To amend the Small Business Act to promote the commercialization of certain small business research and development projects, and for other purposes.

Summary: Commercializing Small Business Research and Development Act - Amends the Small Business Act to state as the policy of Congress that Small Business Administration (SBA) research and development (R&D) programs should focus on promoting R&D of projects governed by commercial business plans which have significant potential to produce products or services for the marketplace or for acquisition by federal agencies.

Includes energy-related and rare disease-related research topics as deserving special consideration under Small Business Innovation Research (SBIR) Program research topics.

Includes nanotechnology-related topics within authorized research topics under the SBIR Program and Small Business Technology Transfer (STTR) Program.

Requires each federal agency that is required to have an SBIR program and that awards annually $5 billion or more in procurement contracts to establish, for FY2010 and thereafter, annual goals for the commercialization of projects funded by SBIR awards.

Directs each federal agency required to conduct an SBIR program to establish a commercialization program that supports the progress of SBIR awardees to the third (final) phase. Provides funding for such commercialization programs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Commercializing Small Business 
Research and Development Act''.

SEC. 2. FOCUS ON COMMERCIALIZATION.

    Section 9(a) of the Small Business Act (15 U.S.C. 638(a)) is 
amended by adding at the end the following: ``It is further the policy 
of Congress that the programs established in this section should focus 
on promoting research and development of projects governed by 
commercial business plans, which have significant potential to produce 
products or services for the marketplace or for acquisition by Federal 
agencies.''.

SEC. 3. INCLUSION OF ENERGY-RELATED RESEARCH TOPICS AND RARE DISEASE-
              RELATED RESEARCH TOPICS AS DESERVING ``SPECIAL 
              CONSIDERATION'' AS SBIR RESEARCH TOPICS.

    Section 9(g)(3) of the Small Business Act (15 U.S.C. 638(g)(3)) is 
amended--
            (1) in the matter preceding subparagraph (A) by inserting 
        after ``critical technologies'' the following: ``or pressing 
        research priorities'';
            (2) at the end of subparagraph (A) by striking ``or''; and
            (3) 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 subsequent reports issued by the 
                National Academy of Sciences on sustainability, energy, 
                and 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 subsequent reports issued by the National 
                Institutes of Health on rare diseases research 
                activities; or
                    ``(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 `Transportation Research, Development 
                and Technology Strategic Plan (2006-2010)' issued by 
                the United States Department of Transportation Research 
                and Innovative Technology Administration, and in 
                subsequent reports issued by the National Academy of 
                Sciences and United States Department of Transportation 
                on transportation and infrastructure;''.

SEC. 4. NANOTECHNOLOGY-RELATED RESEARCH TOPICS.

    (a) SBIR.--Section 9(g)(3) of the Small Business Act (15 U.S.C. 
638(g)(3)), as amended, is further amended--
            (1) at the end of subparagraph (D) by striking ``or'';
            (2) at the end of subparagraph (E) by adding ``or''; and
            (3) by adding at the end the following:
                    ``(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 subsequent reports issued by the 
                National Science and Technology Council Committee on 
                Technology, focusing on areas of nanotechnology 
                identified in such plan;''.
    (b) STTR.--Section 9(o)(3) of the Small Business Act (15 U.S.C. 
638(o)(3)) is amended--
            (1) at the end of subparagraph (A) by striking ``or'';
            (2) at the end of subparagraph (B) by adding ``or''; and
            (3) by adding at the end the following:
                    ``(C) by 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 subsequent reports issued by the 
                National Science and Technology Council Committee on 
                Technology, focusing on areas of nanotechnology 
                identified in such plan;''.

SEC. 5. CLARIFYING THE DEFINITION OF ``PHASE THREE''.

