of 2009

Floor Speech

BREAK IN TRANSCRIPT

Mr. Chairman, I rise in support of H.R. 2965, the Enhancing Small Business Research and Innovation Act of 2009. Innovation happens every day. Whether it is a new development in the fight for cancer or a new computer system designed to protect our soldiers, more and more good ideas are coming from America's small businesses.

The Small Business Innovation Research, the SBIR, and the Small Business Technology Transfer, the STTR, programs help to take ideas and turn them into practical products. By all accounts, the SBIR and STTR programs are highly successful Federal initiatives designed to encourage economic growth and innovation within the small business community.

Created in 1982, the SBIR program offers competition-based awards to stimulate technological innovation among small private-sector businesses while providing government agencies with new, cost-effective solutions to meet their needs. This program is not only critical to the unique needs of each of the participating Federal agencies, but also to our national economy.

Small businesses invigorate the U.S. economy by introducing new products and lower cost methods of doing business, sometimes with substantial economic benefits. They play a key role in introducing new technologies to the market, often responding quickly to new market opportunities.

Our committee worked in a bipartisan manner to produce this legislation. We held several hearings on this topic over the last few months, inviting the Small Business Administration, SBIR and STTR program managers from Federal agencies, various small businesses, and academics to discuss the program successes and to consider amendments that would improve them. I'm happy to say that many of the ideas that were presented to the committee have found a way into this legislation.

For example, the topic that dominated much of the discussion at our hearings was the appropriate level of venture capital involvement in the SBIR program. Unfortunately, there have been several misconceptions stated about this provision in the bill.

In 2003, the Small Business Administration reversed a 20-year-old policy by ruling that small businesses that are majority-owned by venture capital companies can no longer compete for grants under the SBIR program, regardless of how few employees companies have. As a result, this has jeopardized the development of innovative treatments, therapies, and technologies.

The goal of our proposal is to ensure that America's small businesses continue to be the world's leader in innovative research and development and to provide the best small companies with the greatest commercialization potential access to SBIR and STTR programs.

In addition, access to capital is a real concern for small businesses across all industries, and our provision provides small businesses another path to acquire the capital they need to be successful.

It is also important to keep in mind that these programs will remain open for competition among all small businesses, and Federal agencies will choose the best small business to win the award.

H.R. 2965 contains significant and dedicated safeguards to ensure that the SBIR program remains a small business program. It forbids a small business with one venture capital firm having over 50 percent ownership from qualifying for that small business award. The bill also has safeguards to prohibit large companies from taking control of the small business and receiving small business grants.

The legislation also bans a business whose board's majority is from a venture capital firm from participation in the program. Finally, because venture capital investments are often done as a group to reduce risk, the bill strictly limits the amount of participation of venture capital firms that are themselves owned by a business of over 500 employees.

Our comprehensive bill also takes significant strides to bring the programs into the 21st century by increasing the award sizes, enhancing data collection and reporting requirements for better oversight, and providing Federal agencies with the mechanism by which they can meet and share best practices.

Mr. Chairman, I urge my colleagues to support this bipartisan legislation.

BREAK IN TRANSCRIPT

Source