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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3774 Introduced in House (IH)]

<DOC>

116th CONGRESS
  1st Session
                                H. R. 3774

     To amend the Small Business Act to improve the Small Business 
  Innovation Research program and Small Business Technology Transfer 
                    program, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             July 16, 2019

   Mr. Baird (for himself, Ms. Stevens, Mr. Burchett, and Mr. Crow) 
 introduced the following bill; which was referred to the Committee on 
Small Business, and in addition to the Committee on Science, Space, and 
Technology, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
                jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL

 
     To amend the Small Business Act to improve the Small Business 
  Innovation Research program and Small Business Technology Transfer 
                    program, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``The Small Business 
Innovation Research and Small Business Technology Transfer Improvements 
Act of 2019''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Requiring insertion incentives.
Sec. 3. Additional SBIR and STTR technology insertion reporting 
                            requirement.
Sec. 4. Encouraging innovation in United States manufacturing.
Sec. 5. Encouraging innovation in cybersecurity.
Sec. 6. Compliance of Phase III awards with competitive procedures.
Sec. 7. Procurement center representatives and other acquisition 
                            personnel in the SBIR and STTR programs.
Sec. 8. Increased outreach requirements.
Sec. 9. Annual meeting.
Sec. 10. Establishing the Civilian Agency Commercialization Readiness 
                            Program.
Sec. 11. Commercialization assistance pilot programs.
Sec. 12. Phase 0 Proof of Concept Partnership Pilot Program.
Sec. 13. Reporting requirements.
Sec. 14. SBIR Phase flexibility.

SEC. 2. REQUIRING INSERTION INCENTIVES.

    Section 9(y)(5) of the Small Business Act (15 U.S.C. 638(y)(5)) is 
amended by striking ``is authorized to'' and inserting ``shall''.

SEC. 3. ADDITIONAL SBIR AND STTR TECHNOLOGY INSERTION REPORTING 
              REQUIREMENT.

    Section 9(y)(6) of the Small Business Act (15 U.S.C. 638(y)(6)) is 
amended--
            (1) in subparagraph (B), by striking ``and'' at the end;
            (2) in subparagraph (C)(iii), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(D) not later than 120 days after the date of the 
                enactment of this subparagraph, and not later than 
                December 31 of each year thereafter, submit to the 
                Committee on Science, Space, and Technology and the 
                Committee on Small Business of the House of 
                Representatives, and to the Committee on Small Business 
                and Entrepreneurship of the Senate, a report describing 
                the goals set under subparagraph (A) and the incentives 
                used or created under subparagraph (B).''.

SEC. 4. ENCOURAGING INNOVATION IN UNITED STATES MANUFACTURING.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended by 
adding at the end the following new subsection:
    ``(uu) Encouraging Innovation in United States Manufacturing.--In 
carrying out this section, the Administrator shall--
            ``(1) ensure that, in selecting small business concerns to 
        participate in SBIR or STTR programs under this section, 
        Federal agencies give high priority to small manufacturing 
        companies and other small business concerns engaged in or 
        planning to engage in manufacturing research and development 
        for the purpose of developing and producing new products and 
        technologies in the United States; and
            ``(2) include in the annual report to Congress under 
        subsection (b)(7) a determination of whether the priority 
        described in paragraph (1) is being carried out.''.

SEC. 5. ENCOURAGING INNOVATION IN CYBERSECURITY.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
section 4, is further amended by adding at the end the following new 
subsection:
    ``(vv) Encouraging Innovation in Cybersecurity.--In carrying out 
this section, the Administrator shall--
            ``(1) ensure that, in selecting small business concerns to 
        participate in SBIR or STTR programs under this section, 
        Federal agencies engaged in cybersecurity research give high 
        priority to small business concerns that are engaged in 
        cybersecurity research and development, for the purpose of 
        developing and implementing technology services and products to 
        strengthen the security of United States Government and private 
        computer systems, including software, hardware, and portable 
        devices; and
            ``(2) include in the annual report to Congress under 
        subsection (b)(7) a determination of whether the priority 
        described in paragraph (1) is being carried out.''.

SEC. 6. COMPLIANCE OF PHASE III AWARDS WITH COMPETITIVE PROCEDURES.

    Section 9(r)(4) of the Small Business Act (15 U.S.C. 638(r)(4)) is 
amended by inserting ``as direct follow-on awards issued without 
further competition'' after ``developed the technology''.

SEC. 7. PROCUREMENT CENTER REPRESENTATIVES AND OTHER ACQUISITION 
              PERSONNEL IN THE SBIR AND STTR PROGRAMS.

    (a) Definition of Senior Procurement Executive.--Section 9(e) of 
the Small Business Act (15 U.S.C. 638(e)) is amended--
            (1) in paragraph (12)(B), by striking ``and'' at the end;
            (2) in paragraph (13)(B), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(14) the term `senior procurement executive' means an 
        official designated under section 1702(c) of title 41, United 
        States Code, as the senior procurement executive of a Federal 
        agency participating in a SBIR or STTR program.''.
    (b) Inclusion of Senior Procurement Executives in SBIR and STTR.--
            (1) In general.--Section 9(b) of the Small Business Act (15 
        U.S.C. 638(b)) is amended--
                    (A) in paragraph (8), by striking ``and'' at the 
                end;
                    (B) in paragraph (9), by striking the period at the 
                end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(10) to coordinate, where appropriate, with the senior 
        procurement executive of the relevant Federal agency to assist 
        small business concerns participating in a SBIR or STTR program 
        with commercializing research developed under such a program 
        before such small business concern is awarded a contract from 
        such Federal agency.''.
            (2) Technical amendment.--Section 9(b)(3) of the Small 
        Business Act (15 U.S.C. 638(b)(3)) is amended by striking 
        ``and'' at the end.
    (c) Modifications Relating to Procurement Center Representatives 
and Other Acquisition Personnel.--
            (1) SBIR amendment.--Section 9(j) of the Small Business Act 
        (15 U.S.C. 638(j)) is amended by adding at the end the 
        following new paragraph:
            ``(4) Modifications relating to procurement center 
        representatives.--Upon the enactment of this paragraph, the 
        Administrator shall modify the policy directives issued 
        pursuant to this subsection to require procurement center 
        representatives (as described in section 15(l)) to coordinate 
        with the appropriate contracting officer or SBIR program 
        officer, and the appropriate Director of Small and 
        Disadvantaged Business Utilization established pursuant to 
        section 15(k) for the agency letting the contract, to assist 
        small business concerns participating in the SBIR program, 
        particularly in Phase III. The procurement center 
        representatives shall coordinate with the appropriate 
        contracting officer and the appropriate Director of the Office 
        of Small and Disadvantaged Business Utilization established 
        pursuant to section 15(k) for the agency letting the 
        contract.''.
            (2) STTR amendment.--Section 9(p)(2) of the Small Business 
        Act (15 U.S.C. 638(p)(2)) is amended--
                    (A) in subparagraph (E)(ii), by striking ``and'' at 
                the end;
                    (B) in subparagraph (F), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(G) procedures to ensure that procurement center 
                representatives (as described in section 15(l))--
                            ``(i) coordinate with the appropriate 
                        contracting officer or STTR program officer, 
                        and the appropriate Director of Small and 
                        Disadvantaged Business Utilization established 
                        pursuant to section 15(k) for the agency 
                        letting the contract, to assist small business 
                        concerns participating in the STTR program, 
                        particularly in Phase III; and
                            ``(ii) coordinate with the appropriate 
                        contracting officer and the appropriate 
                        Director of the Office of Small and 
                        Disadvantaged Business Utilization established 
                        pursuant to section 15(k) for the Federal 
                        agency letting the contract in providing the 
                        assistance described in clause (i); and''.
    (d) Amendment to Duties of Procurement Center Representatives.--
Section 15(l)(2) of the Small Business Act (15 U.S.C. 644(l)(2)) is 
amended--
            (1) in subparagraph (I), by striking ``and'' at the end;
            (2) by redesignating subparagraph (J) as subparagraph (L); 
        and
            (3) by inserting after subparagraph (I) the following new 
        subparagraphs:
                    ``(J) coordinate with the appropriate contracting 
                officer or SBIR or STTR program officer, and the 
                appropriate Director of Small and Disadvantaged 
                Business Utilization established pursuant to section 
                15(k) for the agency letting the contract, to assist 
                small business concerns participating in a SBIR or STTR 
                program under section 9 with Phase III;
                    ``(K) coordinate with the appropriate contracting 
                officer and the appropriate Director of the Office of 
                Small and Disadvantaged Business Utilization 
                established pursuant to subsection (k) for the agency 
                letting the contract; and''.
    (e) Amendment to the Duties of the Director of Small and 
Disadvantaged Business Utilization for Federal Agencies.--Section 15(k) 
of the Small Business Act (15 U.S.C. 644(k)) is amended--
            (1) in paragraph (19), by striking ``and'' at the end;
            (2) in paragraph (20), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following new paragraphs:
            ``(21) shall coordinate with the appropriate contracting 
        officer of SBIR or STTR program officer to assist small 
        business concerns participating in a SBIR or STTR program under 
        section 9 with researching applicable solicitations for the 
        award of a Federal contract (particularly with the Federal 
        agency that has a funding agreement (as defined under section 
        9) with the concern) to market the research developed by such 
        concern under such SBIR or STTR program; and
            ``(22) shall provide technical assistance to small business 
        concerns participating in a SBIR or STTR program under section 
        9 to submit a bid for an award of a Federal contract, including 
        coordination with procurement center representatives and the 
        appropriate senior procurement executive for the agency letting 
        the contract.''.

