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U.S. Congress Approves Six-Year Extension, Funding Overhaul of SBIR/STTR

After five years of failed attempts, the U.S. House of Representatives and Senate have agreed to a six-year reauthorization of the Small Business Innovation Research and Small Business Technology Transfer programs. The programs have limped along on short-term reauthorizations – 14 of them since full authorization expired in 2008. The current authorization had been scheduled to expire Dec. 15, but a House-Senate conference committee approved the new measure Dec. 12 as part of the government’s main defense appropriations bill.

The House had proposed a three-year reauthorization, while a Senate bill put forth by Sen. Mary Landrieu, D-La., and co-sponsored by Sen. Olympia Snowe, R-Maine, and eight other senators, called for an eight-year renewal. The six-year reauthorization approved in both houses of Congress was attached to the National Defense Authorization Act for Fiscal Year 2012. The measure was sent to President Barack Obama, who is expected to sign the bill into law.

The bill does more than just extend the SBIR and STTR programs, the largest federal research programs for small businesses. Under the newly passed legislation, SBIR financing, allocated from the budgets of 11 federal agencies, will increase from 2.5 percent to 3.2 percent gradually over the six-year life of the authorization. STTR has required agencies with research and development budgets of more than $1 billion to allocate 0.3 percent of that budget to the program, but under the newly passed bill, the amount will gradually increase to 0.45 percent.

“This has been an uphill battle, but we made it,” Landrieu said following the approval of the conference committee report. “Because of this deal, businesses will have peace of mind for the next six years. The nation’s innovators will have more access to federal research dollars, and the process by which they get the funding will be more efficient because we cut down the time for final decisions and disbursements.”

Additionally, the bill includes a controversial provision that would allow companies primarily owned by venture capital concerns to participate in the SBIR/STTR programs. The National Institutes of Health, the National Science Foundation and the Energy Department would now be allowed to award up to 25 percent of grant money to VC-owned small businesses, while other federal agencies involved in the programs could allocate up to 15 percent of their SBIR budgets to such enterprises. The SBIR/STTR reauthorization also:

  • Shortens the time for final decisions to 90 days
  • Shortens the amount of time between decision and release of funds, with flexibility for the NIH
  • Allows the agencies to use 3 percent of SBIR funds to administer SBIR programs, increase program oversight, and provide outreach and application assistance to increase participation among women, minorities and states with few awards

Added Sen. Snowe, “The long-term reauthorization of the SBIR and STTR programs is long overdue. A six-year reauthorization, increased allocations and award sizes, and the Senate framework on the venture capital compromise all help ensure that these measures remain small business’s programs, which has been my longstanding goal in seeking this reauthorization.”

The National Business Incubation Association (NBIA) is the world’s leading organization advancing business incubation and entrepreneurship. Each year, it provides thousands of professionals with information, education, advocacy and networking resources to bring excellence to the process of assisting early-stage companies. An elected, voting board of directors representing the world's leading incubators governs the association.

The New Jersey Business Incubation Network (NJBIN) is a collaborative statewide community of business experts, resources and facilities dedicated to enhancing the commercial success of early-stage entrepreneurial companies, growing higher paying jobs in New Jersey and supporting the Economic Growth Strategy for the State.

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