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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2965 Engrossed in House (EH)]

111th CONGRESS
  1st Session
                                H. R. 2965

_______________________________________________________________________

                                 AN ACT

 
  To amend the Small Business Act with respect to the Small Business 
Innovation Research Program and the 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 ``Enhancing Small 
Business Research and Innovation Act of 2009''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
   TITLE I--PROGRAM EXTENSION AND VENTURE CAPITAL OPERATING COMPANY 
                              INVOLVEMENT

Sec. 101. Extension of termination dates.
Sec. 102. Ensuring that innovative small businesses with substantial 
                            investment from venture capital operating 
                            companies are able to participate in the 
                            SBIR and STTR programs.
 TITLE II--COMMERCIALIZATION ACTIVITIES AND RESEARCH TOPICS DESERVING 
                         SPECIAL CONSIDERATION

Sec. 201. Focus on commercialization.
Sec. 202. Inclusion of renewable energy-related research topics and 
                            rare disease-related research topics as 
                            deserving ``special consideration'' as SBIR 
                            research topics.
Sec. 203. Nanotechnology-related research topics.
Sec. 204. Clarifying the definition of ``Phase Three''.
Sec. 205. Agency research goals.
Sec. 206. Commercialization programs.
               TITLE III--RURAL DEVELOPMENT AND OUTREACH

Sec. 301. Outreach and support activities.
Sec. 302. Preferences.
Sec. 303. Obtaining SBIR applicant's consent to release contact 
                            information to economic development 
                            organizations.
Sec. 304. Increased partnerships between SBIR awardees and prime 
                            contractors, venture capital investment 
                            companies, and larger businesses.
                  TITLE IV--SBIR AND STTR ENHANCEMENT

Sec. 401. Increased number of research topic solicitations annually and 
                            shortened period for final decisions on 
                            applications.
Sec. 402. Agencies should fund vital R&D projects with the potential 
                            for commercialization.
Sec. 403. Federal agency engagement with SBIR awardees that have been 
                            awarded multiple Phase One awards but have 
                            not been awarded Phase Two awards.
Sec. 404. Funding for administrative, oversight, and contract 
                            processing costs.
Sec. 405. Comptroller general audit of how Federal agencies calculate 
                            extramural research budgets.
Sec. 406. Agency databases to support program evaluation.
Sec. 407. Agency databases to support technology utilization.
Sec. 408. Interagency Policy Committee.
Sec. 409. National Research Council SBIR Study.
Sec. 410. Express authority to ``fast-track'' Phase Two awards for 
                            promising Phase One research.
Sec. 411. Increased SBIR and STTR award levels.
Sec. 412. Express authority for an agency to award sequential Phase Two 
                            awards for SBIR-funded projects.
Sec. 413. First phase required.
Sec. 414. Involvement of Chief Counsel for Advocacy.
Sec. 415. Minority institution program.
Sec. 416. Areas that have lost a major source of employment.
Sec. 417. Enhancing veteran participation in SBIR.
Sec. 418. Veteran preference.
Sec. 419. Medical technology.
        TITLE V--IMPROVING WATER USE AND TRANSMISSION TECHNOLOGY

Sec. 501. Improving water use and transmission technology.
 TITLE VI--GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING COMPANY 
                              INVOLVEMENT

Sec. 601. GAO study with respect to venture capital operating company 
                            involvement.

   TITLE I--PROGRAM EXTENSION AND VENTURE CAPITAL OPERATING COMPANY 
                              INVOLVEMENT

SEC. 101. EXTENSION OF TERMINATION DATES.

    (a) SBIR.--Section 9(m) of the Small Business Act (15 U.S.C. 
638(m)) is amended by striking ``2008'' and inserting ``2011''.
    (b) STTR.--Section 9(n)(1)(A) of the Small Business Act (15 U.S.C. 
638(n)(1)(A)) is amended by striking ``2009'' and inserting ``2011''.