SEC. 8. INCREASED OUTREACH REQUIREMENTS.

    (a) In General.--
            (1) SBIR amendment.--Section 9(j) of the Small Business Act 
        (15 U.S.C. 638(j)), as amended by section 8, is further amended 
        by adding at the end the following new paragraph:
            ``(5) Increased outreach requirements.--Upon the enactment 
        of this paragraph, the Administrator shall modify the policy 
        directives issued pursuant to this subsection to require 
        outreach efforts to increase the participation in technological 
        innovation under the SBIR programs among individuals conducting 
        research at minority institutions (as defined in section 365(3) 
        of the Higher Education Act of 1965) and Hispanic-serving 
        institutions (as defined in section 502(a)(5) of such Act).''.
            (2) STTR amendment.--Section 9(p)(2) of the Small Business 
        Act (15 U.S.C. 638(p)(2)), as amended by section 8, is further 
        amended by adding at the end the following new subparagraph:
                    ``(H) procedures for outreach efforts to increase 
                the participation in technological innovation under the 
                SBIR programs among individuals conducting research at 
                minority institutions (as defined in section 365(3) of 
                the Higher Education Act of 1965) and Hispanic-serving 
                institutions (as defined in section 502(a)(5) of such 
                Act).''.
    (b) Funding for Outreach.--Section 9(mm)(1) of the Small Business 
Act (15 U.S.C. 638(mm)(1)) is amended--
            (1) in subparagraph (I), by striking the ``and'' at the 
        end;
            (2) in subparagraph (J), by striking the period at the end 
        and inserting a semicolon; and
            (3) by adding at the end the following new subparagraph:
                    ``(K) the outreach efforts described under 
                subsections (j)(4) and (p)(2)(G); and''.

SEC. 9. ANNUAL MEETING.

    (a) In General.--Section 9 of the Small Business Act (15 U.S.C. 
638), as amended by section 5, is further amended by adding at the end 
the following new subsection:
    ``(ww) Annual Meeting.--
            ``(1) In general.--The head of each Federal agency required 
        to have a program under this section (or a designee) and the 
        Administrator (or a designee) shall meet annually to discuss 
        methods--
                    ``(A) to improve the collection of data under this 
                section;
                    ``(B) to improve the reporting of data to the 
                Administrator under this section;
                    ``(C) to make the application processes for 
                programs under this section more efficient; and
                    ``(D) to increase participation in the programs 
                established under this section.
            ``(2) Report.--Not later than 60 days after the date on 
        which an annual meeting required under paragraph (1) is held, 
        the Administrator shall submit to the Committee on Small 
        Business and Entrepreneurship of the Senate and the Committee 
        on Small Business and the Committee on Science, Space, and 
        Technology of the House of Representatives, a report on the 
        findings of such meeting and recommendations on how to 
        implement changes to programs under this section.''.
    (b) Funding for Annual Meeting.--Section 9(mm)(1) of the Small 
Business Act (15 U.S.C. 638(mm)(1)) as amended by section 9, is further 
amended by adding at the end the following new subparagraph:
                    ``(L) the annual meeting required under subsection 
                (vv).''.

SEC. 10. ESTABLISHING THE CIVILIAN AGENCY COMMERCIALIZATION READINESS 
              PROGRAM.

    Section 9(gg) of the Small Business Act (15 U.S.C. 638(gg)) is 
amended--
            (1) by amending the subsection heading to read as follows: 
        ``Civilian Agency Commercialization Readiness Program'';
            (2) in paragraph (1), by inserting ``to establish a 
        Civilian Agency Commercialization Readiness Program for 
        civilian agencies'' after ``the covered Federal agency'';
            (3) in paragraph (2)(A)--
                    (A) by striking ``establish a pilot program'' and 
                inserting ``establish a Civilian Agency 
                Commercialization Readiness Program under this 
                subsection''; and
                    (B) by striking ``the pilot program'' and inserting 
                ``such Civilian Agency Commercialization Readiness 
                Program'';
            (4) in paragraphs (3) and (4), by striking ``a pilot 
        program'' each place such term appears and inserting ``a 
        Civilian Commercialization Readiness Program'';
            (5) in paragraph (6), by striking ``the pilot program'' and 
        inserting ``a Civilian Agency Commercialization Readiness 
        Program'';
            (6) by striking paragraph (7) and redesignating paragraph 
        (8) as paragraph (7); and
            (7) in paragraph (7) (as so redesignated), by amending 
        subparagraph (B) to read as follows:
                    ``(B) the term `Civilian Agency Commercialization 
                Readiness Program' means each program established under 
                paragraph (1).''.

