Of a perfecting nature.

SBIR/STTR REAUTHORIZATION ACT OF 2011

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will proceed to the consideration of S. 493, which the clerk
will report.
The assistant legislative clerk read as follows:

A bill (S. 493) to reauthorize and improve the SBIR and
STTR programs, and for other purposes.

The Senate proceeded to consider the bill, which had been reported
from the Committee on Small Business and Entrepreneurship, with
amendments; as follows:

(The parts of the bill intended to be stricken are shown in boldface
brackets and the parts of the bill intended to be inserted are shown in
italic.)

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``SBIR/STTR Reauthorization
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. Status of the Office of Technology.
Sec. 103. SBIR allocation increase.
Sec. 104. STTR allocation increase.
Sec. 105. SBIR and STTR award levels.
Sec. 106. Agency and program flexibility.
Sec. 107. Elimination of Phase II invitations.
Sec. 108. Participation by firms with substantial investment from
multiple venture capital operating companies in a portion
of the SBIR program.
Sec. 109. SBIR and STTR special acquisition preference.
Sec. 110. Collaborating with Federal laboratories and research and
development centers.
Sec. 111. Notice requirement.
Sec. 112. Express authority for an agency to award sequential Phase II
awards for SBIR or STTR funded projects.

TITLE II--OUTREACH AND COMMERCIALIZATION INITIATIVES

Sec. 201. Rural and State outreach.
[Sec. 202. SBIR-STEM Workforce Development Grant Pilot Program.]
Sec. [203]202. Technical assistance for awardees.
Sec. [204]203. Commercialization Readiness Program at Department of
Defense.
Sec. [205]204. Commercialization Readiness Pilot Program for civilian
agencies.
Sec. [206]205. Accelerating cures.
Sec. [207]206. Federal agency engagement with SBIR and STTR awardees
that have been awarded multiple Phase I awards but have
not been awarded Phase II awards.
Sec. [208]207. Clarifying the definition of ``Phase III''.
Sec. [209]208. Shortened period for final decisions on proposals and
applications.

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. Intellectual property protections.
Sec. 310. Obtaining consent from SBIR and STTR applicants to release
contact information to economic development
organizations.
Sec. 311. Pilot to allow funding for administrative, oversight, and
contract processing costs.
Sec. 312. GAO study with respect to venture capital operating company
involvement.
Sec. 313. Reducing vulnerability of SBIR and STTR programs to fraud,
waste, and abuse.
Sec. 314. Interagency policy committee.
Sec. 315. Simplified paperwork requirements.

TITLE IV--POLICY DIRECTIVES

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

TITLE V--OTHER PROVISIONS

Sec. 501. Research topics and program diversification.
Sec. 502. Report on SBIR and STTR program goals.
Sec. 503. Competitive selection procedures for SBIR and STTR programs.

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 ``2019''; 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 ``2019''; and
(3) by striking clause (ii).

SEC. 102. STATUS OF THE OFFICE OF TECHNOLOGY.

Section 9(b) of the Small Business Act (15 U.S.C. 638(b))
is amended--

[[Page S1621]]

(1) in paragraph (7), by striking ``and'' at the end;
(2) in paragraph (8), by striking the period at the end and
inserting ``; and'';
(3) by redesignating paragraph (8) as paragraph (9); and
(4) by adding at the end the following:
``(10) to maintain an Office of Technology to carry out the
responsibilities of the Administration under this section,
which shall be--
``(A) headed by the Assistant Administrator for Technology,
who shall report directly to the Administrator; and
``(B) independent from the Office of Government Contracting
of the Administration and sufficiently staffed and funded to
comply with the oversight, reporting, and public database
responsibilities assigned to the Office of Technology by the
Administrator.''.

SEC. 103. SBIR ALLOCATION INCREASE.

Section 9(f) of the Small Business Act (15 U.S.C. 638(f))
is amended--
(1) in paragraph (1)--
(A) in the matter preceding subparagraph (A), by striking
``Each'' and inserting ``Except as provided in paragraph
(2)(B), each'';
(B) in subparagraph (B), by striking ``and'' at the end;
and
(C) by striking subparagraph (C) and inserting the
following:
``(C) not less than 2.5 percent of such budget in fiscal
year 2013;
``(D) not less than 2.6 percent of such budget in fiscal
year 2014;
``(E) not less than 2.7 percent of such budget in fiscal
year 2015;
``(F) not less than 2.8 percent of such budget in fiscal
year 2016;
``(G) not less than 2.9 percent of such budget in fiscal
year 2017;
``(H) not less than 3.0 percent of such budget in fiscal
year 2018;
``(I) not less than 3.1 percent of such budget in fiscal
year 2019;
``(J) not less than 3.2 percent of such budget in fiscal
year 2020;
``(K) not less than 3.3 percent of such budget in fiscal
year 2021;
``(L) not less than 3.4 percent of such budget in fiscal
year 2022; and
``(M) not less than 3.5 percent of such budget in fiscal
year 2023 and each fiscal year thereafter.''; [and]
(2) in paragraph (2)--
(A) by redesignating subparagraphs (A) and (B) as clauses
(i) and (ii), respectively, and adjusting the margins
accordingly;
(B) by striking ``A Federal agency'' and inserting the
following:
``(A) In general.--A Federal agency''; and
(C) by adding at the end the following:
``(B) Department of defense and department of energy.--For
the Department of Defense and the Department of Energy, to
the greatest extent practicable, the percentage of the
extramural budget in excess of 2.5 percent required to be
expended with small business concerns under subparagraphs (D)
through (M) of paragraph (1)--
``(i) may not be used for new Phase I or Phase II awards;
and
``(ii) shall be used for activities that further the
readiness levels of technologies developed under Phase II
awards, including conducting testing and evaluation to
promote the transition of such technologies into commercial
or defense products, or systems furthering the mission needs
of the Department of Defense or the Department of Energy, as
the case may be.''[.]; and
(3) by adding at the end the following:
``(4) Rule of construction.--Nothing in this subsection may
be construed to prohibit a Federal agency from expending with
small business concerns an amount of the extramural budget
for research or research and development of the Federal
agency that exceeds the amount required under paragraph
(1).''.

SEC. 104. STTR ALLOCATION INCREASE.

Section 9(n)(1)(B) of the Small Business Act (15 U.S.C.
638(n)(1)(B)) is amended--
(1) in clause (i), by striking ``and'' at the end;
(2) in clause (ii), by striking ``thereafter.'' and
inserting ``through fiscal year 2012;''; [and]
(3) by adding at the end the following:
``(iii) 0.4 percent for fiscal years 2013 and 2014;
``(iv) 0.5 percent for fiscal years 2015 and 2016; and
``(v) 0.6 percent for fiscal year 2017 and each fiscal year
thereafter.''[.]; and
(4) by adding at the end the following:
``(4) Rule of construction.--Nothing in this subsection may
be construed to prohibit a Federal agency from expending with
small business concerns an amount of the extramural budget
for research or research and development of the Federal
agency that exceeds the amount required under paragraph
(1).''.

SEC. 105. 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) is 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 investment and, if so, whether the recipient is
majority-owned by multiple venture capital operating
companies.
``(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. 106. AGENCY AND PROGRAM FLEXIBILITY.

Section 9 of the Small Business Act (15 U.S.C. 638), as
amended by this Act, is amended by adding at the end the
following:
``(bb) Subsequent Phase II Awards.--
``(1) Agency flexibility.--A small business concern that
received an 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 an 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).
``(3) Preventing duplicative awards.--Before making an
award under paragraph (1) or (2), the head of a Federal
agency shall verify that the project to be performed with the
award has not been funded under the SBIR program or STTR
program of another Federal agency.''.

SEC. 107. ELIMINATION OF PHASE II INVITATIONS.

(a) In General.--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 the second phase, 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 the second phase, that
will further develop proposals that''.

SEC. 108. PARTICIPATION BY FIRMS WITH SUBSTANTIAL INVESTMENT
FROM MULTIPLE VENTURE CAPITAL OPERATING
COMPANIES 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 amended by adding at
the end the following:
``(cc) Participation of Small Business Concerns Majority-
Owned by Venture Capital Operating Companies in the SBIR
Program.--
``(1) Authority.--Upon a written determination described in
paragraph (2) provided to the Administrator and to the
Committee on Small Business and Entrepreneurship of the
Senate and the Committee on Small Business 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, and the Director of the National
Science Foundation may award not more than 25 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 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 15 percent of the funds
allocated for the SBIR program of the Federal agency to small
business concerns that are owned in majority part by

[[Page S1622]]

multiple venture capital operating companies 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 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 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.
``(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 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.
``(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, 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.
``[(6)](7) Evaluation criteria.--A Federal agency may not
use investment of venture capital 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).''.
(c) Rulemaking To Ensure That Firms That Are Majority-Owned
by Multiple Venture Capital Operating Companies Are Able To
Participate in a Portion of the SBIR Program.--
(1) Statement of congressional intent.--It is the stated
intent of Congress that the Administrator should promulgate
regulations to carry out the authority under section 9(cc) of
the Small Business Act, as added by this section, that--
(A) permit small business concerns that are majority-owned
by multiple venture capital operating companies to
participate in the SBIR program in accordance with section
9(cc) of the Small Business Act;
(B) provide specific guidance for small business concerns
that are majority-owned by multiple venture capital operating
companies with regard to eligibility, participation, and
affiliation rules; and
(C) preserve and maintain the integrity of the SBIR program
as a program for small business concerns in the United
States, prohibiting large businesses or large entities or
foreign-owned businesses or entities from participation in
the program established under section 9 of the Small Business
Act.
(2) Rulemaking required.--
(A) Proposed regulations.--Not later than 4 months after
the date of enactment of this Act, the Administrator shall
issue proposed regulations to amend section 121.103 (relating
to determinations of affiliation applicable to the SBIR
program) and section 121.702 (relating to ownership and
control standards and size standards applicable to the SBIR
program) of title 13, Code of Federal Regulations, for firms
that are majority-owned by multiple venture capital operating
companies and participating in the SBIR program solely under
the authority under section 9(cc) of the Small Business Act,
as added by this section.
(B) Final regulations.--Not later than 1 year after the
date of enactment of this Act, and after providing notice of
and opportunity for comment on the proposed regulations
issued under subparagraph (A), the Administrator shall issue
final or interim final regulations under this subsection.
(3) Contents.--
(A) In general.--The regulations issued under this
subsection shall permit the participation of applicants
majority-owned by multiple venture capital operating
companies in the SBIR program in accordance with section
9(cc) of the Small Business Act, as added by this section,
unless the Administrator determines--
(i) in accordance with the size standards established under
subparagraph (B), that the applicant is--

(I) a large business or large entity; or
(II) majority-owned or controlled by a large business or
large entity; or

(ii) in accordance with the criteria established under
subparagraph (C), that the applicant--

(I) is a foreign business or a foreign entity or is not a
citizen of the United States or alien lawfully admitted for
permanent residence; or
(II) is majority-owned or controlled by a foreign business,
foreign entity, or person who is not a citizen of the United
States or alien lawfully admitted for permanent residence.

(B) Size standards.--Under the authority to establish size
standards under paragraphs (2) and (3) of section 3(a) of the
Small Business Act (15 U.S.C. 632(a)), the Administrator
shall, in accordance with paragraph (1) of this subsection,
establish size standards for applicants seeking to
participate in the SBIR program solely under the authority
under section 9(cc) of the Small Business Act, as added by
this section.
(C) Criteria for determining foreign ownership.--The
Administrator shall establish criteria for determining
whether an applicant meets the requirements under
subparagraph (A)(ii), and, in establishing the criteria,
shall consider whether the criteria should include--
(i) whether the applicant is at least 51 percent owned or
controlled by citizens of the United States or domestic
venture capital operating companies;
(ii) whether the applicant is domiciled in the United
States; and
(iii) whether the applicant is a direct or indirect
subsidiary of a foreign-owned firm, including whether the
criteria should include that an applicant is a direct or
indirect subsidiary of a foreign-owned entity if--

(I) any venture capital operating company that owns more
than 20 percent of the applicant is a direct or indirect
subsidiary of a foreign-owned entity; or
(II) in the aggregate, entities that are direct or indirect
subsidiaries of foreign-owned entities own more than 49
percent of the applicant.

(D) Criteria for determining affiliation.--The
Administrator shall establish criteria, in accordance with
paragraph (1), for determining whether an applicant is
affiliated with a venture capital operating company or any
other business that the venture capital operating company has
financed and, in establishing the criteria, shall specify
that--
(i) if a venture capital operating company that is
determined to be affiliated with an applicant is a minority
investor in the applicant, the portfolio companies of the
venture capital operating company shall not be determined to
be affiliated with the applicant, unless--

(I) the venture capital operating company owns a majority
of the portfolio company; or
(II) the venture capital operating company holds a majority
of the seats on the board of directors of the portfolio
company;

(ii) subject to clause (i), the Administrator retains the
authority to determine whether a venture capital operating
company is affiliated with an applicant, including
establishing other criteria;
(iii) the Administrator may not determine that a portfolio
company of a venture capital operating company is affiliated
with an applicant based solely on one or more shared
investors; and

[[Page S1623]]

(iv) subject to clauses (i), (ii), and (iii), the
Administrator retains the authority to determine whether a
portfolio company of a venture capital operating company is
affiliated with an applicant based on factors independent of
whether there is a shared investor, such as whether there are
contractual obligations between the portfolio company and the
applicant.
(4) Enforcement.--If the Administrator does not issue final
or interim final regulations under this subsection on or
before the date that is 1 year after the date of enactment of
this Act, the Administrator may not carry out any activities
under section 4(h) of the Small Business Act (15 U.S.C.
633(h)) (as continued in effect pursuant to the Act entitled
``An Act to extend temporarily certain authorities of the
Small Business Administration'', approved October 10, 2006
(Public Law 109-316; 120 Stat. 1742)) during the period
beginning on the date that is 1 year and 1 day after the date
of enactment of this Act, and ending on the date on which the
final or interim final regulations are issued.
(5) Definition.--In this subsection, the term ``venture
capital operating company'' has the same meaning as in
section 3(aa) of the Small Business Act, as added by this
section.
(d) Assistance for Determining Affiliates.--
(1) Clear explanation required.--Not later than 30 days
after the date of enactment of this Act, the Administrator
shall post on the Web site of the Administration (with a
direct link displayed on the homepage of the Web site of the
Administration or the SBIR and STTR Web sites of the
Administration)--
(A) a clear explanation of the SBIR and STTR affiliation
rules under part 121 of title 13, Code of Federal
Regulations; and
(B) contact information for officers or employees of the
Administration who--
(i) upon request, shall review an issue relating to the
rules described in subparagraph (A); and
(ii) shall respond to a request under clause (i) not later
than 20 business days after the date on which the request is
received.
(2) Inclusion of affiliation rules for certain small
business concerns.--On and after the date on which the final
regulations under subsection (c) are issued, the
Administrator shall post on the Web site of the
Administration information relating to the regulations, in
accordance with paragraph (1).

SEC. 109. 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. 110. 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 amended by adding at the end the
following:
``(dd) 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.''.

SEC. 111. 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 a semicolon; 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; and''.
(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. 112. EXPRESS AUTHORITY FOR AN AGENCY TO AWARD SEQUENTIAL
PHASE II AWARDS FOR SBIR OR STTR FUNDED
PROJECTS.

Section 9 of the Small Business Act (15 U.S.C. 638), as
amended by this Act, is amended by adding at the end the
following:
``(ee) Additional Phase II SBIR and STTR Awards.--A small
business concern that receives a Phase II SBIR award or a
Phase II STTR award for a project remains eligible to receive
an additional Phase II SBIR award or Phase II STTR award for
that project.''.

TITLE II--OUTREACH AND COMMERCIALIZATION INITIATIVES

SEC. 201. RURAL AND STATE OUTREACH.

(a) In General.--Section 9 of the Small Business Act (15
U.S.C. 638) is amended by inserting after subsection (r) the
following:
``(s) Federal and State Technology Partnership Program.--
``(1) Definitions.--In this subsection, the following
definitions apply:
``(A) Applicant.--The term `applicant' means an entity,
organization, or individual that submits a proposal for an
award or a cooperative agreement under this subsection.
``(B) FAST program.--The term `FAST program' means the
Federal and State Technology Partnership Program established
under this subsection.
``(C) Recipient.--The term `recipient' means a person that
receives an award or becomes party to a cooperative agreement
under this subsection.
``(D) State.--The term `State' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, and American Samoa.
``(E) Definitions relating to mentoring networks.--The
terms `business advice and counseling', `mentor', and
`mentoring network' have the meanings given those terms in
section 34(e).
``(2) Establishment of program.--The Administrator shall
establish a program to be known as the Federal and State
Technology Partnership Program, the purpose of which shall be
to strengthen the technological competitiveness of small
business concerns in the States.
``(3) Grants and cooperative agreements.--
``(A) Joint review.--In carrying out the FAST program, the
Administrator and the program managers for the SBIR program
and STTR program at the National Science Foundation, the
Department of Defense, and any other Federal agency
determined appropriate by the Administrator shall jointly
review proposals submitted by applicants and may make awards
or enter into cooperative agreements under this subsection
based on the factors for consideration set forth in
subparagraph (B), in order to enhance or develop in a State--
``(i) technology research and development by small business
concerns;
``(ii) technology transfer from university research to
technology-based small business concerns;
``(iii) technology deployment and diffusion benefitting
small business concerns;
``(iv) the technological capabilities of small business
concerns through the establishment or operation of consortia
comprised of entities, organizations, or individuals,
including--

``(I) State and local development agencies and entities;
``(II) representatives of technology-based small business
concerns;
``(III) industries and emerging companies;
``(IV) universities; and
``(V) small business development centers; and

``(v) outreach, financial support, and technical assistance
to technology-based small business concerns participating in
or interested in participating in an SBIR program or STTR
program, including initiatives--

``(I) to make grants or loans to companies to pay a portion
or all of the cost of developing SBIR or STTR proposals;
``(II) to establish or operate a Mentoring Network within
the FAST program to provide business advice and counseling
that will assist small business concerns that have been
identified by FAST program participants, program managers of
participating

[[Page S1624]]

SBIR agencies, the Administration, or other entities that are
knowledgeable about the SBIR and STTR programs as good
candidates for the SBIR and STTR programs, and that would
benefit from mentoring, in accordance with section 34;
``(III) to create or participate in a training program for
individuals providing SBIR or STTR outreach and assistance at
the State and local levels; and
``(IV) to encourage the commercialization of technology
developed through funding under the SBIR program or the STTR
program.

``(B) Selection considerations.--In making awards or
entering into cooperative agreements under this subsection,
the Administrator and the program managers referred to in
subparagraph (A)--
``(i) may only consider proposals by applicants that intend
to use a portion of the Federal assistance provided under
this subsection to provide outreach, financial support, or
technical assistance to technology-based small business
concerns participating in or interested in participating in
the SBIR program or STTR program; and
``(ii) shall consider, at a minimum--

``(I) whether the applicant has demonstrated that the
assistance to be provided would address unmet needs of small
business concerns in the community, and whether it is
important to use Federal funding for the proposed activities;
``(II) whether the applicant has demonstrated that a need
exists to increase the number or success of small high-
technology businesses in the State or an area of the State,
as measured by the number of Phase I and Phase II SBIR awards
that have historically been received by small business
concerns in the State or area of the State;
``(III) whether the projected costs of the proposed
activities are reasonable;
``(IV) whether the proposal integrates and coordinates the
proposed activities with other State and local programs
assisting small high-technology firms in the State;
``(V) the manner in which the applicant will measure the
results of the activities to be conducted; and
``(VI) whether the proposal addresses the needs of small
business concerns--

``(aa) owned and controlled by women;
``(bb) that are socially and economically disadvantaged
small business concerns (as defined in section 8(a)(4)(A));
``(cc) that are HUBZone small business concerns;
``(dd) located in areas that have historically not
participated in the SBIR and STTR programs;
``(ee) owned and controlled by service-disabled veterans;
``(ff) owned and controlled by Native Americans; and
``(gg) located in geographic areas 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.
``(C) Proposal limit.--Not more than 1 proposal may be
submitted for inclusion in the FAST program under this
subsection to provide services in any one State in any 1
fiscal year.
``(D) Process.--Proposals and applications for assistance
under this subsection shall be in such form and subject to
such procedures as the Administrator shall establish. The
Administrator shall promulgate regulations establishing
standards for the consideration of proposals under
subparagraph (B), including standards regarding each of the
considerations identified in subparagraph (B)(ii).
``(4) Cooperation and coordination.--In carrying out the
FAST program, the Administrator shall cooperate and
coordinate with--
``(A) Federal agencies required by this section to have an
SBIR program; and
``(B) entities, organizations, and individuals actively
engaged in enhancing or developing the technological
capabilities of small business concerns, including--
``(i) State and local development agencies and entities;
``(ii) State committees established under the Experimental
Program to Stimulate Competitive Research of the National
Science Foundation (as established under section 113 of the
National Science Foundation Authorization Act of 1988 (42
U.S.C. 1862g));
``(iii) State science and technology councils; and
``(iv) representatives of technology-based small business
concerns.
``(5) Administrative requirements.--
``(A) Competitive basis.--Awards and cooperative agreements
under this subsection shall be made or entered into, as
applicable, on a competitive basis.
``(B) Matching requirements.--
``(i) In general.--The non-Federal share of the cost of an
activity (other than a planning activity) carried out using
an award or under a cooperative agreement under this
subsection shall be--

``(I) except as provided in clause (iii), 35 cents for each
Federal dollar, in the case of a recipient that will serve
small business concerns located in 1 of the 18 States
receiving the fewest Phase I SBIR awards;
``(II) except as provided in clause (ii) or (iii), 1 dollar
for each Federal dollar, in the case of a recipient that will
serve small business concerns located in 1 of the 16 States
receiving the greatest number of Phase I SBIR awards; and
``(III) except as provided in clause (ii) or (iii), 50
cents for each Federal dollar, in the case of a recipient
that will serve small business concerns located in a State
that is not described in subclause (I) or (II) that is
receiving Phase I SBIR awards.

``(ii) Low-income areas.--The non-Federal share of the cost
of the activity carried out using an award or under a
cooperative agreement under this subsection shall be 35 cents
for each Federal dollar that will be directly allocated by a
recipient described in clause (i) to serve small business
concerns located in a qualified census tract, as that term is
defined in section 42(d)(5)(B)(ii)(I) of the Internal Revenue
Code of 1986. Federal dollars not so allocated by that
recipient shall be subject to the matching requirements of
clause (i).
``(iii) Rural areas.--

``(I) In general.--Except as provided in subclause (II),
the non-Federal share of the cost of the activity carried out
using an award or under a cooperative agreement under this
subsection shall be 35 cents for each Federal dollar that
will be directly allocated by a recipient described in clause
(i) to serve small business concerns located in a rural area.
``(II) Enhanced rural awards.--For a recipient located in a
rural area that is located in a State described in clause
(i)(I), the non-Federal share of the cost of the activity
carried out using an award or under a cooperative agreement
under this subsection shall be 15 cents for each Federal
dollar that will be directly allocated by a recipient
described in clause (i) to serve small business concerns
located in the rural area.
``(III) Definition of rural area.--In this clause, the term
`rural area' has the meaning given that term in section
1393(a)(2) of the Internal Revenue Code of 1986.

``(iv) Types of funding.--The non-Federal share of the cost
of an activity carried out by a recipient shall be comprised
of not less than 50 percent cash and not more than 50 percent
of indirect costs and in-kind contributions, except that no
such costs or contributions may be derived from funds from
any other Federal program.
``(v) Rankings.--For the first full fiscal year after the
date of enactment of the SBIR/STTR Reauthorization Act of
2011, and each fiscal year thereafter, based on the
statistics for the most recent full fiscal year for which the
Administrator has compiled statistics, the Administrator
shall reevaluate the ranking of each State for purposes of
clause (i).
``(C) Duration.--Awards may be made or cooperative
agreements entered into under this subsection for multiple
years, not to exceed 5 years in total.
``(6) Annual reports.--The Administrator shall submit an
annual report 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 regarding--
``(A) the number and amount of awards provided and
cooperative agreements entered into under the FAST program
during the preceding year;
``(B) a list of recipients under this subsection, including
their location and the activities being performed with the
awards made or under the cooperative agreements entered into;
and
``(C) the Mentoring Networks and the mentoring database, as
provided for under section 34, including--
``(i) the status of the inclusion of mentoring information
in the database required by subsection (k); and
``(ii) the status of the implementation and description of
the usage of the Mentoring Networks.
``(7) Program levels.--
``(A) In general.--There is authorized to be appropriated
to carry out the FAST program, including Mentoring Networks,
under this subsection and section 34, $15,000,000 for each of
fiscal years 2011 through 2016.
``(B) Mentoring database.--Of the total amount made
available under subparagraph (A) for fiscal years 2011
through 2016, a reasonable amount, not to exceed a total of
$500,000, may be used by the Administration to carry out
section 34(d).
``(8) Termination.--The authority to carry out the FAST
program under this subsection shall terminate on September
30, 2016.''.
(b) Technical and Conforming Amendments.--The Small
Business Act (15 U.S.C. 631 et seq.) is amended--
(1) by striking section 34 (15 U.S.C. 657d);
(2) by redesignating sections 35 through 43 as sections 34
through 42, respectively;
(3) in section 9(k)(1)(D) (15 U.S.C. 638(k)(1)(D)), by
striking ``section 35(d)'' and inserting ``section 34(d)'';
(4) in section 34 (15 U.S.C. 657e), as so redesignated--
(A) in subsection (c)(1), by striking ``section
34(c)(1)(E)(ii)'' and inserting ``section
9(s)(3)(A)(v)(II)'';
(B) by striking ``section 34'' each place it appears and
inserting ``section 9(s)''; and
(C) by adding at the end the following:
``(e) Definitions.--In this section, the following
definitions apply:
``(1) Business advice and counseling.--The term `business
advice and counseling' means providing advice and assistance
on matters described in subsection (c)(2)(B) to small
business concerns to guide them through the SBIR and STTR
program process, from application to award and successful
completion of each phase of the program.

[[Page S1625]]

``(2) FAST program.--The term `FAST program' means the
Federal and State Technology Partnership Program established
under section 9(s).
``(3) Mentor.--The term `mentor' means an individual
described in subsection (c)(2).
``(4) Mentoring network.--The term `Mentoring Network'
means an association, organization, coalition, or other
entity (including an individual) that meets the requirements
of subsection (c).
``(5) Recipient.--The term `recipient' means a person that
receives an award or becomes party to a cooperative agreement
under this section.
``(6) SBIR program.--The term `SBIR program' has the same
meaning as in section 9(e)(4).
``(7) State.--The term `State' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, the Virgin Islands, Guam, and American Samoa.
``(8) STTR program.--The term `STTR program' has the same
meaning as in section 9(e)(6).'';
(5) in section 36(d) (15 U.S.C. 657i(d)), as so
redesignated, by striking ``section 43'' and inserting
``section 42'';
(6) in section 39(d) (15 U.S.C. 657l(d)), as so
redesignated, by striking ``section 43'' and inserting
``section 42''; and
(7) in section 40(b) (15 U.S.C. 657m(b)), as so
redesignated, by striking ``section 43'' and inserting
``section 42''.

[SEC. 202. SBIR-STEM WORKFORCE DEVELOPMENT GRANT PILOT
PROGRAM.

[(a) Pilot Program Established.--From amounts made
available to carry out this section, the Administrator shall
establish a SBIR-STEM Workforce Development Grant Pilot
Program to encourage the business community to provide
workforce development opportunities for college students, in
the fields of science, technology, engineering, and math (in
this section referred to as ``STEM college students''),
particularly those that are socially and economically
disadvantaged individuals, from rural areas, or from areas
with high unemployment, as determined by the Administrator,
by providing a SBIR bonus grant.
[(b) Eligible Entities Defined.--In this section the term
``eligible entity'' means a grantee receiving a grant under
the SBIR Program on the date of the bonus grant under
subsection (a) that provides an internship program for STEM
college students.
[(c) Awards.--An eligible entity shall receive a bonus
grant equal to 10 percent of either a Phase I or Phase II
grant, as applicable, with a total award maximum of not more
than $10,000 per year.
[(d) Evaluation.--Following the fourth year of funding
under this section, the Administrator shall submit to
Congress as part of the report under section 9(b)(7) of the
Small Business Act (15 U.S.C. 638(b)(7)) the results of the
SBIR-STEM Workforce Development Grant Pilot Program.
[(e) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section--
[(1) $1,000,000 for fiscal year 2012;
[(2) $1,000,000 for fiscal year 2013;
[(3) $1,000,000 for fiscal year 2014;
[(4) $1,000,000 for fiscal year 2015; and
[(5) $1,000,000 for fiscal year 2016.]

SEC. [203]202. 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. [204]203. 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 SBIR/STTR Reauthorization 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. [205]204. 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 amended by adding at the end the
following:
``(ff) 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, and
evaluation of SBIR and STTR Phase II technologies; or
``(B) to support the progress of research or research and
development 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 to 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 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) Report.--The head of each covered Federal agency
shall include in the annual report of the covered Federal
agency to the

[[Page S1626]]

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.
``(6) Termination.--The authority to establish a pilot
program under this section expires at the end of fiscal year
2014.
``(7) 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. [206]205. ACCELERATING CURES.

(a) In General.--The Small Business Act (15 U.S.C. 631 et
seq.) is amended by inserting after section 42, as
redesignated by section 201 of this Act, the following:

``SEC. 43. SMALL BUSINESS INNOVATION RESEARCH PROGRAM.

``(a) NIH Cures Pilot.--
``(1) Establishment.--An independent advisory board shall
be established at the National Academy of Sciences (in this
section referred to as the `advisory board') to conduct
periodic evaluations of the SBIR program (as that term is
defined in section 9) of each of the National Institutes of
Health (referred to in this section as the `NIH') institutes
and centers for the purpose of improving the management of
the SBIR program through data-driven assessment.
``(2) Membership.--
``(A) In general.--The advisory board shall consist of--
``(i) the Director of the NIH;
``(ii) the Director of the SBIR program of the NIH;
``(iii) senior NIH agency managers, selected by the
Director of NIH;
``(iv) industry experts, selected by the Council of the
National Academy of Sciences in consultation with the
Associate Administrator for Technology of the Administration
and the Director of the Office of Science and Technology
Policy; and
``(v) owners or operators of small business concerns that
have received an award under the SBIR program of the NIH,
selected by the Associate Administrator for Technology of the
Administration.
``(B) Number of members.--The total number of members
selected under clauses (iii), (iv), and (v) of subparagraph
(A) shall not exceed 10.
``(C) Equal representation.--The total number of members of
the advisory board selected under clauses (i), (ii), (iii),
and (iv) of subparagraph (A) shall be equal to the number of
members of the advisory board selected under subparagraph
(A)(v).
``(b) Addressing Data Gaps.--In order to enhance the
evidence-base guiding SBIR program decisions and changes, the
Director of the SBIR program of the NIH shall address the
gaps and deficiencies in the data collection concerns
identified in the 2007 report of the National Academy of
Science entitled `An Assessment of the Small Business
Innovation Research Program at the NIH'.
``(c) Pilot Program.--
``(1) In general.--The Director of the SBIR program of the
NIH may initiate a pilot program, under a formal mechanism
for designing, implementing, and evaluating pilot programs,
to spur innovation and to test new strategies that may
enhance the development of cures and therapies.
``(2) Considerations.--The Director of the SBIR program of
the NIH may consider conducting a pilot program to include
individuals with successful SBIR program experience in study
sections, hiring individuals with small business development
experience for staff positions, separating the commercial and
scientific review processes, and examining the impact of the
trend toward larger awards on the overall program.
``(d) Report to Congress.--The Director of the NIH shall
submit an annual report to Congress and the advisory board on
the activities of the SBIR program of the NIH under this
section.
``(e) SBIR Grants and Contracts.--
``(1) In general.--In awarding grants and contracts under
the SBIR program of the NIH each SBIR program manager shall
emphasize applications that identify products, processes,
technologies, and services that may enhance the development
of cures and therapies.
``(2) Examination of commercialization and other metrics.--
The advisory board shall evaluate the implementation of the
requirement under paragraph (1) by examining increased
commercialization and other metrics, to be determined and
collected by the SBIR program of the NIH.
``(3) Phase i and ii.--To the greatest extent practicable,
the Director of the SBIR program of the NIH shall reduce the
time period between Phase I and Phase II funding of grants
and contracts under the SBIR program of the NIH to 90 days.
``(f) Limit.--Not more than a total of 1 percent of the
extramural budget (as defined in section 9 of the Small
Business Act (15 U.S.C. 638)) of the NIH for research or
research and development may be used for the pilot program
under subsection (c) and to carry out subsection (e).''.
(b) Prospective Repeal.--Effective 5 years after the date
of enactment of this Act, the Small Business Act (15 U.S.C.
631 et seq.) is amended--
(1) by striking section 43, as added by subsection (a); and
(2) by redesignating sections 44 and 45 as sections 43 and
44, respectively.

SEC. [207]206. FEDERAL AGENCY ENGAGEMENT WITH SBIR AND STTR
AWARDEES THAT HAVE BEEN AWARDED MULTIPLE PHASE
I AWARDS BUT HAVE NOT BEEN AWARDED PHASE II
AWARDS.

Section 9 of the Small Business Act (15 U.S.C. 638), as
amended by this Act, is amended by adding at the end the
following:
``(gg) Requirements Relating to Federal Agency Engagement
With Certain Phase I SBIR and STTR Awardees.--
``(1) Definition.--In this subsection, the term `covered
awardee' means a small business concern that--
``(A) has received multiple Phase I awards over multiple
years, as determined by the head of a Federal agency, under
the SBIR program or the STTR program of the Federal agency;
and
``(B) has not received a Phase II award--
``(i) under the SBIR program or STTR program, as the case
may be, of the Federal agency described in subparagraph (A);
or
``(ii) relating to a Phase I award described in
subparagraph (A) under the SBIR program or the STTR program
of another Federal agency.
``(2) Performance measures.--The head of each Federal
agency that participates in the SBIR program or the STTR
program shall develop performance measures for any covered
awardee relating to commercializing research or research and
development activities under the SBIR program or the STTR
program of the Federal agency.''.

SEC. [208]207. CLARIFYING THE DEFINITION OF ``PHASE III''.

(a) Phase III Awards.--Section 9(e) of the Small Business
Act (15 U.S.C. 638(e)) is 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.--The Small
Business Act (15 U.S.C. 631 et seq.) is amended--
(1) in section 9 (15 U.S.C. 638)--
(A) in subsection (e)--
(i) in paragraph (4)(C)(ii), by striking ``scientific
review criteria'' and inserting ``merit-based selection
procedures'';
(ii) in paragraph (9), by striking ``the second or the
third phase'' and inserting ``Phase II or Phase III''; and
(iii) 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).'';
(B) in subsection (j)--
(i) in paragraph (1)(B), by striking ``phase two'' and
inserting ``Phase II'';
(ii) in paragraph (2)--

(I) in subparagraph (B)--

(aa) by striking ``the third phase'' each place it appears
and inserting ``Phase III''; and
(bb) by striking ``the second phase'' and inserting ``Phase
II'';

(II) in subparagraph (D)--

(aa) by striking ``the first phase'' and inserting ``Phase
I''; and
(bb) 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)--

(aa) by striking ``the first phase'' and inserting ``Phase
I''; and
(bb) by striking ``the second phase'' and inserting ``Phase
II''; and

(V) in subparagraph (H)--

(aa) by striking ``the first phase'' and inserting ``Phase
I'';
(bb) by striking ``second phase'' each place it appears and
inserting ``Phase II''; and
(cc) by striking ``third phase'' and inserting ``Phase
III''; and
(iii) in paragraph (3)--

(I) in subparagraph (A)--

(aa) by striking ``the first phase (as described in
subsection (e)(4)(A))'' and inserting ``Phase I'';

[[Page S1627]]

(bb) by striking ``the second phase (as described in
subsection (e)(4)(B))'' and inserting ``Phase II''; and
(cc) 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'';

(C) in subsection (k)--
(i) by striking ``first phase'' each place it appears and
inserting ``Phase I''; and
(ii) by striking ``second phase'' each place it appears and
inserting ``Phase II'';
(D) in subsection (l)(2)--
(i) by striking ``the first phase'' and inserting ``Phase
I''; and
(ii) by striking ``the second phase'' and inserting ``Phase
II'';
(E) in subsection (o)(13)--
(i) in subparagraph (B), by striking ``second phase'' and
inserting ``Phase II''; and
(ii) in subparagraph (C), by striking ``third phase'' and
inserting ``Phase III'';
(F) in subsection (p)--
(i) in paragraph (2)(B)--

(I) in clause (vi)--

(aa) by striking ``the second phase'' and inserting ``Phase
II''; and
(bb) by striking ``the third phase'' and inserting ``Phase
III''; and

(II) in clause (ix)--

(aa) by striking ``the first phase'' and inserting ``Phase
I''; and
(bb) by striking ``the second phase'' and inserting ``Phase
II''; and
(ii) 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)(A))'' and inserting ``Phase III'';

(G) in subsection (q)(3)--
(i) in subparagraph (A)--

(I) in the subparagraph heading, by striking ``First
phase'' and inserting ``Phase i''; and
(II) by striking ``first phase'' and inserting ``Phase I'';
and

(ii) in subparagraph (B)--

(I) in the subparagraph heading, by striking ``Second
phase'' and inserting ``Phase ii''; and
(II) by striking ``second phase'' and inserting ``Phase
II'';

(H) in subsection (r)--
(i) in the subsection heading, by striking ``Third Phase''
and inserting ``Phase III'';
(ii) in paragraph (1)--

(I) in the first sentence--

(aa) by striking ``for the second phase'' and inserting
``for Phase II'';
(bb) by striking ``third phase'' and inserting ``Phase
III''; and
(cc) by striking ``second phase period'' and inserting
``Phase II period''; and

(II) in the second sentence--

(aa) by striking ``second phase'' and inserting ``Phase
II''; and
(bb) by striking ``third phase'' and inserting ``Phase
III''; and
(iii) in paragraph (2), by striking ``third phase'' and
inserting ``Phase III''; and
(I) in subsection (u)(2)(B), by striking ``the first
phase'' and inserting ``Phase I''; and
(2) in section 34(c)(2)(B)(vii) (15 U.S.C.
657e(c)(2)(B)(vii)), as redesignated by section 201 of this
Act, by striking ``third phase'' and inserting ``Phase III''.

SEC. [209]208. SHORTENED PERIOD FOR FINAL DECISIONS ON
PROPOSALS AND APPLICATIONS.

(a) In General.--Section 9 of the Small Business Act (15
U.S.C. 638) is 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.--
(1) In general.--Section 9 of the Small Business Act (15
U.S.C. 638), as amended by this Act, is amended by adding at
the end the following:
``(hh) NIH Peer Review Process.--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 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).''.
(2) Technical and conforming amendments.--Section 105 of
the National Institutes of Health Reform Act of 2006 (42
U.S.C. 284n) is amended--
(A) in subsection (a)(3)--
(i) by striking ``A grant'' and inserting ``Except as
provided in section 9(hh) of the Small Business Act (15
U.S.C. 638(hh)), a grant''; and
(ii) by striking ``section 402(k)'' and all that follows
through ``Act)'' and inserting ``section 402(l) of such
Act''; and
(B) in subsection (b)(5)--
(i) by striking ``A grant'' and inserting ``Except as
provided in section 9(hh) of the Small Business Act (15
U.S.C. 638(hh)), a grant''; and
(ii) by striking ``section 402(k)'' and all that follows
through ``Act)'' and inserting ``section 402(l) of such
Act''.

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)),
as amended by section 102 of this Act, 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); and
``(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 investment (including
those majority-owned by multiple venture capital operating
companies) 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 (cc) for firms owned in majority part by venture
capital operating companies 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
(2) by inserting after paragraph (7) the following:
``(8) 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))
is 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 or is majority-owned by multiple
venture capital operating companies, and, if so--

``(I) the amount of venture capital 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) received assistance under the FAST program under
section 34, as in effect on the day before the date of
enactment of the SBIR/STTR Reauthorization Act of 2011, or
the outreach program under subsection (s);
``(vi) 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
``(vii) 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))
is 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

[[Page S1628]]

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 or is majority-owned by multiple
venture capital operating companies, and, if so--

``(I) the amount of venture capital 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) received assistance under the FAST program under
section 34 or the outreach program under subsection (s);
``(vi) 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
``(vii) 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 and, if so, whether the small
business concern is registered as majority-owned by multiple
venture capital operating companies as required under
subsection (cc)(4);
``(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;
``(iv) received assistance under the FAST program under
section 34, as in effect on the day before the date of
enactment of the SBIR/STTR Reauthorization Act of 2011, or
the outreach program under subsection (s); or
``(v) 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 SBIR/STTR Reauthorization 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 of key individuals that will carry out the
project;
``(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; 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, and, if
so--

``(I) the amount of venture capital as of the date of the
award;
``(II) the percentage of ownership of the awardee held by a
venture capital operating company, including whether the
awardee is majority-owned by multiple venture capital
operating companies; 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 committed fraud, waste, or
abuse relating to 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;
(C) assess whether it would be more consistent and
effective to base the amount of the allocations under the
SBIR program and the STTR program on a percentage of the
research and development budget of a Federal agency, rather
than the extramural budget of the Federal agency; and
(D) 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 of the House of Representatives regarding the audit
conducted under paragraph (1), including the assessments
required under subparagraphs (B) and (C), and the
determination made under subparagraph (D) 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.--

[[Page S1629]]

``(1) In general.--Not later than 6 months after the date
of enactment of the SBIR/STTR Reauthorization 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 SBIR/
STTR Reauthorization Act of 2011, and every 4 years
thereafter--
``(A) continue the most recent study under this section
relating to--
``(i) the issues described in subparagraphs (A), (B), (C),
and (E) of subsection (a)(1); and
``(ii) 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;
``(B) make recommendations with respect to the issues
described in subparagraph (A)(ii) and subparagraphs (A), (D),
and (E) of subsection (a)(2)[.]; and
``(C) 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 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 not later than 4 years after the date of
enactment of the SBIR/STTR Reauthorization 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 of the House of
Representatives a report regarding the study conducted under
paragraph (1) and containing the recommendations described in
paragraph (1).''.

SEC. 308. TECHNOLOGY INSERTION REPORTING REQUIREMENTS.

Section 9 of the Small Business Act (15 U.S.C. 638), as
amended by this Act, is amended by adding at the end the
following:
``(ii) 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. INTELLECTUAL PROPERTY PROTECTIONS.

(a) In General.--The Comptroller General of the United
States shall conduct a study of the SBIR program to assess
whether--
(1) Federal agencies comply with the data rights
protections for SBIR awardees and the technologies of SBIR
awardees under section 9 of the Small Business Act (15 U.S.C.
638);
(2) the laws and policy directives intended to clarify the
scope of data rights, including in prototypes and mentor-
protege relationships and agreements with Federal
laboratories, are sufficient to protect SBIR awardees; and
(3) there is an effective grievance tracking process for
SBIR awardees who have grievances against a Federal agency
regarding data rights and a process for resolving those
grievances.
(b) Report.--Not later than 18 months after the date of
enactment of this Act, the Comptroller General shall submit
to the Committee on Small Business and Entrepreneurship of
the Senate and the Committee on Small Business of the House
of Representatives a report regarding the study conducted
under subsection (a).

SEC. 310. 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 amended by adding at the end the
following:
``(jj) 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. 311. 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 amended by adding at
the end the following:
``(kk) 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 the waste, fraud, and abuse prevention
activities described in section 313(a)(1)(B)(ii) of the SBIR/
STTR Reauthorization Act of 2011;
``(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 (cc);
``(I) carrying out subsection (ff);
``(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.''.
(b) Technical and Conforming Amendments.--
(1) In general.--Section 9 of the Small Business Act (15
U.S.C. 638) is amended--
(A) in subsection (f)(2)(A), as so designated by section
103(2) of this Act, 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), as amended by section [204] 203--
(i) by striking paragraph (4);
(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)(A) 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 (kk)(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)(A), by striking ``shall not make
available for the purpose'' and inserting the following:
``shall not--
``(i) 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
``(ii) 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.''.

[[Page S1630]]

SEC. 312. GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING
COMPANY INVOLVEMENT.

Not later than 3 years after the date of enactment of this
Act, and every 3 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 involvement under
section 9(cc) of the Small Business Act, as added by section
108 of this Act; and
(2) submit to Congress a report regarding the study
conducted under paragraph (1).

SEC. 313. REDUCING VULNERABILITY OF SBIR AND STTR PROGRAMS TO
FRAUD, WASTE, AND ABUSE.

(a) Fraud, Waste, and Abuse Prevention.--
(1) Guidelines for fraud, waste, and abuse prevention.--
(A) Amendments required.--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.
(B) Content of amendments.--The amendments required under
subparagraph (A) shall include--
(i) definitions or descriptions of fraud, waste, and abuse;
(ii) a requirement that the Inspectors General of each
Federal agency that participates in the SBIR program or the
STTR program cooperate to--

(I) establish fraud detection indicators;
(II) review regulations and operating procedures of the
Federal agencies;
(III) coordinate information sharing between the Federal
agencies; and
(IV) improve the education and training of, and outreach
to--

(aa) administrators of the SBIR program and the STTR
program of each Federal agency;
(bb) applicants to the SBIR program or the STTR program;
and
(cc) recipients of awards under the SBIR program or the
STTR program;
(iii) guidelines for the monitoring and oversight of
applicants to and recipients of awards under the SBIR program
or the STTR program; and
(iv) a requirement that each Federal agency that
participates in the SBIR program or STTR program include the
telephone number of the hotline established under paragraph
(2)--

(I) on the Web site 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.

(2) Fraud, waste, and abuse prevention hotline.--
(A) Hotline established.--The Administrator shall establish
a telephone hotline that allows individuals to report fraud,
waste, and abuse in the SBIR program or STTR program.
(B) Publication.--The Administrator shall include the
telephone number for the hotline established under
subparagraph (A) on the Web site of the Administration.
(b) Study and Report.--
(1) Study.--Not later than 1 year after the date of
enactment of this Act, and every 3 years thereafter, the
Comptroller General of the United States shall--
(A) conduct a study that evaluates--
(i) 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);
(ii) 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;
(iii) 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;
(iv) 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;
(v) 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
(vi) the extent to which the Inspector General of each
Federal agency that participates in the SBIR program or STTR
program effectively conducts investigations of individuals
alleged to have submitted false claims or violated Federal
law relating to fraud, conflicts of interest, bribery,
gratuity, or other misconduct; and
(B) submit to the Committee on Small Business and
Entrepreneurship of the Senate, the Committee on Small
Business 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. 314. INTERAGENCY POLICY COMMITTEE.

(a) Establishment.--The Director of the Office of Science
and Technology Policy (in this section referred to as the
``Director''), in conjunction with the Administrator, shall
establish an Interagency SBIR/STTR Policy Committee (in this
section referred to as the ``Committee'') comprised of 1
representative from each Federal agency with an SBIR program
or an STTR program and 1 representative of the Office of
Management and Budget.
(b) Cochairpersons.--The Director and the Administrator
shall serve as cochairpersons of the Committee.
(c) Duties.--The Committee shall review, and make policy
recommendations on ways to improve the effectiveness and
efficiency of, the SBIR program and the STTR program,
including--
(1) reviewing the effectiveness of the public and
government databases described in section 9(k) of the Small
Business Act (15 U.S.C. 638(k));
(2) identifying--
(A) best practices for commercialization assistance by
Federal agencies that have significant potential to be
employed by other Federal agencies; and
(B) proposals by Federal agencies for initiatives to
address challenges for small business concerns in obtaining
funding after a Phase II award ends and before
commercialization; and
(3) developing and incorporating a standard evaluation
framework to enable systematic assessment of the SBIR program
and STTR program, including through improved tracking of
awards and outcomes and development of performance measures
for the SBIR program and STTR program of each Federal agency.
(d) Reports.--The Committee shall submit to the Committee
on Small Business and Entrepreneurship of the Senate and the
Committee on Science and Technology and the Committee on
Small Business of the House of Representatives--
(1) a report on the review by and recommendations of the
Committee under subsection (c)(1) not later than 1 year after
the date of enactment of this Act;
(2) a report on the review by and recommendations of the
Committee under subsection (c)(2) not later than 18 months
after the date of enactment of this Act; and
(3) a report on the review by and recommendations of the
Committee under subsection (c)(3) not later than 2 years
after the date of enactment of this Act.

SEC. 315. 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.''.

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. RESEARCH TOPICS AND PROGRAM DIVERSIFICATION.

(a) SBIR Program.--Section 9(g) of the Small Business Act
(15 U.S.C. 638(g)) is amended--
(1) in paragraph (3)--
(A) in the matter preceding subparagraph (A), by striking
``broad research topics and to topics that further 1 or more
critical technologies'' and inserting ``applications to the
Federal agency for support of projects relating to
nanotechnology, rare diseases, security, energy,
transportation, or improving the security and quality of the
water supply of the United States, and the efficiency of
water delivery systems and usage patterns in the United
States (including the territories of the United States)
through the use of technology (to the extent that the
projects relate to the mission of the Federal agency), broad
research topics, and topics that further 1 or more critical
technologies or research priorities'';
(B) in subparagraph (A), by striking ``or'' at the end; and
(C) by adding at the end the following:
``(C) the National Academy of Sciences, in the final report
issued by the `America's Energy Future: Technology
Opportunities,

[[Page S1631]]

Risks, and Tradeoffs' project, and in any subsequent report
by the National Academy of Sciences on sustainability,
energy, or alternative fuels;
``(D) the National Institutes of Health, in the annual
report on the rare diseases research activities of the
National Institutes of Health for fiscal year 2005, and in
any subsequent report by the National Institutes of Health on
rare diseases research activities;
``(E) the National Academy of Sciences, in the final report
issued by the `Transit Research and Development: Federal Role
in the National Program' project and the report entitled
`Transportation Research, Development and Technology
Strategic Plan (2006-2010)' issued by the Research and
Innovative Technology Administration of the Department of
Transportation, and in any subsequent report issued by the
National Academy of Sciences or the Department of
Transportation on transportation and infrastructure; or
``(F) the national nanotechnology strategic plan required
under section 2(c)(4) of the 21st Century Nanotechnology
Research and Development Act (15 U.S.C. 7501(c)(4)) and in
any report issued by the National Science and Technology
Council Committee on Technology that focuses on areas of
nanotechnology identified in such plan;''; and
(2) by adding after paragraph (12), as added by section
111(a) of this Act, the following:
``(13) encourage applications under the SBIR program (to
the extent that the projects relate to the mission of the
Federal agency)--
``(A) from small business concerns in geographic areas
underrepresented in the SBIR program or located in rural
areas (as defined in section 1393(a)(2) of the Internal
Revenue Code of 1986);
``(B) small business concerns owned and controlled by
women;
``(C) small business concerns owned and controlled by
veterans;
``(D) small business concerns owned and controlled by
Native Americans; and
``(E) small business concerns located in a geographic area
with an unemployment rates that exceed the national
unemployment rate, based on the most recently available
monthly publications of the Bureau of Labor Statistics of the
Department of Labor.''.
(b) STTR Program.--Section 9(o) of the Small Business Act
(15 U.S.C. 638(o)), as amended by section 111(b) of this Act,
is amended--
(1) in paragraph (3)--
(A) in the matter preceding subparagraph (A), by striking
``broad research topics and to topics that further 1 or more
critical technologies'' and inserting ``applications to the
Federal agency for support of projects relating to
nanotechnology, security, energy, rare diseases,
transportation, or improving the security and quality of the
water supply of the United States (to the extent that the
projects relate to the mission of the Federal agency), broad
research topics, and topics that further 1 or more critical
technologies or research priorities'';
(B) in subparagraph (A), by striking ``or'' at the end; and
(C) by adding at the end the following:
``(C) the National Academy of Sciences, in the final report
issued by the `America's Energy Future: Technology
Opportunities, Risks, and Tradeoffs' project, and in any
subsequent report by the National Academy of Sciences on
sustainability, energy, or alternative fuels;
``(D) the National Institutes of Health, in the annual
report on the rare diseases research activities of the
National Institutes of Health for fiscal year 2005, and in
any subsequent report by the National Institutes of Health on
rare diseases research activities;
``(E) the National Academy of Sciences, in the final report
issued by the `Transit Research and Development: Federal Role
in the National Program' project and the report entitled
`Transportation Research, Development and Technology
Strategic Plan (2006-2010)' issued by the Research and
Innovative Technology Administration of the Department of
Transportation, and in any subsequent report issued by the
National Academy of Sciences or the Department of
Transportation on transportation and infrastructure; or
``(F) the national nanotechnology strategic plan required
under section 2(c)(4) of the 21st Century Nanotechnology
Research and Development Act (15 U.S.C. 7501(c)(4)) and in
any report issued by the National Science and Technology
Council Committee on Technology that focuses on areas of
nanotechnology identified in such plan;'';
(2) in paragraph (15), by striking ``and'' at the end;
(3) in paragraph (16), by striking the period at the end
and inserting ``; and''; and
(4) by adding at the end the following:
``(17) encourage applications under the STTR program (to
the extent that the projects relate to the mission of the
Federal agency)--
``(A) from small business concerns in geographic areas
underrepresented in the STTR program or located in rural
areas (as defined in section 1393(a)(2) of the Internal
Revenue Code of 1986);
``(B) small business concerns owned and controlled by
women;
``(C) small business concerns owned and controlled by
veterans;
``(D) small business concerns owned and controlled by
Native Americans; and
``(E) small business concerns located in a geographic area
with an unemployment rates that exceed the national
unemployment rate, based on the most recently available
monthly publications of the Bureau of Labor Statistics of the
Department of Labor.''.
(c) Research and Development Focus.--Section 9(x) of the
Small Business Act (15 U.S.C. 638(x)) is amended--
(1) by striking paragraph (2); and
(2) by redesignating paragraph (3) as paragraph (2).

SEC. 502. 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 amended by adding at the end the
following:
``(ll) 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 and Technology of the House of Representatives.''.

SEC. 503. 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 amended by adding at the end the
following:
``(mm) 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.''.

Ms. LANDRIEU. Madam President, I ask unanimous consent that in
proceeding to the consideration of S. 493 there be a period of debate
until noon.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Ms. LANDRIEU. Madam President, I appreciate the cooperation of both
leaders to help us get to the floor this morning for a debate on this
very important piece of legislation and one that we have actually and,
unfortunately, struggled with for the last two Congresses.
The Acting President pro tempore knows, as a member of the Small
Business Committee and as a Senator from New Hampshire, how important
this piece of legislation is as we continue to fight--and that is what
the word is, ``fight''--to create jobs right here at home in America,
not just on Wall Street, not just in the fancy places, but on Main
Street in our hometowns all over America.
Senator Snowe and I are on the Senate floor today together, happily,
to talk about a bill into which she has put a tremendous amount of time
and effort before as the chair of the committee. I serve as the chair
of the committee, and she is my very able ranking member. Together our
staffs have worked very closely for a long period of time to try to
fashion the compromise that is before the Senate today.
I thank the 84, I believe, Members of the Senate who voted for
cloture last night. I know the rules of the Senate are strange, still,
to many Americans. But we cannot operate without unanimous consent. So
it takes an extra special level of cooperation. While we did not get
everyone last night to go on the record, we did get the prerequisite
number--above 60--to move to this debate. I am hoping our amendment
process can be very smooth, that we stay focused on small business-
related amendments, that we work in good faith, and, hopefully, in the
next couple of days we can get this bill off the floor because this is
a job creator.

[[Page S1632]]

One of the Senators was here earlier this morning talking about
creating an atmosphere for job growth and development. Tax codes do
some of that, Federal investments in infrastructure do that,
investments in education do that. But one other thing that does it is
fashioning Federal programs that work for the job creators of America,
and that is what the SBIR Program does and the STTR Program does. It is
the Federal Government's largest research and development investment
program for small businesses. It was created actually 30 years ago, and
the idea developed from one of our outstanding Federal workers.
Roland Tibbetts was a staffer at the National Science Foundation. He
took the lead in 1976 in directing a greater and more significant share
of the research and development budget of the National Science
Foundation and directed it to small business in a new innovation
program.
Why did he do this? He did it because from his position, directing a
very established and strong research component, he saw the Federal
Government giving most of its awards to large businesses. I think--
although I have not spoken to him personally; but I most certainly
intend to because he has testified before former committees--I am
imagining he probably had a heart for actually wanting to find cures
for some diseases and realized that not all of that technology and
innovation rested with the large companies; that, in fact, there might
be small pharmaceutical companies or brilliant scientists in Maine or
in New Hampshire or in Louisiana who had discovered or had the
potential to discover something that could be transformative. So this
staffer said: Let's set aside or direct a small portion, but an
important portion, to small businesses. That is how this program began.
I am so pleased with this funding, which only government can do. Only
government can do this. There are certain things the private sector
does well. They do venture capital when an idea has been proven or when
the potential has clearly been established or when the potential is at
least clearly established in the mind of one or two individuals--such
as the guy who created Facebook or Bill Gates with Microsoft. But
mostly great ideas need early, patient capital--very risky, but when it
hits, it hits big.
That is what this program does. It sets aside 2.5 to 3 percent of all
the research and development budgets of all the Federal agencies
ranging from the Department of Defense, which is about $1 billion that
would be contributed to this program, down to the smaller agencies,
which have maybe up to a couple million dollars in their research
budgets. But out of that very pilot-like initiative back in 1976, that
was focused on discovering, funding, and evaluating the initial highest
risk, most cost-cutting exploratory research that is necessary to
achieve significant technological innovations and breakthroughs, this
program was created.
Let me share with you what a gentleman who testified before our
committee--we have had several hearings on this particular program, and
no program is perfect. Let me begin with this: This program is not
perfect. But we are perfecting it as we bring this bill to you. We have
looked at its weaknesses. We have tried in our reauthorization to
correct those, to firm those up. But the gentleman who is actually
probably the leading expert on this program, Dr. Wessner, of the
National Research Council, recently testified before our committee. He
said:

An important point to keep in mind is [that] you can have
really good ideas that die. They will die because they do not
have funding.

Not because they do not have potential but because they do not have
funding. I would add to this, particularly in this time of recession
and tightening back on capital and the closing down of credit card
lending: If you think it is normally tough for entrepreneurs and
innovators and discoverers and inventors to get capital, it has been a
very rocky road in the last year or two. So he said these ideas just
die.
He said:

SBIR brings capital to transform those ideas into
innovations. You are not done then . . . but that gets you
the innovation and product development and the start of the
uptake. . . . The rest of the world thinks this is the
greatest thing since sliced bread. . . . The rest of the
world is copying it, putting it on steroids, while we are
debating it.

That is the point I want to make. We have debated the reauthorization
of this legislation for 6 years. The time has come to stop the debate,
pass the bill, and recognize this is a world model. No program is
perfect. But the wisdom and the importance of setting aside a small
portion of the research and development programs of all the Federal
agencies, and then to train our workforce and our managers to look out,
seek, and find some of the interesting technologies that could be
created and grow into big businesses is very forward thinking, and we
should be very grateful to Roland Tibbetts and the Senators and
Representatives who started this program.
Senator Warren Rudman took this idea, saw this pilot program, and
made it a national program. We have him and others to thank for the
jobs, the businesses that have been created.
Let me give you one example. The founder of Qualcomm came and
testified before our committee. Qualcomm is a very famous business. It
developed a lot of technologies that made wireless communications
possible. It started 25 years ago in the den of its founder, Dr.
Jacobs. He testified before the committee and said basically Qualcomm
was just at one time, 25 years ago, an exciting new idea. It was not a
company. It was not a business. He and 35 of his colleagues consulted
and talked about the new technologies they were seeing. They got an
SBIR grant of $150,000, and then they were subsequently awarded,
because they developed the idea, to $1.5 million. They got another
grant, which are the limits of the program. This program has limits.
You have to test your idea, and then you come back for phase II
funding.
Well, Qualcomm now employs 17,500 people. They are operating in 22
countries. They paid more in taxes last year to local, State, and
Federal governments than 50 percent of the cost of this entire program.
So that is one success story. That is what I mean when I say: When it
hits, it hits big.
Now, not every company will turn into Qualcomm. But without programs
like this, there is what they call a valley of death. There are ideas
that are created out of the minds and hearts of Americans who have been
well educated, raised to believe that dreams come true, and are
encouraged to risk. We are natural risk takers. We have these ideas and
these innovations. But what happens is, if there is not that important,
early funding to develop that kind of science and technology, in large
measure some of these ideas just fall into the valley of death. We are
going to catch them. That is what this bill does. It is what it
attempts to do.
So as it has grown and developed--and we have reauthorized it over
the years--there have been some important changes and improvements.
I am going to recognize the ranking member, but I want to finish up
in just a few minutes.
In 1980, the White House Conference on Small Business echoed these
sentiments, recognized the value of the program. The end result of the
recommendation was this program, as I said, first authored by Senator
Warren Rudman. It had 84 cosponsors, 8 of whom are still serving in the
Senate: Senator Baucus, Senator Cochran, Senator Grassley, Senator
Hatch, Senator Inouye, Senator Leahy, Senator Levin, and Senator Lugar.
They all were original sponsors of this bill. I hope they are proud. In
their careers they have sponsored many bills. I hope they are proud of
this one because it has done its job and it has helped America to
continue to honor our entrepreneurs and our inventors.

As I mentioned, Senator Rudman, a Republican from New Hampshire, and
once a member of our committee, was the Senate champion for the
creation of the SBIR and STTR Programs. He was a true statesman--a man
of vision with regard to the importance of technology to our economy. I
wish to quote him as we begin this debate:

The issue addressed in Senate bill 881--

The bill at the time--

is one which plays an underlying role in the ability of this
Nation to maintain its security to achieve energy
independence, increase productivity, and preserve the quality
of life we all enjoy. Our national strength and confidence in
these areas depend upon maintaining a leading role in
technological superiority.

[[Page S1633]]

That is what he said in his opening statement at the Senate
Subcommittee on Innovation and Technology on June 30, 1981.
Senator Snowe was in the House at the time. She was a Congresswoman
when President Reagan signed this legislation, creating it in 1982. She
quoted from President Reagan. I know she will probably remember this
and I think it is worth repeating:

Our nation is blessed with two important qualities that are
often missing in other societies, our spirit of
entrepreneurship and our capacity for invention and
innovation. These two elements are combined in the small
businesses that dot our land.

I am proud to bring this bill to the floor. It has had
extraordinarily positive and noble champions since its beginning. As I
said, no program is perfect, but we have tried in this reauthorization
to look at the places where the program is weak and strengthen it. I
will go through some of those details in the latter part of the
afternoon. But for an overview this morning, I wanted to give more of a
historical context of this bill, and to thank the Members for moving so
quickly at our request to the bill.
I look forward to the debate. I hope Members will be responsible in
offering their amendments. I know the time for debate on the floor is
precious. We wish to limit debate to be focused around the principles,
at least, and the details of this bill as best we can so we can get
this program reauthorized. Then we can continue to be the leaders in
cutting-edge innovation, and the Federal Government can do its part--an
important part--that venture capitalists can't do, big banks don't want
to do, investment bankers aren't made to do, and small community banks
don't do in this kind of lending. Only patient, directed capital can
give that boost over the valley of death and create that bridge so
small businesses and our scientists and engineers can walk over it
safely.
I wish to recognize at this time my ranking member and thank her for
her support of this legislation from its beginning and her championship
to this day.
For clarification purposes, the time until noon will be for debate
only and no amendments until after lunch.
I yield to Senator Snowe.
The PRESIDING OFFICER (Mr. Tester). The Senator from Maine.
Ms. SNOWE. Mr. President, first I wish to commend the Chair of the
Small Business Committee. She has done an extraordinary job in bringing
this legislation to the floor in a bipartisan fashion, which I think is
so essential to ensuring the passage of this legislation which, suffice
it to say, has been long overdue. It has been on a long journey since
2008 in terms of extensions and reextensions, but we have never been
able to accomplish a reauthorization for a variety of reasons which I
will explain later in my statement. But I do wish to congratulate the
Chair for working mightily on both sides of the aisle and in the
committee, accommodating bipartisanship by allowing the new members of
the committee--particularly on our side of the aisle where we have five
new members of the committee--who were not able to have the opportunity
to review this legislation as new Members of the Senate because we had
passed this unanimously in the last session of Congress. So she did
hold a hearing and a markup to accommodate those views and give them a
chance to review this legislation as well as to amend it in the
committee. I know some of the Members will have amendments they will
offer on the floor as well. So I wish to thank the Chair for
accommodating those various issues and the members of the committee as
they attempted their new duties as members of the Small Business
Committee.
I also wish to thank the Chair for working through these issues
diligently, because these are two critical programs, as she indicated
in her opening statement, that are crucial to small businesses, but
also important to innovation in America.
Reauthorizing both the SBIR and the STTR Programs represents a
profound opportunity for us to reaffirm the truth in the optimistic
vision of America that indeed it is small businesses that are going to
make the contributions not only for job creation but through their
innovation and inventions, as the Chair mentioned, with President
Reagan's comments many years ago. That is why I am very excited about
reauthorizing these programs, which foster an environment of innovative
entrepreneurship by directing more than $2 billion annually in Federal
research and development funding to the Nation's small firms most
likely to create jobs and commercialize their products.
Small businesses are our Nation's job generators, employing more than
half of all private-sector employees and creating 64 percent of the net
new jobs over the past 15 years. They also represent 99.7 percent of
all employer firms. Furthermore, small businesses are our Nation's most
effective innovators, producing roughly 13 times more patents per
employee than large firms--patents which are at least two times as
likely to be among the top 1 percent of high-impact patents. Recipients
of both of these programs have produced more than 85,000 patents and
have generated millions of well-paying jobs across all 50 States. It is
crucial, then, that both of these programs--one of the strongest
examples of a successful public-private partnership--be a key part of
our job creation agenda.
The SBIR program got its start at the National Science Foundation
back in 1976 following growing concerns that small businesses were not
receiving an adequate share of Federal research and development funding
despite their prominent role in innovation. It was officially
established in law as part of the Small Business Innovation Development
Act of 1982. As the Chair indicated, I was an original cosponsor in the
House--hopefully that is not dating myself too much--which set four
goals for the program: stimulate technological innovation; use small
business to meet Federal R&D funds; foster and encourage participation
by minority and disadvantaged persons in the technological innovation;
and increase private-sector commercialization of innovation derived
from Federal R&D.
The STTR program was established in 1992 to complement the SBIR
program by stimulating partnerships between small businesses and
nonprofit research institutions such as universities and research
laboratories. Together, these vital job creation programs have provided
small firms with over $28 billion during their lifespans.
These programs have been front and center in improving our Nation's
capacity to be innovative. According to a report by the Information
Technology and Innovation Foundation, SBIR-backed firms have been
responsible for roughly 25 percent of the Nation's most crucial
innovations over the past decade--``a powerful indication that the SBIR
program has become a key force in the innovation economy of the United
States.''
Furthermore, a comprehensive 2008 National Academy of Sciences study
of the SBIR program noted that more than 20 percent of companies
responding to their survey noted they were founded entirely, or at
least in part, because of a prospective SBIR award, and a full two-
thirds said the projects they performed would not have taken place
without the funding. Just under half of the projects pursued in the
SBIR program reached the marketplace, bringing countless new
innovations to our everyday lives. Additionally, the study noted that
over one-third of the companies awarded SBIR funding participate in the
program for the first time each year, thus . . . ``encouraging
innovation across a broad spectrum of firms.'' It concludes that SBIR
is ``sound in concept and effective in practice.''
In fact, there is a wide range of remarkable success stories
associated with the SBIR program, including Qualcomm, which the Chair
mentioned, which is a remarkable story. Qualcomm received roughly $1.5
billion in SBIR grants to pursue several innovative programs and
develop breakthrough technologies. Now it employs 17,500 individuals
worldwide with an annual revenue of $11 billion. In fiscal year 2010
alone, Qualcomm paid $1.4 billion in Federal, State, and local taxes--a
significant return on investment.
Another example of SBIR's success is LASIK eye surgery. The company
behind the technology for the procedure received SBIR awards from both
NASA and the Department of Defense. In the 1980s, NASA awarded funding
for a project developing technology for

[[Page S1634]]

docking of space vehicles to satellites by pointing laser beams. This
concept was then applied to develop LASIK, which corrects vision
problems.
The technology that went into the Sonicare electronic toothbrush was
funded by an SBIR award. According to NIH, which made the award, SBIR
funding allowed the firm that developed the technology to create a $300
million business, employing over 500 individuals.
In my home State of Maine, Tex Tech Industries has researched and
developed high-tech textiles that are used in body armor for U.S.
troops and bulletproof vests for public safety personnel. Tex Tech also
developed a fire-resistant material to be used as the primary fire
barrier in the seating cabins of new commercial aircraft.
Additionally, BioSciCon in Maryland is responsible for the MarkPap
system, which is a diagnostic device that tests for cervical cancer and
can be used as a research tool to improve cervical cancer screening.
Other companies such as Symantec, which makes antivirus software for
computers, and Genzyme, one of the world's leading biotechnology firms,
all received SBIR funding at some point during their formative years.
Some of these firms are now household names; others are still small
businesses with a plethora of novel ideas.
As these examples demonstrate, SBIR funding has helped small
businesses nationwide develop incredible breakthrough technologies for
a whole host of applications. These are innovations we use in our
everyday lives, that help strengthen our national defense, improve our
health, and boost our competitiveness. Regrettably the SBIR program
expired in September 2008 and has been subject to a series of 10 short-
term, temporary extensions since then, plaguing the programs with
uncertainty and potentially dissuading some of our Nation's most
promising firms from participating in them. This is legislation that
our committee has worked to have signed into law for nearly 6 years--
since the time, in fact, when I was chair of the committee. Indeed, we
passed legislation out of the Small Business Committee unanimously in
2006 to preempt this stalemate by making improvements to the program
and doubling the SBIR allocation from 2.5 percent to 5 percent over 5
years, and doubling the STTR allocation immediately.
Last Congress, with our Chair, we once again passed legislation out
of our committee unanimously which was very similar to the bill we
reported out in the previous Congress. Specifically, it maintained the
allocation increases spread out incrementally that had been developed
in the previous Congress as a compromise, as well as the 18-and-8
compromise on the venture capital issue. This time, the full Senate
passed the legislation unanimously and sent it to the House of
Representatives, where the bill sat.
The legislation we are debating today is very similar to the bill we
passed out unanimously 3 months ago. But we have already wasted too
much time over the past several years, and it is now vitally critical
that we act now and pass this legislation to provide these crucial
innovation initiatives with certainty for the future. As the U.S.
Chamber of Commerce has noted:

[E]ven though this important program for the small business
has a proven track record of success, its full potential has
been held hostage by a series of short-term reauthorizations
which has created uncertainty for SBIR program managers and
limitations for potential small business grant recipients.