SEC. 102. ENSURING THAT INNOVATIVE SMALL BUSINESSES WITH SUBSTANTIAL 
              INVESTMENT FROM VENTURE CAPITAL OPERATING COMPANIES ARE 
              ABLE TO PARTICIPATE IN THE SBIR AND STTR PROGRAMS.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended by 
adding at the end the following:
    ``(aa) Venture Capital Operating Companies.--Effective only for the 
SBIR and STTR programs the following shall apply:
            ``(1) A business concern that has more than 500 employees 
        shall not qualify as a small business concern.
            ``(2) In determining whether a small business concern is 
        independently owned and operated under section 3(a)(1) or meets 
        the small business size standards instituted under section 
        3(a)(2), the Administrator shall not consider a business 
        concern to be affiliated with a venture capital operating 
        company (or with any other business that the venture capital 
        operating company has financed) if--
                    ``(A) the venture capital operating company does 
                not own 50 percent or more of the business concern; and
                    ``(B) employees of the venture capital operating 
                company do not constitute a majority of the board of 
                directors of the business concern.
            ``(3) A business concern shall be deemed to be 
        `independently owned and operated' if--
                    ``(A) it is owned in majority part by one or more 
                natural persons or venture capital operating companies;
                    ``(B) there is no single venture capital operating 
                company that owns 50 percent or more of the business 
                concern; and
                    ``(C) there is no single venture capital operating 
                company the employees of which constitute a majority of 
                the board of directors of the business concern.
            ``(4) If a venture capital operating company controlled by 
        a business with more than 500 employees (in this paragraph 
        referred to as a `VCOC under large business control') has an 
        ownership interest in a small business concern that is owned in 
        majority part by venture capital operating companies, the small 
        business concern is eligible to receive an award under the SBIR 
        or STTR program only if--
                    ``(A) not more than two VCOCs under large business 
                control have an ownership interest in the small 
                business concern; and
                    ``(B) the VCOCs under large business control do not 
                collectively own more than 20 percent of the small 
                business concern.
            ``(5) The term `venture capital operating company' means a 
        business concern--
                    ``(A) that--
                            ``(i) is a Venture Capital Operating 
                        Company, as that term is defined in regulations 
                        promulgated by the Secretary of Labor; or
                            ``(ii) is an entity that--
                                    ``(I) is registered under the 
                                Investment Company Act of 1940 (15 
                                U.S.C. 80a-51 et seq.); or
                                    ``(II) is an investment company, as 
                                defined in subsection (a)(1) of section 
                                3 of such Act (15 U.S.C. 80a-3), which 
                                is not registered under such Act 
                                because of an exemption under 
                                subsection (c)(1) or subsection (c)(7) 
                                of such section; and
                    ``(B) that is itself organized or incorporated and 
                domiciled in the United States, or is controlled by a 
                business concern that is incorporated and domiciled in 
                the United States.''.

 TITLE II--COMMERCIALIZATION ACTIVITIES AND RESEARCH TOPICS DESERVING 
                         SPECIAL CONSIDERATION

SEC. 201. 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. 202. INCLUSION OF RENEWABLE 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 (including renewable energy-related 
        technologies)'';
            (2) in subparagraph (A) by striking ``or'' at the end; 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. 203. 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) in subparagraph (D) by striking ``or'' at the end;
            (2) in subparagraph (E) by adding ``or'' at the end; 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) in subparagraph (A) by striking ``or'' at the end;
            (2) in subparagraph (B) by adding ``or'' at the end; 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. 204. 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. 205. AGENCY RESEARCH GOALS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further 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 and the Committee on 
        Science and Technology 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, a description of the methodology used to collect 
                such data, and a description of the reasons why the 
                goals were met or not met.''.

SEC. 206. 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:
    ``(bb) 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) Space shuttle program.--Each agency required to 
        establish a commercialization program under paragraph (1) and 
        that carries out construction, assembly, or research and 
        development activities with respect to the space shuttle 
        program (also known as the space transportation system) shall 
        include, as part of such commercialization program, activities 
        to assist small business concerns affected by the termination 
        of the space shuttle program to commercialize technologies 
        through SBIR. Activities to assist such small business concerns 
        may include activities described in paragraph (1) and other 
        activities to assist small business concerns making the 
        transition from work relating to the space shuttle program to 
        work in related or unrelated industries.
            ``(3) 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.
            ``(4) Funding limitation.--For payment of expenses incurred 
        to administer the commercialization programs described in this 
        subsection, 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.''.

