II 

117TH CONGRESS 

2D SESSION S. 4158 

To amend the small business laws to create certain requirements with respect 

to the SBIR and STTR program, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 5, 2022 

Mr. PADILLA introduced the following bill; which was read twice and referred 

to the Committee on Small Business and Entrepreneurship 

A BILL 

To amend the small business laws to create certain requirements with respect to the SBIR and STTR program, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Encouraging Small 

5 Business Innovation Act’’. 

6 SEC. 2. INCLUSION OF TESTING AND EVALUATION FOR ALL 

7 FEDERAL AGENCIES. 

8 Section 9(gg) of the Small Business Act (15 U.S.C. 

9 638(gg)) is amended— 


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1 (1) in the subsection heading, by striking 

2 ‘‘PILOT PROGRAM’’ and inserting ‘‘TESTING, EVAL3 UATION, AND COMMERCIALIZATION’’; 

4 (2) in paragraph (1), in the matter preceding 

5 subparagraph (A), by inserting ‘‘establish a program 

6 to’’ after ‘‘may’’; 

7 (3) in paragraph (2)(A), by striking ‘‘pilot pro8 gram’’ each place that term appears and inserting 

9 ‘‘covered program’’; 

10 (4) in paragraph (3), by striking ‘‘pilot pro11 gram’’ and inserting ‘‘covered program’’; 

12 (5) in paragraph (4), by striking ‘‘pilot pro13 gram’’ and inserting ‘‘covered program’’; 

14 (6) in paragraph (6), by striking ‘‘pilot pro15 gram’’ and inserting ‘‘covered program’’; and 

16 (7) by striking paragraphs (7) and (8) and in17 serting the following: 

18 ‘‘(7) DEFINITIONS.—In this subsection— 

19 ‘‘(A) the term ‘covered Federal agency’ 

20 means a Federal agency participating in the 

21 SBIR program or the STTR program; and 

22 ‘‘(B) the term ‘covered program’ means a 

23 program established under paragraph (1).’’. 


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1 SEC. 3. INCLUSION OF SMALL BUSINESS INVESTMENT COM2 PANIES IN SBIR AND STTR. 

3 Section 9 of the Small Business Act (15 U.S.C. 638) 

4 is amended— 

5 (1) by striking ‘‘or private equity firm invest6 ment’’ each place that term appears and inserting 

7 ‘‘private equity firm, or SBIC investment’’; 

8 (2) by striking ‘‘or private equity firms’’ each 

9 place that term appears and inserting ‘‘private eq10 uity firms, or SBICs’’; 

11 (3) in subsection (e)— 

12 (A) in paragraph (13)(B), by striking 

13 ‘‘and’’ at the end; 

14 (B) in paragraph (14), by striking the pe15 riod at the end and inserting ‘‘; and’’; and 

16 (C) by adding at the end the following: 

17 ‘‘(15) the term ‘SBIC’ means a small business 

18 investment company as defined in section 103 of the 

19 Small Business Investment Act of 1958 (15 U.S.C. 

20 662).’’; and 

21 (4) in the heading for subsection (dd), by strik22 ing ‘‘OR PRIVATE EQUITY FIRMS’’ and inserting 

23 ‘‘PRIVATE EQUITY FIRMS, OR SBICS’’. 


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1 SEC. 4. CALCULATION OF LEVERAGE OF SMALL BUSINESS 

2 INVESTMENT COMPANIES THAT INVEST IN 

3 SBIR OR STTR PARTICIPANTS. 

4 Section 303(b)(2) of the Small Business Investment 

5 Act of 1958 (15 U.S.C. 683(b)(2)) is amended by adding 

6 at the end the following: 