SEC. 11. COMMERCIALIZATION ASSISTANCE PILOT PROGRAMS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
section 10, is further amended by adding at the end the following new 
subsection:
    ``(xx) Commercialization Assistance Pilot Programs.--
            ``(1) Pilot programs implemented.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), not later than one year after the 
                date of the enactment of this subsection, a covered 
                agency shall implement a commercialization assistance 
                pilot program, under which an eligible entity may 
                receive a subsequent Phase II SBIR award.
                    ``(B) Exception.--If the Administrator determines 
                that a covered agency has a program that is 
                sufficiently similar to the commercialization 
                assistance pilot program established under this 
                subsection, such covered agency shall not be required 
                to implement a commercialization assistance pilot 
                program under this subsection.
            ``(2) Percent of agency funds.--The head of each covered 
        agency may allocate not more than 5 percent of the funds 
        allocated to the SBIR program of the covered agency for the 
        purpose of making a subsequent Phase II SBIR award under the 
        commercialization assistance pilot program.
            ``(3) Termination.--A commercialization assistance pilot 
        program established under this subsection shall terminate on 
        September 30, 2024.
            ``(4) Application.--To be selected to receive a subsequent 
        Phase II SBIR award under a commercialization assistance pilot 
        program, an eligible entity shall submit to the covered agency 
        implementing such pilot program an application at such time, in 
        such manner, and containing such information as the covered 
        agency may require, including--
                    ``(A) an updated Phase II commercialization plan; 
                and
                    ``(B) the source and amount of the matching funding 
                required under paragraph (5).
            ``(5) Matching funding.--
                    ``(A) In general.--The Administrator shall require, 
                as a condition of any subsequent Phase II SBIR award 
                made to an eligible entity under this subsection, that 
                a matching amount (excluding any fees collected by the 
                eligible entity receiving such award) equal to the 
                amount of such award be provided from an eligible 
                third-party investor.
                    ``(B) Ineligible sources.--An eligible entity may 
                not use funding from ineligible sources to meet the 
                matching requirement of subparagraph (A).
            ``(6) Award.--A subsequent Phase II SBIR award made to an 
        eligible entity under this subsection--
                    ``(A) may not exceed the limitation described under 
                subsection (aa)(1); and
                    ``(B) shall be disbursed during Phase II.
            ``(7) Use of funds.--The funds awarded to an eligible 
        entity under this subsection may only be used for research and 
        development activities that build on eligible entity's Phase II 
        program and ensure the research funded under such Phase II is 
        rapidly progressing towards commercialization.
            ``(8) Selection.--In selecting eligible entities to 
        participate in a commercialization assistance pilot program 
        under this subsection, the head of a covered agency shall 
        consider--
                    ``(A) the extent to which such award could aid the 
                eligible entity in commercializing the research funded 
                under the eligible entity's Phase II program;
                    ``(B) whether the updated Phase II 
                commercialization plan submitted under paragraph (4) 
                provides a sound approach for establishing technical 
                feasibility that could lead to commercialization of 
                such research;
                    ``(C) whether the proposed activities to be 
                conducted under such updated Phase II commercialization 
                plan further improve the likelihood that such research 
                will provide societal benefits;
                    ``(D) whether the small business concern has 
                progressed satisfactorily in Phase II to justify 
                receipt of a subsequent Phase II SBIR award;
                    ``(E) the expectations of the eligible third-party 
                investor that provides matching funding under paragraph 
                (5); and
                    ``(F) the likelihood that the proposed activities 
                to be conducted under such updated Phase II 
                commercialization plan using matching funding provided 
                by such eligible third-party investor will lead to 
                commercial and societal benefit.
            ``(9) Evaluation report.--Not later than 3 years after the 
        date of the enactment of this subsection, the Comptroller 
        General of the United States shall submit to the Committee on 
        Science, Space, and Technology and the Committee on Small 
        Business of the House of Representatives, and the Committee on 
        Small Business and Entrepreneurship of the Senate, a report 
        including--
                    ``(A) a summary of the activities of 
                commercialization assistance pilot programs carried out 
                under this subsection;
                    ``(B) a detailed compilation of results achieved by 
                such commercialization assistance pilot programs, 
                including the number of eligible entities that received 
                awards under such programs;
                    ``(C) the rate at which each eligible entity that 
                received a subsequent Phase II SBIR award under this 
                subsection commercialized research of the recipient;
                    ``(D) the growth in employment and revenue of 
                eligible entities that is attributable to participation 
                in a commercialization assistance pilot program;
                    ``(E) a comparison of commercialization success of 
                eligible entities participating in a commercialization 
                assistance pilot program with recipients of an 
                additional Phase II SBIR award under subsection (ff);
                    ``(F) demographic information, such as ethnicity 
                and geographic location, of eligible entities 
                participating in a commercialization assistance pilot 
                program;
                    ``(G) an accounting of the funds used at each 
                covered agency that implements a commercialization 
                assistance pilot program under this subsection;
                    ``(H) the amount of matching funding provided by 
                eligible third-party investors, set forth separately by 
                source of funding;
                    ``(I) an analysis of the effectiveness of the 
                commercialization assistance pilot program implemented 
                by each covered agency; and
                    ``(J) recommendations for improvements to the 
                commercialization assistance pilot program.
            ``(10) Definitions.--For purposes of this subsection:
                    ``(A) Covered agency.--The term `covered agency' 
                means a Federal agency required to have an SBIR 
                program.
                    ``(B) Eligible entity.--The term `eligible entity' 
                means a small business concern that has received a 
                Phase II award under an SBIR program and an additional 
                Phase II SBIR award under subsection (ff) from the 
                covered agency to which such small business concern is 
                applying for a subsequent Phase II SBIR award.
                    ``(C) Eligible third-party investor.--The term 
                `eligible third-party investor' means a small business 
                concern other than an eligible entity, a venture 
                capital firm, an individual investor, a non-SBIR 
                Federal, State or local government, or any combination 
                thereof.
                    ``(D) Ineligible sources.--The term `ineligible 
                sources' means the following:
                            ``(i) The eligible entity's internal 
                        research and development funds.
                            ``(ii) Funding in forms other than cash, 
                        such as in-kind or other intangible assets.
                            ``(iii) Funding from the owners of the 
                        eligible entity, or the family members or 
                        affiliates of such owners.
                            ``(iv) Funding attained through loans or 
                        other forms of debt obligations.
                    ``(E) Subsequent phase ii sbir award.--The term 
                `subsequent Phase II SBIR award' means an award granted 
                to an eligible entity under this subsection to carry 
                out further commercialization activities for research 
                conducted pursuant to an SBIR program.''.