As in the previous two Congresses, our legislation increases the
allocation for SBIR from 2.5 percent of an agency's extramural research
and development to 3.5 percent for over 10 years, and doubles the STTR
allocations from 0.3 to 0.6 percent over 5 years. This means the
Federal Government can make more awards to a greater number of small
businesses out of its existing research and development budget. It
would also codify increased award sizes of $150,000 for phase I and $1
million for phase II in the SBIR program, and apply those levels to the
STTR program as well to adjust for inflation. The last statutory
increase in award sizes for the SBIR program was 19 years ago as part
of the 1992 reauthorization.
It is critical that we bring the program into the 21st century to
acknowledge the growing costs of quality research.
Furthermore, in December, Chair Landrieu and I sent a letter to SBA
Administrator Karen Mills stating that rooting out fraud and abuse in
the agency's program will be our committee's first priority this
Congress. To that end, this bill includes stringent oversight and fraud
prevention measures, requiring inspectors general of participating
Federal agencies to establish fraud detection measures.
In a similar vein, the legislation includes a series of data-
collection provisions that we worked on with Senator Coburn to ensure
we have a better base of information to use when considering future
policy changes to the programs and engaging in necessary oversight.
This reauthorization act contains an unprecedented compromise on the
venture capital issue which has long bogged down any serious progress
in reauthorizing these valuable programs. It would make firms majority
owned by multiple venture capital companies eligible for up to 25
percent of SBIR funds at the National Institute of Health, National
Science Foundation, and Department of Energy, and up to 15 percent of
the funds at the remaining agencies. My longstanding guiding principle
on reauthorization of these programs has been simple: These are small
business programs, not big business programs or venture capital
programs. I have worked closely with Chair Landrieu to ensure changes
we make to these programs keep it squarely as a small business program.
The unprecedented landmark compromise on the venture capital issue
passes this test. Our compromise has the backing of diverse
stakeholders, from the U.S. Chamber of Commerce, NFIB, Small Business
Technology Council, to the Biotechnology Industry Organization, the
National Venture Capital Association, and a whole host of other
organizations, as we can see on this chart.
It is critical to note that funding for both of these programs is
meant to serve as early-stage seed capital for eligible small
businesses. In general, venture capital companies invest in firms that
are further along in their development and commercialization, and they
focus on larger investments that are easier to manage than is normally
appropriate for many small, innovative technology firms. Nonetheless,
particularly for firms in the biotechnology industry, venture capital
investment is essentially a necessity to commercialize their
technology.
Here is what some of the groups endorsing our legislation have to say
about the compromise we arrived at. Mr. President, I ask unanimous
consent to have printed in the Record letters of support we have
received regarding this legislation, as well as the report from the
Information Technology and Innovation Foundation I referenced earlier.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Chamber of Commerce of the

United States of America,

Washington, DC, March 8, 2011.
Hon. Mary L. Landrieu,
Chairwoman, Committee on Small Business and Entrepreneurship,
U.S. Senate, Washington, DC.
Hon. Olympia J. Snowe,
Ranking Member, Committee on Small Business and
Entrepreneurship, U.S. Senate, Washington, DC.
Dear Chairwoman Landrieu and Ranking Member Snowe: The U.S.
Chamber of Commerce, the world's largest business federation
representing the interests of more than three million
businesses and organizations of every size, sector, and
region, strongly supports S. 493, the ``SBIR/STTR
Reauthorization Act of 2011,'' which, if enacted into law,
would unleash the innovative talents of our nation's
entrepreneurs to help create jobs and revive the economy.
The Small Business Innovative Research Program (SBIR)
serves as an important avenue by which agencies harness the
creativity and ingenuity of small business to meet specific
research and development needs of the Federal government. In
effect, this program requires federal agencies with a certain
level of research dollars to give a small percentage of those
dollars to small businesses through a competitive grant
process.
Even though this important program for small business has a
proven track record of success, its full potential has been
held hostage by a series of short-term reauthorizations which
has created uncertainty for SBIR program managers and
limitations for potential small business grant recipients.
This landmark compromise bill, if passed into law, would
unlock the door for entry for businesses that acquire equity
funding

[[Page S1635]]

through venture capital firms without diminishing the
programs effectiveness for traditional small businesses, thus
setting the stage for a robust and revitalized SBIR program.
Ninety-six percent of the Chamber's members are small
businesses with fewer than one-hundred employees. On behalf
of our smaller members, we thank you for introducing the
``SBIR/STTR Reauthorization Act of 2011'' and look forward to
working with you to expeditiously pass it into law.
Sincerely,
R. Bruce Josten.
____

CONNECT,

Washington, DC, March 8, 2011.
Hon. Mary Landrieu,
Hon. Olympia Snowe,
U.S. Senate, Small Business and Entrepreneurship Committee,
Russell Senate Office Building, Washington, DC.
Dear Chair Landrieu and Ranking Member Snowe: As the
Committee meets to markup S. 493--the SBIR/STTR
Reauthorization Act of 2011, I write to introduce you to
CONNECT and to encourage the Committee's support of S. 493
since the bill will have a positive impact in the formation
of start-up technology companies. The formation of such
companies will create jobs and help rejuvenate the American
economy. We appreciate your strong and consistent leadership
in shepherding previous versions of this reauthorization
through the Committee and the Senate floor.
CONNECT is an innovation accelerator with the mission to
assist entrepreneurs in their efforts to propel creative
ideas and emerging technologies to the marketplace. As a
regional innovation development organization, our
commercialization efforts in Southern California span the
spectrum of technologies from IT, wireless health, software,
clean energy, environmental, life sciences/biotech, defense
and security, and sports/action technologies. Over the last
25 years, CONNECT's commercialization capacity-building model
has helped over 2,000 start-ups and has been replicated in
numerous U.S. cities, states and regions, as well as
overseas.
From our experience, CONNECT knows that the Small Business
Innovation Research and Small Business Technology Transfer
programs can be advantageous to start-up formation, thus
CONNECT's interest in S. 493 is profound. Because acquiring
funding through traditional lending sources continues to
prove difficult in today's tight credit market, SBIR/STTR
grants provide tech start-up companies another viable chance
to compete for early-stage funding.
We recognize the delicate balance that S. 493 strikes
related to the issue of venture- backed applicants and are
grateful for the efforts made to reach an agreement. However,
we encourage the Committee to explore a more robust approach
that would increase the percentage of funds available to VC-
backed applicants because such applicants provide extra value
to the American taxpayer. Given that venture capital firms
conduct extensive due diligence reviews before investing,
venture-backed applicants have already demonstrated a strong
business plan by which to break into an industry sector. In
this time when the federal dollar needs to return revenues to
the Treasury, allowing for more VC-backed applicants
increases the likelihood that SBIR/STTR funds will create new
jobs and grow companies in a way that will generate new tax
revenue.
The Committee is right on point in proposing to increase
award amounts and adding new data collection, reporting
requirements, and performance metrics to ensure the SBIR/STTR
missions are being upheld. Although the SBIR program
allocation increase of 1% is critically important, such
allocation presents another opportunity for the Committee to
explore a more robust expansion. Because the 1% increase is
spread evenly over 10 years, further adjusting the increase
would give stakeholders plenty of notice to plan accordingly.
As the bill moves to the floor, we'd like to suggest one
new proposal that could be added to a Manager's Amendment. We
continue to hear that one of the major costs that start-ups
face are the legal costs to secure intellectual property
rights through the patent and trademark application process.
Because IP is indispensable for a start-up's growth, the
Committee should consider allowing a percentage of Phase I
awards (possibly up to one third) to be directed toward IP
acquisition.
Again, thank you for your work to advance the cause of
SBIR/STTR reauthorization. We are ready to assist you, your
staff, and other Committee members as the bill moves onto the
Senate floor.
Best wishes,
Timothy Tardibono,
Director of Public Policy.
____

DAWNBREAKER 

Rochester, New York, March 8, 2011.
Hon. Mary L. Landrieu,
Chairwoman, U.S. Senate, Committee on Small Business and
Entrepreneurship, Russell Senate Office Bldg.,
Washington, DC.
Hon. Olympia J. Snowe,
Ranking Member, U.S. Senate, Committee on Small Business and
Entrepreneurship, Russell Senate Office Bldg.,
Washington, DC.
Dear Chairwoman Landrieu and Ranking Member Snowe: I am
writing to express my support for S. 493, the ``SBIR and STTR
Reauthorization Act of 2011.'' In 2008, the National Research
Council completed a comprehensive assessment of the SBIR
program and found the program to be, ``sound in concept and
effective in practice.'' Reflecting the sentiment of the NRC
study, S. 493 preserves the program's concept and improves
its effectiveness.
This legislation ensures the economic engine of our
nation--small businesses--will have access to a larger share
of federal research funding. This is timely and necessary
given the fragile state of our economy. These programs play a
critical role in our innovation ecosystem by providing
important competitively awarded seed funding for promising
innovative ideas. With proper nurturing, these ideas will
grow into engines of economic growth and the solutions for
tomorrow's most pressing technological challenges.
Dawnbreaker is a small women-owned business and we have had
the great fortune to work side-by-side with more than 3,000
SBIR recipients since 1992. We consistently hear from SBIR
awardees about the need for increased award levels so they
can further the maturation of their technologies; more
efficient program management across the agencies; and, the
need for additional commercialization support--this bill
remedies these concerns and accomplishes a lot more.
S. 493 ensures that our nation's most important small
business research and development program will continue while
operating more efficiently. Dawnbreaker supports S. 493, and
we thank you both for your efforts to see this deserving
program reauthorized and improved.
Sincerely,
Jenny C. Servo,
President.
____

Small Business California,

San Francisco, CA, March 8, 2011.
Hon. Mary Landrieu,
Dirksen Senate Office Building,
Washington, DC.
Dear Senator Landrieu: Small Business California supports
greater private sector participation in the market for
Federal Research and Development, and especially increased
engagement of small businesses through open, merit-based, and
competitive bidding.
The R&D dollars spent at small business deliver outsized
returns. As of 2005, the Small Business Innovation Research
(SBIR) program has created over 87,000 patents. Overhead
rates at many small companies are 1/2 to 1/3rd of the
administrative costs typical of larger organizations.
The employment of scientists and engineers at small
companies has grown rapidly over the last 20 years, now
accounting for more than 50% of scientists and engineers in
the United States. Nothing could be more critical to the
competitiveness of the United States than to open the Federal
marketplace to participation by the fastest growing and the
most productive sector of the economy, America's small
businesses.
Small Business California is therefore pleased to support
S. 493 to reauthorize the highly successful SBIR program.
Sincerely,
Scott Hauge,
President.
____

National Defense Industrial

Association,

Arlington, VA, March 8, 2011.
Hon. Mary L. Landrieu,
United States Senate, Senate Committee on Small Business and
Entrepreneurship,
Washington, DC.
Dear Madam Chairwoman: On behalf of the 1,743 corporate
members and over 87,755 individual members of the National
Defense Industrial Association (NDIA), I am writing to
express our support for S. 493, the SBIR/STIR Reauthorization
Act of 2011.
Small business represents about two thirds of NDIA's total
membership and we regard the SBIR program as the nation's
most viable tool in leveraging small business resources that
employ about half of the U.S. workforce. American small
businesses currently employ more than half of all U.S.
scientists and engineers, yet have access to less than five
percent of government research and development funds. One
critical access point to those funds is the SBIR Program.
SBIR awards have led to important developments in
technologies that directly supported our war fighters.
As I have previously testified before Congress, NDIA has a
laser focus on American competitiveness in a global defense
industry that increasingly challenges our members for
primacy. We have therefore concluded that small business
resources offer our defense industry the competitive
advantages needed in these especially difficult economic
times.
Madam Chairwoman, NDIA and its member companies support S.
493 and urge the Senate to consider this bill as promptly as
possible. We thank you for your leadership and commitment to
work in support of small businesses.
If NDIA can be of any further assistance, please feel free
to have a member of your staff contact Mr. Peter Steffes,
Vice President Government Policy for NDIA.
Sincerely and respectfully,

Lawrence P. Farrell, Jr.,

Lt. General, USAF (Ret),
President and CEO.

[[Page S1636]]

____
The New England

Innovation Alliance,

March, 7, 2011.
Hon. Mary L. Landrieu,
Chair, Committee on Small Business & Entrepreneurship, United
States Senate, Washington, DC.
Dear Senator Landrieu: The New England Innovation Alliance
represents scores of small high technology businesses with a
vital interest in the SBIR and STTR programs. We know that
you understand how important this program is in creating
advanced technologies, products and jobs. However, SBIR and
STTR have been operating under ten continuing resolutions
since 2008. It is scheduled to expire on May 31, 2011. This
uncertainty has adversely affected small business and the
SBIR/STTR program, and it needs to be reauthorized
immediately.
It should be noted that NEIA companies have worked closely
with university researchers across the country, providing
over $50M in subcontracts to more than 60 universities over
the past five years. We believe that small high tech
companies and the SBIR/STTR program provide the ideal bridge
from academia to the marketplace, while providing future
employment to tens of thousands of science and engineering
graduates.
The New England Innovation Alliance supports the passage of
Senate Bill S. 493.
Respectfully,
Robert F. Weiss,
Chairman.
____

National Venture

Capital Association,

March 8, 2011.
Hon. Mary L. Landrieu,
Chairwoman, Senate Small Business Committee, U.S. Senate,
Russell Senate Office Building, Washington, DC.
Hon. Olympia J. Snowe,
Ranking Minority Member, Senate Small Business Committee,
U.S. Senate, Russell Senate Office Building, Washington,
DC.
Dear Senators Landrieu and Snowe: On behalf of the National
Venture Capital Association (NVCA) and its members, I am
writing in support of Senate passage of S. 493, the SBIR/STTR
Reauthorization Act of 2011, which reauthorizes the Small
Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) programs. This legislation
represents a fair compromise to ensure that America's most
innovative small businesses can once again have access to
existing government incentives to grow jobs by
commercializing new discoveries.
In particular, NVCA supports the bill's provisions allowing
greater access to SBIR funds for majority owned venture-
backed small businesses and fixing the affiliation rules to
ensure these companies will be able to once again participate
in the program. Many small businesses that are developing
truly disruptive innovations rely on venture capital
investment to help bring breakthrough products to market and
grow U.S. jobs. The legislation will correct a regulatory
interpretation made by SBA in 2003 which revoked the
eligibility of many venture-backed companies from
participating in the program. This compromise will help to
ensure that small U.S. venture-backed companies have
increased access to capital for meritorious cutting-edge
early-stage research.
At a time when our country needs to build new businesses,
the venture capital industry believes that the best use of
government dollars is to leverage public/private partnerships
and we are committed to working with the government to bring
a steady stream of innovation and economic value to market.
S. 493 is a positive step forward to allow venture-backed
companies to have a fair chance to thrive under the SBIR
program alongside non-venture-backed counterparts. Doing so
will only strengthen the future success of the program.
For these reasons, I hope the Senate will move quickly and
pass S. 493, the SBIR/STTR Reauthorization Act of 2011, and
work with the House on an appropriate compromise prior to the
May 31, 2011 reauthorization deadline.
Sincerely,
Mark G. Heesen,
President.
____

Small Business

Technology Council,

March 7, 2011.
Hon. Mary Landrieu,
U.S. Senate, Dirksen Senate Office Building, Washington, DC.
Dear Senator Landrieu: As the nation's largest tech-
oriented small business organization representing diverse
industries, the Small Business Technology Council (SBTC)
would like to express its support on behalf of its members
for S. 493, ``The SBIR/STTR Reauthorization Act of 2011''.
This bipartisan legislation is the result of years of
negotiations and compromise between both parties and the many
organizations that have a stake in this program. It is thanks
to the hard work and leadership of yourself and Ranking
Member Snowe that an agreement between those stakeholders was
finally reached.
The Small Business Innovation Research (SBIR) Program is
one of the most successful innovation programs in the
country, providing technology-oriented small businesses with
seed-stage R&D funding that they otherwise would not have
access to. It has been praised by multiple studies from the
National Academies of Science, and has inspired similar
programs in foreign countries such as the UK, Japan, South
Korea, and the Netherlands. Not only does this program spur
technological innovation and entrepreneurship, it helps
create high-tech jobs, and does so without increasing Federal
spending.
This program is currently under its 10th continuing
resolution, and is set to expire on May 31, 2011. While most
agree this is a good program that deserves to be
reauthorized, disputes over what should be in the
reauthorization legislation and proposed changes to the
program have held it up until now. Those disputes have
finally been resolved, and the current legislation is
supported by all stakeholders. It has been over two years
since the last reauthorization period ended, and after years
of uncertainty and short-term continuing resolutions, the
SBTC asks all Senators to support S. 493, and urges the swift
passage of this important legislation.
Sincerely,
Jere W. Glover,
Executive Director.
____

Biotechnology

Industry Organization,

Washington, DC, March 7, 2011.
Hon. Mary Landrieu,
Chair, U.S. Senate Committee on Small Business and
Entrepreneurship, Russell Senate Office Building,
Washington, DC.
Hon. Olympia Snowe,
Ranking Member, U.S. Senate Committee on Small Business and
Entrepreneurship, Russell Senate Office Building,
Washington, DC.
Dear Chair Landrieu and Ranking Member Snowe: On behalf of
the Biotechnology Industry Organization (BIO) and our more
than 1,100 biotechnology companies, academic institutions,
state biotechnology centers and related organizations, I am
writing in support of S. 493, legislation to reauthorize the
Small Business Innovation Research (SBIR) and Small Business
Technology Transfer Program (STTR) programs. This bill
represents a balanced approach to ensure that America's most
innovative small businesses can access existing incentives to
grow jobs by commercializing new discoveries. As such, I
commend you for your introduction of S. 493 and I urge the
committee to favorably report the legislation to the full
Senate for prompt consideration.
In particular, I am writing in support of the bill's
provisions allowing greater access to SBIR funds for small
businesses reliant upon venture capital financing. Small
biotechnology, medical device and other life sciences firms
increasingly rely on venture capital investments to fund
research and development. The legislation will correct a
regulatory interpretation made by SBA in 2003 which revoked
the eligibility of many venture capital-reliant small
companies from participating in the SBIR and STTR programs
over the last several years. This provision will ensure that
many of America's most innovative small businesses are not
excluded simply because of how they raise capital and can
once again compete in the SBIR and STTR programs based on
scientific merit. The legislation will help to ensure that
small, U.S. biotech companies have increased access to
capital for meritorious cutting-edge, early-stage research.
Small biotechnology companies face the constant challenge
of raising sufficient capital to fund biomedical research.
This funding shortage is most acute for research projects at
the earliest stages, exactly the point at which SBIR funds
can be most productive in fostering science and innovation.
By filling this market gap, SBIR funds have helped small
biotechnology companies continue lines of medical research
that might otherwise go unfunded. The legislation will
increase access to critical, early-stage sources of funding
for small businesses, including small biotechnology firms,
thus facilitating economic growth, job creation, new
breakthrough therapies for patients in need, and American
economic competitiveness in the global economy. This is
exactly the intent of the SBIR program, as created in 1982.
S. 493 represents a compromise to ensure that America's
small businesses remain at the forefront of global
innovation. While the legislation does not give any single
interested party in the debate over reauthorization all that
it might want, the legislation creates a framework that will
help move the process forward and will hopefully ensure that
SBIR reauthorization is enacted into law this year. The bill
recognizes that the Small Business Innovation Research (SBIR)
Program--last reauthorized in 2000--plays an important role
in the development of new breakthrough therapies to improve
human health, and must be updated to reflect the new
realities facing America's small businesses in the 21st
Century.
For these reasons, I urge the committee to favorably
discharge S. 493 so that it can be passed promptly by the
Senate.
Sincerely,
James C. Greenwood,
President and CEO.
____

Where Do Innovations Come From? Transformations in the U.S. National
Innovation System, 1970-2006

(By Fred Block and Matthew R. Keller)

How should the United States craft policies that
effectively spur technological innovation? With increasing
competitive challenges from other nations, particularly in
technology and innovation-based sectors

[[Page S1637]]

once thought to be largely immune from foreign competition,
there is increasing interest in crafting policies to help
spur innovation. But if innovation policies are to be
effective, it's critical that they be based on an accurate
understanding of the U.S. innovation system--in particular,
an understanding of where U.S. innovations come from. This
report does this by analyzing the sources of award-winning
innovations over the past few decades. It finds that the
sources of these innovations have changed in two key ways.
First, large firms acting on their own account for a much
smaller share of award-winning innovations, while innovations
stemming from collaborations with spin-offs from universities
and federal laboratories make up a much larger share. Second,
the number of innovations that are federally-funded has
increased dramatically. These findings suggest that the U.S.
innovation system has become much more collaborative in
nature. Federal innovation policy needs to reflect this fact.

Analysis of Data on Funding of Innovations

The growing weight of public institutions as the source of
U.S. innovations that win R&D 100 Awards and the growing role
of interorganizational collaboration in U.S. innovations are
suggestive that public fund- ing has become steadily more
important to the U.S. innovation process in recent years.
Nevertheless, it is necessary to probe a bit further, because
the U.S. firms coded as ``private'' are sometimes recipients
of federal funding--sometimes for the precise R&D activity
that wins the award.
Back in the 1970s, for example, some of the laboratories of
the Fortune 500 firms that were frequent R&D 100 Award
winners received substantial amounts of direct federal
funding. And in the more recent period, there has been a
proliferation of programs through which government agencies
support private sector R&D. An example of the latter is the
growing importance of Small Business Innovation Research
(SBIR) firms among the award winners.
The SBIR program, established in the 1980s, is one of the
most important mechanisms through which the federal
government supports smaller innovative firms, including the
firms that we have labeled as supported spinoffs. The SBIR
program is a set-aside program; all government agencies that
finance a large amount of R&D must set aside 2.5 percent of
their R&D budgets for projects that originate with small
businesses. The program awards up to $750,000 in no strings
support for projects in Phase I and up to $1.5 million for
Phase II projects that have shown significant progress in
meeting the initial objectives. Some of the SBIR firms have
now been in existence for 20 or more years, and at least one
has grown to become a Fortune 500 firm.
Figure 6 shows the total number of past and present SBIR
winners among winners of R&D 100 Awards.
The results show that these SBIR-nurtured firms
consistently account for a quarter of all U.S. R&D 100 Award
winners--a powerful indication that the SBIR program has
become a key force in the innovation economy of the United
States.
Figure 7 shows a more comprehensive measure of the role of
federal financing of R&D 100 Award winners in the United
States in 1975 and in 2006. The bottom part of the bar graph
for each year shows the number of award-winning innovations
from public sector entities in the United States that rely
heavily on federal funding. As indicated earlier, the number
of award-winning innovations from public sector entities
increased dramatically from 14 in 1975 to 61 in 2006.
The top part of the bar graph for each year in Figure 7
shows the number of Fortune 500 and ``other'' U.S. firms that
received at least 1 percent of their revenues from the
federal government. The 1 percent screen picks up both large
defense contractors and firms that have received substantial
federal grants to support their R&D efforts. In 1975, 23
innovations that won R&D 100 Awards were developed by private
firms in the United States that received at least 1 percent
of their revenues from federal support. Prominent among these
firms was General Electric, which developed nine of the
award-winning innovations that year.
There is evidence that in 2006. the federal government
directly funded three of the five private collaborations in
the United States that produced innovations that received R&D
100 Awards. Of the 20 ``other firms'' that won awards in
2006, 13 had federal support above the 1 percent threshold
and we were able to link the federal money directly to the
specific innovation that received the award. Hence, 16 of
these ``private'' innovations count as federally funded. The
overall result in Figure 7 is that the number of federally
funded innovations rises from 41 in 1975 to 77 in 2066.
In 2006, only 11 of the U.S. entities that produced award-
winning innovations were not beneficiaries of federal
funding. And even among this group of 11, there were some
ambiguous cases. Dow Automotive won an R&D 100 Award for its
work in developing an adhesive used with composite auto parts
that was installed in Volkswagen cars. But a few years
earlier, Dow had been a beneficiary of a substantial grant
from the Advanced Technology Program in the Department of
Commerce that was designed to accelerate the use of
composites in automobiles. Two other winning firms--Brion
Tech and MMR Technologies--were recent spinoffs from Stanford
University, but since the firms had not received federal
support, they were not coded as ``supported spinoff'';
however, it is likely that the professors behind the
companies received federal research grants while at Stanford.
Finally, we were unable to ascertain whether any of those
remaining firms received research support from federal
laboratories.
In short, Figure 7 probably understates the magnitude of
the expansion in federal funding for innovations in the
United States that R&D 100 Awards between 1975 and 2006.
After all, in 1975, we counted innovations as federally
funded even if support was not going to the specific unit of
the firm that was working on a particular innovation. For
2006, however, a demonstration of federal support required
showing that the federal funds were going to the same unit
that was responsible for the particular technology that won
the award.
The fundamental point is that even in the period that
Fortune 500 corporations dominated the U.S. innovation
process, they drew heavily on federal funding support. If one
is looking for a golden age in which the private sector did
most of the innovating on its own with federal help, one has
to go back to the era before World War II. Nevertheless, over
the last 40 years, the R&D 100 Awards indicate a dramatic
increase in the federal government's centrality to the
innovation economy in the United States. In the earlier
period, U.S. technology policies were almost entirely
monopolized by the military and space programs. More
recently, a wide range of federal agencies that are not part
of the Department of Defense are involved in supporting
private sector R&D initiatives. Key agencies now include the
Department of Commerce, Department of Energy, National
Institutes of Health, Department of Agriculture, National
Science Foundation, and Department of Homeland Security. In
addition, over the last 20 years, state governments have
become much more involved in technology policy, with many, if
not all states funding technology-based economic development
activities. To the extent that state programs help small
firms or university and federal lab innovations, their
role would not be picked up in this analysis.

DISCUSSION

Back in 1887, Thomas Edison built an invention factory that
has long been seen as the inspiration for the rise of the
corporate research labs established by large U.S. firms
during the 20th century. Our analysis suggests that although
large corporations in the United States emulated Edison's
model for decades, this pattern became much weaker after the
corporate reorganizations of the 1970s and 1980s. Thus, the
``era of Edison'' did not last the full century.
It is not clear why the relative role of Fortune 500
companies in the U.S. innovation system has declined. We can
hypothesize three factors. First, it seems likely that big
corporations facing relentless pressures from the financial
markets have been forced to cut back on expenditures that do
not immediately strengthen the bottom line. In some cases,
corporate cutbacks have meant eliminating laboratories
altogether; in other cases, such cutbacks have meant reducing
expenditures on early stage technology development that is
often both expensive and risky and is more likely to lead to
the kind of radical breakthroughs that win awards like the
ones analyzed here
A second factor that may be involved in the decline in
Fortune 500 companies in the U.S. innovation system is that
several factors, including the rise of computers and the
Internet, have made it much easier for small firms to enter
markets previously dominated by large firms. Many
technologies today require less capital-intensive production
processes (e.g., software), making it possible for small
firms to innovate the technologies for which they received
R&D 100 Awards. In other industries (e.g.,
biopharmaceuticals), small, innovative companies can contract
out manufacturing (e.g., of new drugs). Because small and
mid-sized firms can now better compete in product markets,
they have dramatically increased their R&D investments. In
fact, while the ratio of R&D investments to U.S. gross
domestic product more than doubled between 1980 and 2000,
almost all of that increase was due to increased R&D
investments by small and mid-sized firms with fewer than
5,000 employees. Moreover, large firm R&D may now be more
focused on improving existing product lines, as opposed to
generating radically new innovations.
The third factor that may have contributed to the decline
of Fortune 500 companies dynamic is a change in the
employment preferences of scientists and engineers. As the
employment landscape has shifted, it seems quite possible
that many talented scientists and engineers have voted with
their feet and have left work in corporate labs in favor of
work at government labs, university labs, or smaller firms.
More research is necessary to tease out the causes.
But returning to the history of the Edison lab suggests a
longer term and more structural explanation for the recent
shifts in the U.S. innovation system that we have uncovered.
Revisionist scholars have discovered that Edison's laboratory
actually operated differently from the corporate labs of the
20th century. It is true that Edison assembled a team of
scientists and engineers that had built up considerable
expertise in working with electrical devices--but Edison's
team divided its time between internal

[[Page S1638]]

projects and external projects. The Edison laboratory did
extensive contract work for other firms, helping them develop
solutions to particular problems that their industry faced.
Edison's employees worked closely with employees with
technical knowledge from those other firms.
The argument by revisionist historians is that the
extraordinary productivity of the Edison labs was a result of
the systematic interaction between Edison's team and other
groups of experts with very specific types of knowledge. When
U.S. corporations sought to emulate Edison's model in the
20th century, though, they built elaborate laboratories that
tended to cut their in-house technologists off from these
systematic encounters with experts in other organizations.
This choice fit with the model of the corporation that was
exemplified by Henry Ford's decision to produce his own steel
at the River Rouge plant. The idea was that bringing these
activities, including R&D, fully in-house maximized
management's ability to deploy the organization's resources.
What we have found in the United States at the end of the
20th century, though, is basically a return to Edison's
model--with successful research organizations; public. or
private, developing a highly productive mix of internal and
external projects. There appear to be an increasing number of
private sector research laboratories that combine their own
internal projects--often funded with federal money--with
contracted research for other firms. Some of their
innovations show up as a winners of R&D 100 Awards.

CONCLUSION

These findings suggest that the U.S. federal government's
role in fostering innovation--both in terms of
organizational, auspices and funding--across the U.S. economy
has significantly expanded in the last several decades. But
the federal government's role is not to act as the agent of
centrally planned technological change.
In Chalmers Johnson's classic account of the Japanese model
of industrial policy, he shows how government officials,
working at the Ministry of Trade and Industry, operated as
both coordinators and financiers for the conquest by Japanese
firms of new markets. Japanese government officials were
implementing a shared plan that linked investments in
particular technologies with specific business strategies to
win in particular markets--both domestically and
internationally. That strategy may have allowed Japan to
catch up the leading nations in an array of industries, but
it did not and does not fit the new innovation environment
where cutting-edge innovation produced in a new collaborative
and dispersed models is the key to success. It is for that
reason that many other nations have shifted their innovation
policies to be less directed.
In the United States, there is no central plan for
innovation, and different federal agencies engage in support
for new technologies often in direct competition with other
agencies. The federal government had created a decentralized
network of publicly funded laboratores where technologists
will have incentives to work with private firms and find ways
to turn their disoveries into commercial products. Moreover,
an alphabet soup of different federal programs provides
agencies with opportunities to help fund some of these more
compelling technological possibilities, just as there has
been increasing support, at both the federal and state
levels, for industry-university research collaboration.
Complementing these decentralized efforts are, more
targeted federal government programs that are designed to
accelerate progress across specific technological barriers.
Today, for example, the. Advanced Research Projects Agency in
the Department of Defense is prioritizing support for
computer scientists to find ways to overcome the obstacles to
creating.ever more powerful microchips for computers. It is
also helping biological scientists find ways to accelerate
the production of large batches of vaccine, which would be
useful to protect the population both against biological
weapons and a global pandemic of a deadly influenza. For
these targeted efforts, officials in these government offices
decide to renew grant support to one research group because
it has made progress, withhold it from another research group
that appears to be heading towards a dead end, and encourage
connections with still another research group--working on a
seemingly unrelated problem--because they suspect that the-
third group's, findings might have relevance for solving the
targeted problem.
Both types of U.S. government innovation initiatives--
decentralized and targeted--are increasingly described with
the language of venture capital. Private sector venture
capitalists, such as the famous firms in Silicon Valley, have
an open door policy for scientists and engineers who have a
bright idea for a new business. Of every hundred pitches they
hear, they might decide to invest in 20 with the idea that if
even one or two of the 20 are successful, then they make vast
amounts of money that they can recycle into new rounds of
initial investments. But the key assumption behind venture
capital is that even after careful screening, most of these
new business ventures will fail. Some won't be able.to
develop the promised technology, some won't find a market for
their particular innovation, and some won't be able to build
an organization capable of exploiting the Market.
Nevertheless, the enormous gains from the small percentage of
winners are more than enough to cover the bases from the
others.
Many U.S. government officials, now use the same rhetoric.
They know that most new startups begun by scientists and
engineers at universities or government laboratories will
fail, but the minority that succeed will create jobs and
advance new technologies. With the decentralized approach,
they may provide support to several hundred firms with the
idea that 20 to 50 might actually flourish. With the more
targeted efforts, they realize that in each funding cycle,
only a minority of the researchers will make any significant
headway on the key problems. But the idea is that over time,
a few incremental advances will eventually set the stage for
the big breakthrough that they are looking for.
The largest federal government program that fits this
venture capital model is the Small Business Innovation
Research (SBIR) program. In 2004, the SBIR program gave out
more than $2 billion for some 6,300 separate research
projects. The success of programs such as SBIR helps to
explain what is perhaps the most surprising turn in federal
innovation policy of the last decade.
Starting with the Central Intelligence Agency (CIA) in
1999, a number of government agencies have now set up their
own venture capital operations. The CIA's venture capital
arm, In-Q-Tel, maintains its own Website and lists 90 recent
startup firms in which it has invested. Congress provided a
$500 million initial fund, and just as with private sector
venture capital, the idea is that the initial fund will be
replenished and expanded as In-Q-Tel sells its stake in those
firms that have been successful. The Department of the Army
has followed the CIA model, and the Department of Energy has
partnered with Battelle--the large nonprofit organization
that manages several of the department's labs--which has now
created its own not-for-profit venture capital arm with an
emphasis on supporting startup firms that originated in the
laboratories.
Although this explicit turn towards venture capital by U.S.
government agencies is understandable, it will not, by
itself, solve what we see as the main weaknesses in the
current system of federal support for innovation in the
United States. In our view, the system of federal support for
innovation has enormous strengths, but it also suffers from
three major, interconnected weaknesses. First, the system
carries decentralization to an unproductive extreme. Under
current arrangements, it is entirely possible that five
different government agencies might be supporting 30
different teams of technologists working on an identical
problem without a full awareness of the duplication of
efforts. This situation is a particular problem if different
groups are unable to learn from each other in a timely
fashion. Second, because the importance of the federal role
in fostering innovation is not widely recognized, federal
programs in support of innovation lack the broad public
support that would be commensurate with their economic
importance. Third, the budgetary support for the current
system is inadequate and uncertain. Funding for more
collaborative research and commercialization efforts are
relatively limited, and total federal levels of R&D spending
have been declining in real terms since 2003. These declines
put the entire U.S. innovation system at risk.
This analysis has shown a dramatic shift in the locus of
innovation in the U.S. economy that has occurred over the
last three decades. We hope these findings spur a broad
debate about the changing role of the federal government in
our national innovation system.

Ms. SNOWE. Mr. President, the Biotechnology Industry Organization
noted:

[t]his bill represents a balanced approach to ensure that
America's most innovative small businesses can access
existing incentives to grow jobs by commercializing new
discoveries.

The U.S. Chamber of Commerce said:

[t]his landmark compromise bill, if passed into law, would
unlock the door for entry for businesses that acquire equity
funding through venture capital firms without diminishing the
programs effectiveness for traditional small businesses, thus
setting the stage for a robust and revitalized SBIR program.

That is really our goal--a modern program that recognizes the reality
of today's innovative small businesses and provides the appropriate
environment in which they can flourish.
Given the nature of the compromise we have reached--from increasing
allocations over a number of years to allowing limited participation by
majority-owned venture capital firms--we must allow time for these
provisions to take shape and enhance these programs. That is why our
legislation reauthorizes these measures for 8 years, through 2019.
Indeed, the past two reauthorizations of the SBIR program have been for
8 years each--in 1992 and 2000--as was the last reauthorization for the
STTR program in 2001.
This long-term reauthorization will allow more small businesses to
access this funding without the fear of constant interruptions based on
whims of

[[Page S1639]]

whether Congress will extend these programs for an indefinite period of
time. Indeed, a company's life cycle in either of these programs is by
nature a multiyear process--a phase I award will last 6 months, while a
phase II award will last for 2 years. That timeframe does not include
the time it takes for businesses to apply for funding and await a
decision, as well as the time between three phases waiting for new
solicitations from agencies.
It will also allow the Government Accountability Office to
effectively study the venture capital compromise over time to see if it
is serving its intended purpose of allowing promising small businesses
to utilize these resources. We include a provision in the bill
mandating that the GAO issue a report on the subject 3 years after
enactment and every 3 years thereafter. By reducing the length of the
reauthorization, we would be allowing this delicate compromise to be
relitigated immediately without the benefit of studying its impact, and
we would effectively negate any modicum of certainty provided in the
pending legislation.
Finally, on the matter of procedure, I am very pleased the majority
leader has indicated he will be allowing an open amendment process to
this legislation. That is also important as well as necessary for
working through these issues and others that are critical to our
consideration.
Mr. President, I thank you for the consideration, but I most
especially thank the chair of the Small Business Committee for
providing the kind of leadership that has been so essential to bringing
this legislation forward. After 10 reauthorizations and for about 6
years in the process, to bring it to this point will be critical for
the innovation that is so essential to creating new products and to
also creating new jobs we desperately need in our economy.
Ms. LANDRIEU. Mr. President, I thank Senator Snowe. I could not have
a better partner on this committee. Her expertise is noted and admired
among the Members. She has served as a member of this committee--
oftentimes its chair--for many years. I appreciate her help and the
help of her staff as well.
In the 10 minutes we have left, I wish to add a couple of specifics
of the compromise Senator Snowe has outlined.
It is true that this program has been sputtering along on very
uncertain terrain because of every 3-month or 6-month reauthorization
hastily put forward because there has been no agreement on a few of the
details. We finally reached an agreement on some of those details, the
largest of which had to do with the percentage of awards that could be
given or funded to companies that are owned by venture capitalists.
This program was started as a small business program. Senator Snowe
and I feel very strongly and the same to try to keep it as a small
business entrepreneurial program but to obviously recognize the changes
and opportunities for capital presented by some venture capitalists.
That has been the subject of the largest piece of negotiation. I am
happy to say we have letters of support from the Bay Area Innovation
Alliance, the BioDistrict from New Orleans, just to name one, the
Biotechnology Council. They are all very supportive of this compromise.
Mr. President, I ask unanimous consent to have printed in the Record
these letters of support.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Hon. Mary L. Landrieu,
Committee on Small Business & Entrepreneurship, U.S. Senate,
Washington, DC.
Subject: Senate Bill S. 493
Dear Senator Landrieu: The Bay Area Innovation Alliance,
representing more than 60 technology companies in the San
Francisco Bay Area who participate extensively in the SBIR/
STTR programs, is pleased to support compromise legislation
for SBIR reauthorization.
We urge a timely passage of Senate Bill S. 493.
Sincerely,
Christopher White.
Bay Area Innovation Alliance,
____

Biodistrict New Orleans,

New Orleans, LA, March 9, 2011.
Hon. Mary Landrieu,
Chair, Senate Committee on Small Business and
Entrepreneurship, U.S. Senate, Washington, DC.
Dear Chairwoman Landrieu: BioDistrict New Orleans is
pleased to support your compromise Small Business Innovation
Research (SBIR) and Small Business Technology Transfer (STTR)
programs reauthorization legislation. Rebuilding the New
Orleans economy around the biotech, digital media and other
knowledge-based industries is our #1 priority.
As you know, SBIR is the nation's largest source of early-
stage research and development funding. Providing more than
50,000+ patents since its inception, SBIR has successfully
harnessed the proven innovative power of small, technology-
based businesses to meet the nation's technology needs, and
New Orleans needs to become a center of such activity.
Unfortunately, the reauthorization of this demonstrably
effective program has been beset by various tribulations,
court interpretations and special interests. This has lead to
nine short-term reauthorizations since 2008. These repeated,
temporary extensions have wreaked havoc on agencies' ability
to make strategic decisions in regard to the programs. The
uncertain future of the program has also deterred potential
participants and investors.
Thankfully, S.B. 493 allows for increased venture-capital
participation but retains the small-business integrity of the
program. This bill has been endorsed by the Biotechnology
Industry Organization and the Small Business Technology
Council, the nation's largest tech-oriented small business
organization from diverse industries.
The BioDistrict also fully supports this legislation and
urges its swift adoption. We wish to thank you for your
unflagging and indispensable efforts to protect the small-
business focus of the SBIR and STTR programs and achieve this
balanced and fair compromise reauthorization package.
Sincerely,
Bonita A. Robertson,
Special Counsel.
____

National Small Business

Association,

Washington, DC, March 7, 2011.
Hon. Mary Landrieu,
U.S. Senate,
Washington, DC.
Hon. Olympia Snowe,
U.S. Senate,
Washington, DC.
Dear Chairwoman Landrieu and Ranking Member Snowe: The
National Small Business Association is pleased to support the
SBIR/STTR Reauthorization Act of 2011 (S. 493). Reaching
150,000 small-business owners across the nation, NSBA is the
country's oldest small-business advocacy organization and a
longtime supporter of the Small Business Innovation Research,
SBIR, program.
As you both know, the SBIR program is the nation's largest
source of early-stage research and development funding.
Providing more than 50,000 patents since its inception, SBIR
has successfully harnessed the proven innovative power of
small, technology-based businesses to meet the nation's
technology needs. On average, SBIR generates seven new
patents per day--which is far more than all U.S. universities
combined, at less than one-twelfth their level of federal
research and development funding.
Unfortunately, the reauthorization of this demonstrably-
effective program has been beset by various tribulations.
This has led to ten short-term reauthorizations since 2008.
These repeated, temporary extensions have wreaked havoc on
agencies' ability to make strategic decisions in regard to
the programs. The uncertain future of the program also has
deterred potential participants and investors.
Thankfully, a compromise reauthorization package--which
allows for increased venture-capital participation but
retains the small-business integrity of the program--has been
forged. This compromise has been endorsed by the
Biotechnology Industry Organization, the National Venture
Capital Association, and the Small Business Technology
Council, the nation's largest tech-oriented small business
organization from diverse industries.
NSBA also fully supports S. 493 and urges its swift
adoption. NSBA thanks you both for your unflagging and
indispensable efforts to protect the small-business focus of
the SBIR and STTR programs and achieve this balanced and fair
compromise reauthorization package.
Sincerely,
Todd O. McCracken,
President.
____

Smaller Business Association

of New England,

Waltham, MA, March 8, 2011.
U.S. Senator Mary Landrieu,
Chairman, Senate Small Business & Entrepreneurship, Russell
Building, Washington, DC.
Dear Senator Landrieu: The Smaller Business Association of
New England fully supports S. 493, which reauthorizes the
Small Business Research Innovation program for the next eight
years. Life sciences, defense, high technology and the energy
sectors in Massachusetts have been tremendous beneficiaries
of the SBIR/STTR programs averaging almost one quarter of a
billion dollars per year. This research and development
engine has spawned new revolutionary products that have been
utilized in an innovative way by the military and commercial
markets.
The proposed incremental increases in the SBIR/STTR
formulas will only enhance the technology readiness of the
program and will provide incentives for further innovation.
We think your compromise on the sticky venture capital
issue is an equitable one,

[[Page S1640]]

particularly if it is inextricably linked to the increase in
the SBIR formula from 2.5 percent to 3.5 percent. Secondly,
the increased-size limits on Phase I and Phase II and
allowance of sequential phasing from I to II appears to be
reasonable and permits program flexibility for both the
agency and recipient.
In summary, we think you and your staff have crafted an
excellent compromise in order to satisfy divergent interests
and most importantly, preserve the integrity of the SBIR/STTR
programs. Please let us know if there is anything else SBANE
can do to facilitate Senate 493. Thank you very much.
Sincerely,
Robert A. Baker,
President.
____

V-LABS, Inc.

Covington, LA, March 8, 2011.
Senator Mary Landrieu,
U.S. Senate Building,
Washington, DC.
Dear Senator Landrieu: I am writing to give my support for
SBIR/STTR Reauthorization Bill (S. 493). I am also a
supporter of Senator Landrieu as a Louisiana resident. She
has worked tirelessly for the business community in
Louisiana. I have a small high tech company in Covington LA
and have received several SBIR grants that enabled us to do
research that we could not have afforded. I have worked many
years in support of the development of biotechnology in
Louisiana.
I am Councilor of the Division of Small Chemical
Businesses, SCHB, of the American Chemical Society. The SBIR/
STTR program is very important to our members. We offer
symposia to our membership at national and regional meeting
to share the opportunities of the SBIR/STTR program. The
Division supports reauthorization of the SBIR/STTR program.
I have campaigned for support of the program by the
American Chemical Society, ACS, for a number of years. The
American Chemical Society has 163,000 members; it is the
largest scientific society in the world. The support of the
program was announced by the ACS Board of Directors in
December, 2010 in a position statement, ``A Competitive U.S.
Business Climate: The Role of Chemistry'', on creating new
U.S. based science jobs. The complete publication is on the
ACS webpage under policy,
www.acs.org/policy
The last
paragraph of this statement reads: ``Recommendations: Small
Business and Entrepreneurship--ACS supports policies that
foster the growth of small research and development
businesses and encourage entrepreneurship: Expanding funding
for the Small Business Innovation Research (SBIR), Small
Business Technology Transfer (STTR), and Small Business
Investment Companies (SBIC) programs and reforming these
programs to make direct research funding for small businesses
more easily available Providing incentives for larger
companies to expand investments in start-up research and
development businesses''
I thank you for your work as well as the Committee on Small
Business in introducing this bill S. 493 for the
Reauthorization of the SBIR/STTR program.
Yours truly,
Sharon V. Vercellotti,
President.

Ms. LANDRIEU. Mr. President, CONNECT, which is out of the University
of California, is another important player in this particular field,
and Dawnbreaker, a commercialization company. They were part of helping
us forge this important compromise.
I also note that the guidelines of the awards have been raised in the
first stage from $100,000 to $150,000 and from $750,000 to $1 million
for phase II and allows for sequential phase II awards--another
important change.
I particularly thank Senator Coburn for agreeing to an 8-year
extension. We think, for a program such as this which is dealing with
technologies that sometimes take years to develop, that can be very
promising, but it takes some planning, it takes patience. This is not a
program that lends itself readily to 2- to 4-year reauthorizations.
That is too much uncertainty for a program such as this. Maybe other
programs in the Federal Government should go through 4-year and 5-year
authorizations. Both Senator Snowe and I pressed for a longer time.
Senator Coburn is somewhat reluctant, but we are very grateful that he
and others stepped up and said 8 years would be a good compromise in
that way. We are grateful. This will be a very important authorization
because it will set the direction for the next 8 years for our Federal
agencies.
We have also made an important change--and I am very pleased about
this because I think you can have the greatest programs in the world,
but if you are not focused on quality, if you are not focused on
exchanging best practices, if you are not focused on good management of
those programs, even some of the best intentions fall apart or the
taxpayers' money is wasted. We do not want to see that happen here. So
we have set aside a small portion for administration, which was
recommended by this study of oversight, so that the managers in each of
these departments can be better trained to actually identify promising
technologies, make sure they are requesting in the right areas the
kinds of technologies they are looking for, and receive that
information in a more professional way. That is an important component
of this compromise--the 3-percent allocation for administration and
oversight.
As I said, it reauthorizes it for 8 years, and the arrangement
between venture capital and small businesses--that kind of capsulizes
the major changes.
I do wish to recognize Senator Rockefeller's amendment that he put on
in the 111th Congress which is a policy directive against waste, fraud,
and abuse. Senator Rockefeller has been very helpful in this regard.
His amendment, along with others, requires inspectors general in
participating Federal agencies to establish fraud-detection measures,
coordinate fraud information sharing between agencies, and provide
fraud prevention related to education and training of the
administration.
In addition to all of this, it actually gets even better because
Senator Snowe and I have figured out a way to reduce the cost from the
last Congress to this Congress from $229 million over 5 years to $150
million. We are being as efficient with taxpayers' dollars as we can,
strengthening administration and fraud detection, giving a longer lead
time and runway for some of these technologies.
Again, we think this is a model program in the world. We do not
think, we know that because of the research and review that has been
done of this program and from what we hear from other countries. They
wonder: How does your system work? This is one important aspect. The
government does have a role to play--not the most significant role
potentially but a portion of one of the most significant roles to play
in promoting entrepreneurship, creativity, innovations, and expanding
the number of patents that are issued in the United States by providing
programs that give an open door, access, and level playing field to the
smallest businesses in America to give them a chance to compete against
some of the big guys. That is really what this is all about.
Mr. President, let me see if the ranking member has anything else to
add. We have a few minutes left. She may have one or two points to add
as we close out before the lunch period.
Ms. SNOWE. Mr. President, I thank the chairman. The points she raised
are very critical because of the contributions these programs have made
to our economy, most especially because much of the innovation that
occurs in America comes from small businesses. In fact, this report by
the Information and Innovation Technology Foundation underscores this
point, that the innovations coming from big companies is actually on
the decline. We really do depend on the entrepreneurial spirit of small
businesses to create the kind of innovation we require in America if we
are going to be on the vanguard of change and vanguard of technologies
and which is so crucial in moving forward as a nation.
The SBIR program in particular has played a very crucial role in that
regard. I think this report truly does emphasize the degree to which it
has played a paramount role over the years since the program was
created in 1982. It certainly has had an extraordinary history in that
regard.
We talk about a lot of programs that we underwrite at the Federal
level, but I can say this is a good use of taxpayers' dollars when we
are thinking about how we maximize taxpayers' dollars within the
Federal agencies that are now utilizing these programs, of which we
have 11 different agencies that are setting aside the research and
development funds specifically to ensure that small business has an
allocation among the research and development dollars so they get their
fair share because that is from where the innovation is derived in the
final analysis. That certainly has been the indication of the many
results we have achieved due to these programs, and that is what makes
them outstanding in that regard.
You can draw a cause and effect. Certainly, there is a correlation
between

[[Page S1641]]

the effectiveness of these programs among the agencies that award them
to small businesses that then become the true laboratories for the
innovation. That transformation, as this report indicated, has been
central to the types of technologies that have emerged over the last
three decades.
We want to continue to advance these programs because they are
undeniably beneficial and well worth the investments that are made by
these agencies because of their required set-asides for these programs
and to ensure that small businesses are part of the research and
development funding that is in the billions of dollars at the Federal
level, if you look at the collective budgets of just these 11 agencies.
We want to make sure small businesses are key to our technological
growth and, therefore, having these types of programs becomes a major
force in developing our innovative economy, as this report indicated
recently.
Again, I wish to thank the Chair for her efforts in that regard.
Ms. LANDRIEU. Mr. President, I thank Ranking Member Snowe and,
according to the previous agreement, I think we are going to move to a
quorum call at this point. Within a short period of time, I think the
leadership is going to lay down two amendments and then, after lunch,
of course, we will be open to consider others. We are hoping they will
be limited to the subject matter before us, but it is an open debate on
this bill.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, I ask unanimous consent that the committee-
reported amendments be agreed to en bloc; the motions to reconsider be
considered made and laid upon the table en bloc; the amended version of
S. 493 be considered original text for the purposes of further
amendment; that Senator Nelson of Nebraska then be recognized to offer
an amendment to S. 493; that following the reporting of the Nelson
amendment, the amendment be set aside and the Republican leader be
recognized to offer a first-degree amendment to the bill; and following
the reporting of the McConnell amendment, the Republican leader be
recognized for up to 5 minutes for debate only relative to his
amendment; that following the Republican leader's remarks, the Senate
resume consideration of the Nelson amendment and Senator Nelson be
recognized for up to 10 minutes for debate only relative to his
amendment.
Mr. President, I ask unanimous consent this be modified to allow the
Republican leader to speak for whatever time he needs.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The committee-reported amendments were agreed to en bloc.)
The PRESIDING OFFICER. The Senator from Nebraska.

Amendment No. 182

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent to
call up the amendment I just sent to the desk.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:

The Senator from Nebraska [Mr. Nelson] proposes an
amendment No. 182.

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent to
dispense with further reading of the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

At the appropriate place, insert the following:
It is the sense of the Senate that it supports reducing its
budget by at least 5 percent. The Senate has made the
findings that:
Finding that, Congress must pursue comprehensive deficit
reduction,
Finding that, the nation is deeply involved in military
action on two fronts
Finding that, Admiral Mullen has noted the most significant
threat to national security is the national debt
Finding that, the nation is in fragile recovery from an
economic downturn that has spanned two administrations
Finding that, the offices and agencies that serve Members
of Congress must be reduced along with the rest of the budget
Finding that, in order to address the Nation's fiscal
crisis, the Senate should lead by example and reduce its own
legislative budget
It is the sense of the Senate, that it should lead by
example and reduce the budget of the Senate by at least 5
percent.

Amendment No. 183

The PRESIDING OFFICER. The Republican leader.
Mr. McCONNELL. Mr. President, with gas prices on the rise, Americans
want to know what Washington is going to do about it. So let me provide
a little update: The White House has responded by locking up domestic
energy supplies and pushing an energy tax that will drive gas prices up
even higher and Democrats in Congress aren't doing anything at all.
So we have a total disconnect right now between Democrats in
Washington when it comes to gas prices. Both the White House and
Democrats in Congress are acting as if they haven't seen a nightly
newscast or driven by a gas station in weeks.
Senator Inhofe, Senator Murkowski, and Senator Barrasso have done a
terrific job of raising the alarm on the administration's efforts to
lock up domestic energy, even as it continues to push costly new
regulations at the Environmental Protection Agency. I wish to commend
them for their efforts on this most important and timely issue. They
have shown how American families are getting a double whammy right now.
Refiners would pass the costs related to these regulations on to
consumers, and the White House's efforts to lock up domestic energy
production puts even more pressure on gas prices.
If you are just tuning in, let's review what the White House has been
up to on that front: They have resisted our push for American
production offshore, onshore and in Alaska and the jobs that go along
with it. They have canceled existing drilling permits and the jobs that
come with them. They have needlessly delayed offshore leases, which
even former President Clinton has referred to as ridiculous. They have
imposed a moratorium on oil and gas drilling, which amounts to a
moratorium on domestic energy-related jobs. They have proposed a tax on
domestic energy production that might be called a ``minivan tax.'' Now
they are trying to impose a backdoor national energy tax through the
EPA.
It is a strange way to respond to rising gas prices. But it is
perfectly consistent with the current Energy Secretary's previously
stated desire to get gas prices in the United States up to where they
are in Europe.
These new regulations would destroy jobs at a time when Americans
need them the most, and they would be especially devastating for States
such as Kentucky and other coal States. EPA regulations resulting in
dramatic energy price increases would jeopardize the livelihoods of the
18,000 miners in Kentucky and the additional 200,000 jobs that depend
on coal production and the low cost of electricity that Kentuckians
enjoy.
They would raise the price of everything from electricity, gasoline,
fertilizer, to the food we eat, and that is why farmers, builders,
manufacturers, small businesses, and the U.S. Chamber of Commerce
oppose them and support an effort to stop them.
But the White House is determined to get its way, and that is why
they are attempting to do through regulation what they couldn't do
through legislation regardless of whether the American people want it.
In my view, it is an insult to the millions of Americans who are
already struggling to make ends meet and to find a job.
Fourteen million Americans are looking for work, gas prices are
approaching $4 a gallon, and the Obama administration wants unelected
and unaccountable bureaucrats to impose new regulations that will
destroy even more jobs and drive gas prices even higher.
If you want proof that common sense is taking a backseat to ideology
in the White House, look no further: This plan is bad for jobs and bad
for the economy and it must be stopped. That is why, at the end of my
remarks, I will be introducing an amendment to block it.
In an effort to prevent the administration from adding yet another
burdensome, job-destroying regulation through the backdoor, we will
have a vote on whether, at a time of rising gas prices and growing
concern about the scope of government, we should allow

[[Page S1642]]

the White House to impose new energy regulations through the EPA.
This vote is needed because the White House appears ready to advance
its goal by any means possible, regardless of our economy or the will
of the people. That is why it is my hope we will vote to stop this
power grab in its tracks.
I wish to, in particular, give credit to Senator Inhofe. This is
legislation he has introduced and has been promoting. It is exactly the
same legislation that is moving over in the House of Representatives,
and it is time the Senate took a stand on this measure as well.
Mr. President, I believe there is an amendment pending.
The PRESIDING OFFICER. There is.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the
pending amendment be temporarily set aside, and I send an amendment to
the desk.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:

The Senator from Kentucky [Mr. McConnell] proposes an
amendment No. 183.

Mr. McCONNELL. Mr. President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To prohibit the Administrator of the Environmental Protection
Agency from promulgating any regulation concerning, taking action
relating to, or taking into consideration the emission of a greenhouse
gas to address climate change)

At the end, add the following:

TITLE VI--ENERGY TAX PREVENTION

SEC. 601. SHORT TITLE.