7 ‘‘(E) INVESTMENTS IN SBIR AND STTR

8 PARTICIPANTS.— 

9 ‘‘(i) DEFINITIONS.—In this subpara10 graph— 

11 ‘‘(I) the term ‘cost’ has the 

12 meaning given the term in section 502 

13 of the Federal Credit Reform Act of 

14 1990 (2 U.S.C. 661a); and 

15 ‘‘(II) the term ‘SBIR or STTR 

16 participant’ means a small business 

17 concern that receives contracts or 

18 grants pursuant to section 9 of the 

19 Small Business Act (15 U.S.C. 638). 

20 ‘‘(ii) EXCLUSION.—Subject to clause 

21 (iii), in calculating the outstanding lever22 age of a company for purposes of subpara23 graph (A), the Administrator shall exclude 

24 the amount of any investment made in a 

25 SBIR or STTR participant, if such invest26 ment is made in the first fiscal year after 


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1 the date of enactment of this subparagraph 

2 or any fiscal year thereafter by a company 

3 licensed during the applicable fiscal year. 

4 ‘‘(iii) LIMITATIONS.— 

5 ‘‘(I) AMOUNT OF EXCLUSION.— 

6 The amount excluded under clause (i) 

7 for a company shall not exceed 33 

8 percent of the private capital of that 

9 company. 

10 ‘‘(II) MAXIMUM INVESTMENT.— 

11 A company shall not make an invest12 ment in any 1 SBIR or STTR partici13 pant in an amount equal to more than 

14 20 percent of the private capital of 

15 that company. 

16 ‘‘(III) OTHER TERMS.—The ex17 clusion of amounts under clause (i) 

18 shall be subject to such terms as the 

19 Administrator may impose to ensure 

20 that there is no cost with respect to 

21 purchasing or guaranteeing any de22 benture involved.’’. 


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1 SEC. 5. ANNUAL MEETING FOR FEDERAL AGENCIES WITH A 

2 SBIR OR STTR PROGRAM. 

3 Section 9 of the Small Business Act (15 U.S.C. 638) 

4 is amended by adding at the end the following: 

5 ‘‘(vv) ANNUAL MEETING.— 

6 ‘‘(1) IN GENERAL.—The head of each Federal 

7 agency required to have a program under this sec8 tion (or a designee) and the Administrator (or a des9 ignee) shall meet annually to discuss methods— 

10 ‘‘(A) to improve the collection of data 

11 under this section; 

12 ‘‘(B) to improve the reporting of data to 

13 the Administrator under this section; 

14 ‘‘(C) to make the application processes for 

15 programs under this section more efficient; and 

16 ‘‘(D) to increase participation in the pro17 grams under this section. 

18 ‘‘(2) REPORTING.—Not later than 60 days after 

19 the date on which an annual meeting required under 

20 paragraph (1) is held, the Administrator shall sub21 mit to the Committee on Small Business and Entre22 preneurship of the Senate and the Committee on 

23 Small Business and the Committee on Science, 

24 Space, and Technology of the House of Representa25 tives a report on the findings of the meeting and 


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1 recommendations on how to implement changes to 

2 programs under this section.’’. 

3 SEC. 6. INCREASING PARTICIPATION OF UNDERSERVED 

4 POPULATIONS IN THE SBIR AND STTR PRO5 GRAMS. 

6 (a) IN GENERAL.—Section 9(mm)(2) of the Small 

7 Business Act (15 U.S.C. 638(mm)(2)) is amended to read 

8 as follows: 

9 ‘‘(2) OUTREACH AND TECHNICAL ASSIST10 ANCE.—A Federal agency participating in the pro11 gram under this subsection shall use a portion of the 

12 funds authorized for uses under paragraph (1) to 

13 carry out the policy directive required under sub14 section (j)(2)(F) and to increase the participation of 

15 States with respect to which a low level of SBIR 

16 awards have historically been awarded.’’. 

17 (b) CONFORMING AMENDMENT.—Section 9(mm)(6) 

18 of the Small Business Act (15 U.S.C. 638(mm)(6)) is 

19 amended by striking ‘‘paragraph (2)(A) and any use of 

20 the waiver authority under paragraph (2)(B)’’ and insert21 ing ‘‘paragraph (2)’’. 

Æ 


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