SEC. 12. PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PROGRAM.

    Section 9(jj) of the Small Business Act (15 U.S.C. 638(jj) is 
amended--
            (1) in paragraph (1)--
                    (A) by striking ``The Director of the National 
                Institutes of Health'' and inserting ``Each covered 
                agency head''; and
                    (B) by striking ``the Director'' and inserting 
                ``each covered agency head'';
            (2) by amending subparagraph (A) of paragraph (2) to read 
        as follows:
                    ``(A) the term `covered agency head' means the 
                Director of the National Institutes of Health, the 
                Director of the National Science Foundation, the 
                Administrator of the National Aeronautics and Space 
                Administration and the Secretary of Energy;'';
            (3) in paragraph (4)--
                    (A) in subparagraph (A), by striking ``The 
                Director'' and inserting ``Each covered agency head''; 
                and
                    (B) in subparagraph (B), by striking ``the Director 
                shall consider, in addition to any other criteria the 
                Director'' and inserting ``each covered agency head 
                shall consider, in addition to any other criteria the 
                appropriate covered agency head''; and
            (4) in paragraph (6), by striking ``The Director'' and 
        inserting ``Each covered agency head''.

SEC. 13. REPORTING REQUIREMENTS.

    (a) Annual Report to Congress.--Section 9(b)(7) of the Small 
Business Act (15 U.S.C. 638(b)(7)) is amended by striking ``to report 
not less than annually'' and inserting ``to submit a report not later 
than December 31 of each year''.
    (b) Annual Report to SBA and the Office of Science and Technology 
Policy.--Section 9(g)(9) of the Small Business Act (15 U.S.C. 
638(g)(9)) is amended--
            (1) by striking ``make an annual report'' and inserting 
        ``not later than March 30 of each year, submit a report''; and
            (2) by striking ``and the Office of Science and Technology 
        Policy'' and inserting ``, the Office of Science and Technology 
        Policy, the Committee on Science, Space, and Technology and the 
        Committee on Small Business of the House of Representatives, 
        and the Committee on Small Business and Entrepreneurship of the 
        Senate''.

SEC. 14. SBIR PHASE FLEXIBILITY.

    Section 9(cc) of the Small Business Act (15 U.S.C. 638(cc)) is 
amended by striking ``During fiscal years'' and all that follows 
through ``may each provide'' and inserting ``During fiscal years 2020 
through 2024, all agencies participating in the SBIR program may 
provide''.
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