This title may be cited as the ``Energy Tax Prevention Act
of 2011''.

SEC. 602. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

(a) In General.--Title III of the Clean Air Act (42 U.S.C.
7601 et seq.) is amended by adding at the end the following:

``SEC. 330. NO REGULATION OF EMISSIONS OF GREENHOUSE GASES.

``(a) Definition.--In this section, the term `greenhouse
gas' means any of the following:
``(1) Water vapor.
``(2) Carbon dioxide.
``(3) Methane.
``(4) Nitrous oxide.
``(5) Sulfur hexafluoride.
``(6) Hydrofluorocarbons.
``(7) Perfluorocarbons.
``(8) Any other substance subject to, or proposed to be
subject to, regulation, action, or consideration under this
Act to address climate change.
``(b) Limitation on Agency Action.--
``(1) Limitation.--
``(A) In general.--The Administrator may not, under this
Act, promulgate any regulation concerning, take action
relating to, or take into consideration the emission of a
greenhouse gas to address climate change.
``(B) Air pollutant definition.--The definition of the term
`air pollutant' in section 302(g) does not include a
greenhouse gas. Nothwithstanding the previous sentence, such
definition may include a greenhouse gas for purposes of
addressing concerns other than climate change.
``(2) Exceptions.--Paragraph (1) does not prohibit the
following:
``(A) Notwithstanding paragraph (4)(B), implementation and
enforcement of the rule entitled `Light-Duty Vehicle
Greenhouse Gas Emission Standards and Corporate Average Fuel
Economy Standards' (75 Fed. Reg. 25324 (May 7, 2010) and
without further revision) and finalization, implementation,
enforcement, and revision of the proposed rule entitled
`Greenhouse Gas Emissions Standards and Fuel Efficiency
Standards for Medium- and Heavy-Duty Engines and Vehicles'
published at 75 Fed. Reg. 74152 (November 30, 2010).
``(B) Implementation and enforcement of section 211(o).
``(C) Statutorily authorized Federal research, development,
and demonstration programs addressing climate change.
``(D) Implementation and enforcement of title VI to the
extent such implementation or enforcement only involves one
or more class I or class II substances (as such terms are
defined in section 601).
``(E) Implementation and enforcement of section 821 (42
U.S.C. 7651k note) of Public Law 101-549 (commonly referred
to as the `Clean Air Act Amendments of 1990').
``(3) Inapplicability of provisions.--Nothing listed in
paragraph (2) shall cause a greenhouse gas to be subject to
part C of title I (relating to prevention of significant
deterioration of air quality) or considered an air pollutant
for purposes of title V (relating to air permits).
``(4) Certain prior agency actions.--The following rules,
and actions (including any supplement or revision to such
rules and actions) are repealed and shall have no legal
effect:
``(A) `Mandatory Reporting of Greenhouse Gases', published
at 74 Fed. Reg. 56260 (October 30, 2009).
``(B) `Endangerment and Cause or Contribute Findings for
Greenhouse Gases under section 202(a) of the Clean Air Act'
published at 74 Fed. Reg. 66496 (Dec. 15, 2009).
``(C) `Reconsideration of the Interpretation of Regulations
That Determine Pollutants Covered by Clean Air Act Permitting
Programs' published at 75 Fed. Reg. 17004 (April 2, 2010) and
the memorandum from Stephen L. Johnson, Environmental
Protection Agency (EPA) Administrator, to EPA Regional
Administrators, concerning `EPA's Interpretation of
Regulations that Determine Pollutants Covered by Federal
Prevention of Significant Deterioration (PSD) Permit Program'
(Dec. 18, 2008).
``(D) `Prevention of Significant Deterioration and Title V
Greenhouse Gas Tailoring Rule', published at 75 Fed. Reg.
31514 (June 3, 2010).
``(E) `Action To Ensure Authority To Issue Permits Under
the Prevention of Significant Deterioration Program to
Sources of Greenhouse Gas Emissions: Finding of Substantial
Inadequacy and SIP Call', published at 75 Fed. Reg. 77698
(December 13, 2010).
``(F) `Action to Ensure Authority to Issue Permits Under
the Prevention of Significant Deterioration Program to
Sources of Greenhouse Gas Emissions: Finding of Failure to
Submit State Implementation Plan Revisions Required for
Greenhouse Gases', published at 75 Fed. Reg. 81874 (December
29, 2010).
``(G) `Action To Ensure Authority To Issue Permits Under
the Prevention of Significant Deterioration Program to
Sources of Greenhouse Gas Emissions: Federal Implementation
Plan', published at 75 Fed. Reg. 82246 (December 30, 2010).
``(H) `Action To Ensure Authority To Implement Title V
Permitting Programs Under the Greenhouse Gas Tailoring Rule',
published at 75 Fed. Reg. 82254 (December 30, 2010).
``(I) `Determinations Concerning Need for Error Correction,
Partial Approval and Partial Disapproval, and Federal
Implementation Plan Regarding Texas Prevention of Significant
Deterioration Program', published at 75 Fed. Reg. 82430
(December 30, 2010).
``(J) `Limitation of Approval of Prevention of Significant
Deterioration Provisions Concerning Greenhouse Gas Emitting-
Sources in State Implementation Plans; Final Rule', published
at 75 Fed. Reg. 82536 (December 30, 2010).
``(K) `Determinations Concerning Need for Error Correction,
Partial Approval and Partial Disapproval, and Federal
Implementation Plan Regarding Texas Prevention of Significant
Deterioration Program; Proposed Rule', published at 75 Fed.
Reg. 82365 (December 30, 2010).
``(L) Except for action listed in paragraph (2), any other
Federal action under this Act occurring before the date of
enactment of this section that applies a stationary source
permitting requirement or an emissions standard for a
greenhouse gas to address climate change.
``(5) State action.--
``(A) No limitation.--This section does not limit or
otherwise affect the authority of a State to adopt, amend,
enforce, or repeal State laws and regulations pertaining to
the emission of a greenhouse gas.
``(B) Exception.--
``(i) Rule.--Notwithstanding subparagraph (A), any
provision described in clause (ii)--

``(I) is not federally enforceable;
``(II) is not deemed to be a part of Federal law; and
``(III) is deemed to be stricken from the plan described in
clause (ii)(I) or the program or permit described in clause
(ii)(II), as applicable.

``(ii) Provisions defined.--For purposes of clause (i), the
term `provision' means any provision that--

``(I) is contained in a State implementation plan under
section 110 and authorizes or requires a limitation on, or
imposes a permit requirement for, the emission of a
greenhouse gas to address climate change; or
``(II) is part of an operating permit program under title
V, or a permit issued pursuant to title V, and authorizes or
requires a limitation on the emission of a greenhouse gas to
address climate change.

``(C) Action by administrator.--The Administrator may not
approve or make federally enforceable any provision described
in subparagraph (B)(ii).''.

SEC. 603. PRESERVING ONE NATIONAL STANDARD FOR AUTOMOBILES.

Section 209(b) of the Clean Air Act (42 U.S.C. 7543) is
amended by adding at the end the following:
``(4) With respect to standards for emissions of greenhouse
gases (as defined in section 330) for model year 2017 or any
subsequent model year for new motor vehicles and new motor
vehicle engines--
``(A) the Administrator may not waive application of
subsection (a); and
``(B) no waiver granted prior to the date of enactment of
this paragraph may be considered to waive the application of
subsection (a).''.

The PRESIDING OFFICER. The Senator from Nebraska.

Amendment No. 182

Mr. NELSON of Nebraska. Mr. President, I rise to speak on the
amendment I have just offered dealing with cutting the Senate budget by
at least 5 percent.

[[Page S1643]]

When I go home every weekend and I am at the grocery store or I am at
a hardware store, I have people coming to me saying they are concerned
about the growing deficit, they are concerned about the increasing
debt, and they are asking what Congress can do, what can the Senate do,
specifically, to avoid having this unsustainable growth and debt and
deficit. They are concerned.
In many respects, the growth of that debt is most threatening to the
national security of this country.
Mr. INHOFE. Would the Senator from Nebraska yield for a question?
Mr. NELSON of Nebraska. Sure.
Mr. INHOFE. I ask the Senator from Nebraska--the minority leader has
just introduced an amendment that is pending right now, and I was going
to speak on that amendment. Rather than going to another one, would the
Senator yield for 3 or 4 minutes so I can at least weigh in on this
amendment?
Mr. NELSON of Nebraska. Ordinarily, I would grant that request, but I
have a speech at another location that should be starting about right
now. So I will be brief.
Mr. INHOFE. Mr. President, I ask unanimous consent that at the
conclusion of the Senator's remarks I be recognized next.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NELSON of Nebraska. The Chairman of the Joint Chiefs of Staff,
Admiral Mullen, noted that the most significant threat to our national
security is in fact the national debt.
The Nation is in a fragile state of recovery, one that we hope will
improve the unemployment situation in our country and will improve the
overall economy. But as we look at dealing with the deficit and deficit
reduction, we must in fact pursue a very important part of that
reduction ourselves here within the confines of the Senate. The offices
and agencies that serve the Members of Congress have to be reduced
along with the rest of the budget.
In order to address the Nation's fiscal crisis I think the Senate
must lead by example and reduce our own legislative budget. It is in
that context I have introduced this resolution of the Senate today, a
sense of the Senate that it should lead by example and reduce the
budget of the Senate by at least 5 percent.
This is not something new to me. Two years ago, we held the line in
the growth of the Senate budget. A year ago we cut the legislative
branch budget. We are looking forward, beyond this current budget, this
continuing resolution, and looking at 2012. I hope the legislative
branch on a bipartisan basis--as in the past, with Senator Murkowski,
now with Senator Hoeven--will be able to further reduce the legislative
branch budget as we go forward on the 2012 budget that will take effect
on October 1 of this year.
This is designed for us to set an example by cutting our own budgets,
not just asking other people to tighten their belts and go through the
process of deficit reduction through cuts, but to lead by example and
do it ourselves. Obviously there will be an opportunity to speak more
at a later time. I hope that will generate some more discussion on the
floor of the Senate.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, first I thank the Senator from Nebraska
for allowing me to come in immediately following his remarks.

Amendment No. 183

An amendment was just offered by the minority leader. Let me explain
what this is. As the former chairman of the Environment and Public
Works Committee, and now the ranking member, we have been very much
concerned for a long period of time over what they are trying to do
with cap-and-trade. All the way back to the Kyoto treaty and then
through the five different bills that were debated on the Senate floor,
we recognized the incredible cost to the American people if we were to
pass cap-and-trade legislation.
The interesting thing about this is the most votes that were in the
Senate at any one time in order to pass cap-and-trade were about 30.
Obviously it takes a lot more than that. So what this administration
did was say: All right, if you are not going to pass cap-and-trade
regulation--keep in mind what that is; that would end up being the
largest tax increase in the history of America on the American people--
if you are not going to do it through legislation, we will do it
through our regulations, through the Environmental Protection Agency.
There was an endangerment finding. The Administrator of the EPA had
the endangerment finding and it was based on the IPCC flawed science,
but nonetheless it was there. So they started on a route to regulate
CO<inf>2</inf> through regulations. Let's stop and think about what
that would be. The costs we have determined, over a period of 10-years,
to take over the regulation and have in fact a type of cap-and-trade
through regulation--or by regulation--would be about $300 billion to
$400 billion a year. I did a calculation as to what that would cost the
average family in the State of Oklahoma and it was about $3,000 for
each family who actually files a tax return.
You have to ask the question, what do you get if you pass this. First
of all, I think most people right now are concerned with the price of
gasoline at the pump. It is going up again. I suggest it is not market
forces that are forcing the price up. It is nothing less than
regulation. We have an administration that is doing all it can to kill
fossil fuels in America. This is a chart showing--and this all happened
in the last year--in the United States we have the largest recovery
reserves in oil, coal, and gas of any other country. In fact, our
research is right there. You can see recovery reserves are astronomical
compared to China, Iran, Canada, and some of the other countries.
The problem we have is a political problem. We are not allowed to go
ahead and exploit our own reserves. It is simple supply and demand. I
think there is not a person listening to us now who has not studied
supply-and-demand basics back in school. If we have all this supply
here, why can't we exploit the supply?
To give another illustration of what we have--this is coal reserves.
We have 28 percent of all the world's coal reserves. We are exploiting
right now clean coal technology, being very successful. We have, in
addition to this, oil and gas reserves. But the problem we have is a
political problem.
It was the Secretary of Energy, Steven Chu, who made the statement in
the Wall Street Journal:

[S]omehow we have to figure out how to boost the price of
gasoline in Europe.

``To boost the price of gasoline to the levels in Europe.'' Right now
the levels in Europe are around $8 a gallon. That is what the
administration wants us to pay. Why do they want that? They want that
so we will be priced out of using fossil fuels. We are talking about
oil, gas, and coal.
Right now we are faced with this. Frankly, as we speak, in this very
moment over in the House of Representatives they are taking up what
they call the Upton-Inhofe bill. That is the same amendment the
minority leader just filed. What that does is propose the content of
the Inhofe-Upton bill, which says the EPA does not have jurisdiction
over controlling CO<inf>2</inf>. That should be a legislative matter.
You say, Who would agree with that?
Max Baucus, Democrat from Montana, said:

I do not want the EPA writing those regulations. I think
it's too much power in the hands of one single agency, but
rather climate change should be a matter that's essentially
left to the Congress.

The Senator from Nebraska who just walked off the floor:

Controlling the levels of carbon emissions is the job of
Congress. We don't need the EPA looking over Congress'
shoulder telling us we're not moving fast enough.

He went on further to say:

Because the EPA regulations would be a government-directed
command-and-control regime, they would raise the price of
energy--

. . . in his State and for all the other States.
This is something I think we have talked about but there is one thing
that seems to keep getting overlooked. Somebody asked me the other day,
they said: Inhofe, what if you are wrong, in terms of how
CO<inf>2</inf>--they are talking about catastrophic global warming. I
said: It is very simple. I have a great deal of respect for the
Director of the Environmental Protection Agency. She actually said--
Lisa Jackson--in response to my question, live on TV, in our committee.
I said:

[[Page S1644]]

Let's say we pass a cap-and-trade either by regulation or
legislation. What do you think that is going to do in terms
of the overall emissions of CO<inf>2</inf>?

Her response was, well, it wouldn't really affect them because that
would only affect the United States.
I go on further and say: If we were to restrict these, and stop us
from producing oil, gas, and coal in the United States, necessarily our
power would be reduced. That would move it to China, to India, to
Mexico, to places where they do not have these regulations and do not
have restrictions on emissions. It would have the effect of actually
increasing, not decreasing, CO<inf>2</inf>. Even if we are wrong on
that we have to keep in mind it would not make any difference.
I know there are several others who want to talk about this. I am
very excited we now have this as a pending amendment, to adopt what I
refer to as the Inhofe-Upton bill. He referred to it as the Upton-
Inhofe bill. It would merely take out the jurisdiction of the EPA to
regulate CO<inf>2</inf>.
I would say also in the case of the Director, Lisa Jackson, when I
asked the question--and this was a year ago in October, I say to my
good friend from Louisiana--I said: If you are going to try to have an
endangerment finding so that would allow the EPA to regulate the same
as the cap-and-trade would, it has to be based on science. What science
would you base it on? Her response was the United Nations IPCC. What is
that? It was Climategate IPC. It happened about a year ago. It was
cooked science. I remember standing at this podium in this Senate many
times, talking about how they have tried to falsify the science to make
people believe catastrophic global warming is going to come in as a
result of CO<inf>2</inf> emissions.
I am glad this has come up. Right now we are looking at gasoline
approaching $4 a gallon. It is a supply-and-demand situation. My friend
from Louisiana has a lot of gas and oil in her State. We do in my State
of Oklahoma. We need to get the regulators, who are the politicians, to
allow us to go ahead and exploit our own resources. Eighty-three
percent right now of the Federal lands where we could be producing oil
and gas is off limits.
The last thing I will say before yielding the floor is that if we
were to take the recoverable oil and the recoverable gas and take away
the political obstacles that are in the way, we would have enough to
run this country for 90 years, in terms of the supply of oil, and for
90 years in the supply of gas, all produced here in the United States.
That would mean we would not have to be reliant upon the Middle East to
run this machine called America.
Let's pull away those. The way to do that is to vote in favor of this
amendment and I am very excited we will have the opportunity to do that
shortly.
The PRESIDING OFFICER. The Senator from Louisiana.
Ms. LANDRIEU. The Senator and Senator McConnell have an amendment.
There is an amendment pending. We only have a minute and a half. I wish
to call to the attention of the Chair, Senator Vitter has an amendment
which we will take up to discuss later this afternoon.
The PRESIDING OFFICER. The Senator from Louisiana.

Amendment No. 178

Mr. VITTER. Mr. President, I want to briefly preview an amendment,
Vitter amendment No. 178, which I will formally call up this afternoon
about 2:45. This is a spending amendment to get back to what I believe
is the central challenge we face as a country right now, this
unsustainable path we are on with regard to Federal spending and debt.
This is a very simple, straightforward amendment which I think deserves
and will hopefully get strong bipartisan support. It requires the
Federal Government to get rid of its billions of dollars of inventory--
literally billions and billions of dollars of unutilized or
underutilized real property.
The Federal Real Property Council reports that the Federal Government
owned or operated more than 1.1 million assets worldwide in 2007. It
was worth an estimated $1.5 trillion. But a lot of those assets, real
property buildings, land, are unused or underused. According to OMB,
there are about 47,000 underutilized properties, almost 19,000
completely unutilized properties. That is over 65,000 properties with
an estimated value of $83 billion that would better be diminished,
sold, or demolished.
This is a commonsense way to save money in the Federal budget, to
move us forward in terms of a more sustainable path on spending and
debt. Obviously we need many more larger steps, but this is brought in
that spirit.
I look forward to returning to the floor around 2:45 to make it
formally pending and to offer some brief additional comments.
I yield the floor.
The PRESIDING OFFICER. The Senator from Louisiana.
Ms. LANDRIEU. Mr. President, according to the agreement, we are going
to break now at 12:30 and take up this debate this afternoon and stay
on this bill with open debate. Hopefully, it can be productive and
cordial and then, hopefully, we can move to pass this important bill,
the reauthorization of SBIR.
Mr. President, I ask unanimous consent that the order with respect to
Senator Portman be vitiated.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. LANDRIEU. Mr. President, we will break now and come back and
resume our debate at 2:15.

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