H.R. 5819, the “SBIR/STTR Reauthorization Act”

Today, H.R. 5819, the "SBIR/STTR Reauthorization Act," was marked-up in the House committee on Small Business. The Bill which was introduced by Congresswoman Nydia M. Velázquez (D - NY), contains a provision that changes the definition of a small business from the current definition of "independently owned" to include businesses owned up to 49.9 percent by a venture capital firm. Title II of the act amends Sec. 9 (e) of the Small Business Act, which is specific to the SBIR program. It is our understanding that the bill limits venture capital participation in a small business concern to the SBIR program. However, it appears that the change creates a dangerous precedent for venture capital participation in other small business programs. If the definition of a small business is amended to include SBIR participation, even for the purposes of SBIR, legislators are opening the door for venture capital participation in other small business programs.

Additionally, according to Genomeweb.com the bill would, "reauthorize the programs through 2010 and would give Congress time to examine how the programs are working. The bill also would increase funding levels, raising Phase I awards from $100,000 to $300,000 and Phase II awards from $750,000 to $2.2 million, to reflect the rising costs of high-tech research. The authorization also increases the SBIR program's flexibility by allowing cross-agency awards, letting applicants apply directly for Phase II funding, and loosening eligibility for awards to include small businesses that are backed by venture capital funding. The bill expands the requirements for databases of recipients and it requires interoperability and accessibility between databases in order to allow for better congressional oversight." (http://www.genomeweb.com/issues/news/146371-1.html)

Please visit the following link to watch a clip of the mark-up of H.R. 5819 in the House Committee on Small Business: http://youtube.com/watch?v=7lpXdgDcrL0

Please click here to view a copy of the bill: http://thomas.loc.gov/cgi-bin/query/F?c110:1:./temp/~c110muAyO8:e1172: