SBIR/STTR Reauthorization Act
Floor Speech
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Madam Chairman, I rise today in support of H.R. 5819. The Small Business Innovation and Research and Small Business Technology Transfer programs are a critical means of supporting small businesses' research and innovative competitiveness and their technology training and technology exchange.
This bill will increase the number of small firms that can take advantage of these valuable programs by requiring federal agencies to spend at least 3 percent of their annual research and development budgets on these programs. In addition, it will increase the maximum research and technology transfer awards so that these funds are adjusted for inflation and other changes in the economy. These changes will make SBIR and STTR programs available to more businesses and increase the impact they will have on those firms. I am extremely supportive of these provisions and strongly endorse the inclusion of them in this bill.
I think it is important, however, to raise concerns about another section of the bill. Section 201 changes the definition of a small business. It clarifies that businesses that receive the backing of venture capital firms can still be considered small for the purposes of the SBIR and STTR programs. Specifically, the bill permits a small firm that is 100 percent backed by venture capital to be defined as long as not one venture capital firm owns more than 49 percent of the business and those venture capital companies have fewer than 100 employees. In addition, the bill permits large venture capital firms to have up to a 10 percent stake in the small business without jeopardizing the small company's SBIR and STTR eligibility.
These changes to the definition of a small business are disconcerting. Although in this bill they are limited to the SBIR and STTR programs, these provisions establish a dangerous precedent that could pave the way for further alteration of the small business definition. Expanding the eligibility of small business programs to large or venture-capital-funded small businesses puts at risk the success and support of those companies that are truly independently owned and operated. I support H.R. 5819, but because of Section 201, I do so with reservations.
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