    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 after ``a third phase'' the following: ``, which 
        shall consist of work that derives from, extends, or logically 
        concludes efforts performed under prior SBIR funding agreements 
        (which may be referred to as `Phase III')'';
            (2) in paragraph (8) by striking ``and'' at the end;
            (3) in paragraph (9) by striking the period at the end and 
        inserting ``; and''; and
            (4) by adding at the end the following:
            ``(10) the term `commercialization' means the process of 
        developing marketable products or services and producing and 
        delivering products or services for sale (whether by the 
        originating party or by others) to government or commercial 
        markets.''.

SEC. 6. AGENCY RESEARCH GOALS.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended by 
striking subsection (h) and inserting the following:
    ``(h) Agency Research Goals.--
            ``(1) In general.--In addition to the requirements of 
        subsection (f), each Federal agency that is required by this 
        section to have an SBIR program and that awards annually 
        $5,000,000,000 or more in procurement contracts shall, 
        effective for fiscal year 2010 and each fiscal year thereafter, 
        establish annual goals for commercialization of projects funded 
        by SBIR awards.
            ``(2) Specific goals.--The goals required by paragraph (1) 
        shall include specific goals for each of the following:
                    ``(A) The percentage of SBIR projects that receive 
                funding for the third phase (as defined in subsection 
                (e)(4)(C)).
                    ``(B) The percentage of SBIR projects that are 
                successfully integrated into a program of record.
                    ``(C) The amount of Federal dollars received by 
                SBIR projects through Federal contracts, not including 
                dollars received through the SBIR program.
            ``(3) Submission to committees.--For each fiscal year for 
        which goals are required by paragraph (1), the agency shall 
        submit to the Committee on Small Business of the House of 
        Representatives and the Committee on Small Business and 
        Entrepreneurship of the Senate--
                    ``(A) not later than 60 days after the beginning of 
                the fiscal year, the goals; and
                    ``(B) not later than 90 days after the end of the 
                fiscal year, data on the extent to which the goals were 
                met and a description of the methodology used to 
                collect such data.''.

SEC. 7. COMMERCIALIZATION PROGRAMS.

    Section 9 of the Small Business Act (15 U.S.C. 638) as amended, is 
further amended, by adding at the end the following:
    ``(aa) Commercialization Programs.--
            ``(1) In general.--Each agency required by this section to 
        conduct an SBIR program shall establish a commercialization 
        program that supports the progress of SBIR awardees to the 
        third phase. The commercialization program may include 
        activities such as partnership databases, partnership 
        conferences, multiple second phases, mentoring between prime 
        contractors and SBIR awardees, multiple second phases with 
        matching private investment requirements, jumbo awards, SBIR 
        helpdesks, and transition assistance programs. The agency shall 
        include in its annual report an analysis of the various 
        activities considered for inclusion in the commercialization 
        program and a statement of the reasons why each activity 
        considered was included or not included, as the case may be.
            ``(2) Funding for commercialization programs.--
                    ``(A) In general.--From amounts made available to 
                carry out this paragraph, the Administrator may, on 
                petition by agencies required by this section to 
                conduct an SBIR program, transfer funds to such 
                agencies to support the commercialization programs of 
                such agencies.
                    ``(B) Petitions.--The Administrator shall establish 
                rules for making transfers under subparagraph (A). The 
                initial set of rules shall be promulgated not later 
                than 90 days after the date of the enactment of this 
                paragraph.
                    ``(C) Authorization of appropriations.--There is 
                authorized to be appropriated to the Administrator to 
                carry out this paragraph $27,500,000 for fiscal year 
                2010 and each fiscal year thereafter.
            ``(3) Funding limitation.--For payment of expenses incurred 
        to administer the commercialization programs described in 
        paragraphs (1) and (2), the head of an agency may use not more 
        than an amount equal to 1 percent of the funds set aside for 
        the agency's Small Business Innovation Research program. Such 
        funds--
                    ``(A) shall not be subject to the limitations on 
                the use of funds in subsection (f)(2); and
                    ``(B) shall not be used for the purpose of funding 
                costs associated with salaries and expenses of 
                employees of the Federal Government.''.