               TITLE III--RURAL DEVELOPMENT AND OUTREACH

SEC. 301. OUTREACH AND SUPPORT ACTIVITIES.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by inserting after subsection (r) the following:
    ``(s) Outreach and Support Activities.--
            ``(1) In general.--Subject to the other provisions of this 
        subsection, the Administrator shall make grants on a 
        competitive basis to organizations, to be used by the 
        organizations to do one or both of the following:
                    ``(A) To conduct outreach efforts to increase 
                participation in the programs under this section.
                    ``(B) To provide application support and 
                entrepreneurial and business skills support to 
                prospective participants in the programs under this 
                section.
            ``(2) Authorization of appropriations.--There is authorized 
        to be appropriated to the Administrator $10,000,000 to carry 
        out paragraph (1) for each of fiscal years 2010 and 2011.
            ``(3) Amount of assistance.--For each of subparagraphs (A) 
        and (B) of paragraph (1), the amount of assistance provided to 
        an organization under that subparagraph in any fiscal year--
                    ``(A) shall be equal to the total amount of 
                matching funds from non-Federal sources provided by the 
                organization; and
                    ``(B) shall not exceed $250,000.
            ``(4) Direction.--An organization receiving funds under 
        paragraph (1) shall, in using those funds, direct its 
        activities at one or more of the following:
                    ``(A) Small business concerns located in geographic 
                areas that are underrepresented in the programs under 
                this section.
                    ``(B) Small business concerns owned and controlled 
                by women, small business concerns owned and controlled 
                by service-disabled veterans, and small business 
                concerns owned and controlled by minorities.
                    ``(C) Small business concerns owned and controlled 
                by Native Americans.
                    ``(D) Small business concerns located in geographic 
                areas with an unemployment rate that exceeds the 
                national unemployment rate.
            ``(5) Advisory board.--
                    ``(A) Establishment.--Not later than 90 days after 
                the date of the enactment of this subsection, the 
                Administrator shall establish an advisory board for the 
                activities carried out under this subsection.
                    ``(B) Non-applicability of faca.--The Federal 
                Advisory Committee Act (5 U.S.C. App.) shall not apply 
                to the advisory board.
                    ``(C) Members.--The members of the advisory board 
                shall include the following:
                            ``(i) The Administrator (or the 
                        Administrator's designee).
                            ``(ii) For each Federal agency required by 
                        this section to conduct an SBIR program, the 
                        head of the agency (or the designee of the head 
                        of the agency).
                            ``(iii) Representatives of small business 
                        concerns that are current or former recipients 
                        of SBIR awards, or representatives of 
                        organizations of such concerns.
                            ``(iv) Representatives of service providers 
                        of SBIR outreach and assistance, or 
                        representatives of organizations of such 
                        service providers.
                    ``(D) Duties.--The advisory board shall have the 
                following duties:
                            ``(i) To develop guidelines for awards 
                        under paragraph (1), including guidelines 
                        relating to award sizes, proposal requirements, 
                        measures for monitoring awardee performance, 
                        and measures for determining the overall value 
                        of the activities carried out by the awardees.
                            ``(ii) To identify opportunities for 
                        coordinated outreach, technical assistance, and 
                        commercialization activities among Federal 
                        agencies, the recipients of the awards under 
                        paragraph (1), and applicants and recipients of 
                        SBIR awards, including opportunities such as--
                                    ``(I) podcasting or webcasting for 
                                conferences, training workshops, and 
                                other events;
                                    ``(II) shared online resources to 
                                match prospective applicants with the 
                                network of paragraph (1) recipients; 
                                and
                                    ``(III) venture capital conferences 
                                tied to technologies and sectors that 
                                cross agencies.
                            ``(iii) To review and recommend revisions 
                        to activities under paragraph (1).
                            ``(iv) To submit to the Committee on Small 
                        Business and Entrepreneurship of the Senate and 
                        the Committee on Small Business and the 
                        Committee on Science and Technology of the 
                        House of Representatives an annual report on 
                        the activities carried out under paragraph (1) 
                        and the effectiveness and impact of those 
                        activities.
            ``(6) Selection criteria.--In awarding grants under this 
        subsection, the Administrator shall use selection criteria 
        developed by the advisory board established under paragraph 
        (5). The criteria shall include--
                    ``(A) criteria designed to give preference to 
                applicants who propose to carry out activities that 
                will reach either an underperforming geographic area 
                (including geographic areas with an unemployment rate 
                that exceeds the national unemployment rate) or an 
                underrepresented population group (as measured by the 
                number of SBIR applicants);
                    ``(B) criteria designed to give preference: (i) to 
                applicants serving underrepresented States and regions; 
                and (ii) to applicants who are women-, service-disabled 
                veterans-, or minority-owned.
                    ``(C) criteria designed to give preference to 
                applicants who propose to carry out activities that 
                complement, and are integrated into, the existing 
                public-private innovation support system for the 
                targeted region or population;
                    ``(D) criteria designed to give preference to 
                applicants who propose to measure the effectiveness of 
                the proposed activities; and
                    ``(E) criteria designed to give preference to 
                applicants who include a Small Business Development 
                Center program that is accredited for its technology 
                services.
            ``(7) Peer review.--In awarding grants under this 
        subsection, the Administrator shall use a peer review process. 
        Reviewers shall include--
                    ``(A) SBIR program managers for agencies required 
                by this section to conduct SBIR programs; and
                    ``(B) private individuals and organizations that 
                are knowledgeable about SBIR, the innovation process, 
                technology commercialization, and State and regional 
                technology-based economic development programs.
            ``(8) Per-state limitations.--
                    ``(A) In general.--To be eligible to receive a 
                grant under this subsection, the applicant must have 
                the written endorsement of the Governor of the State 
                where the targeted regions or populations are located 
                (if the regions or populations are located in more than 
                one State, the applicant must have the written 
                endorsement of the Governor of each such State). Such 
                an endorsement must indicate that the Governor will 
                ensure that the activities to be carried out under the 
                grant will be integrated with the balance of the 
                State's portfolio of investments to help small business 
                concerns commercialize technology.
                    ``(B) Limitation.--Each fiscal year, a Governor may 
                have in effect not more than one written endorsement 
                for a grant under paragraph (1)(A), and not more than 
                one written endorsement for a grant under paragraph 
                (1)(B).
            ``(9) Specific requirements for awards.--In making awards 
        under paragraph (1) the Administrator shall ensure that each 
        award shall be for a period of 2 fiscal years. The 
        Administrator shall establish rules and performance goals for 
        the disbursement of funds for the second fiscal year, and funds 
        shall not be disbursed to a recipient for such a fiscal year 
        until after the advisory board established under this 
        subsection has determined that the recipient is in compliance 
        with the rules and performance goals.''.

SEC. 302. PREFERENCES.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(cc) Preferences.--In making awards under this section, Federal 
agencies shall give priority to applications so as to increase the 
number of SBIR and STTR award recipients that are from areas with an 
unemployment rate that exceeds the national unemployment rate, that are 
from rural areas, or that are small business concerns owned and 
controlled by Native Americans. The Administrator shall submit an 
annual report to Congress setting forth how many small business 
concerns owned and controlled by Native Americans were recipients of 
assistance under this section.''.

SEC. 303. OBTAINING SBIR APPLICANT'S CONSENT TO RELEASE CONTACT 
              INFORMATION TO ECONOMIC DEVELOPMENT ORGANIZATIONS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(dd) Consent To Release Contact Information to Organizations.--
            ``(1) Enabling concern to give consent.--Each Federal 
        agency required by this section to conduct an SBIR program 
        shall enable a small business concern that is an SBIR applicant 
        to indicate to the agency whether the agency has its consent 
        to--
                    ``(A) identify the concern to appropriate local and 
                State-level economic development organizations as an 
                SBIR applicant; and
                    ``(B) release the concern's contact information to 
                such organizations.
            ``(2) Rules.--The Administrator shall establish rules to 
        implement this subsection. The rules shall include a 
        requirement that the agency include in its SBIR application 
        forms a provision through which the applicant can indicate 
        consent for purposes of paragraph (1).''.

SEC. 304. INCREASED PARTNERSHIPS BETWEEN SBIR AWARDEES AND PRIME 
              CONTRACTORS, VENTURE CAPITAL INVESTMENT COMPANIES, AND 
              LARGER BUSINESSES.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(ee) Increased Partnerships.--
            ``(1) In general.--Each agency required by this section to 
        conduct an SBIR program shall establish initiatives by which 
        the agency encourages partnerships between SBIR awardees and 
        prime contractors, venture capital investment companies, 
        business incubators, and larger businesses, for the purpose of 
        facilitating the progress of the SBIR awardees to the third 
        phase.
            ``(2) Definition.--In this subsection, the term `business 
        incubator' means an entity that provides coordinated and 
        specialized services to entrepreneurial businesses which meet 
        selected criteria during the businesses' startup phases, 
        including providing services such as shared office space and 
        office services, access to equipment, access to 
        telecommunications and technology services, flexible leases, 
        specialized management assistance, access to financing, 
        mentoring and training services, or other coordinated business 
        or technical support services designed to provide business 
        development assistance to entrepreneurial businesses during 
        these businesses' startup phases.''.

                  TITLE IV--SBIR AND STTR ENHANCEMENT

SEC. 401. INCREASED NUMBER OF RESEARCH TOPIC SOLICITATIONS ANNUALLY AND 
              SHORTENED PERIOD FOR FINAL DECISIONS ON APPLICATIONS.

    (a) Increased Number of Research Topic Solicitations Annually.--
Section 9(g)(2) of the Small Business Act (15 U.S.C. 638(g)(2)) is 
amended by inserting before the semicolon at the end the following: ``, 
but not less often than twice per year''.
    (b) Shortened Period for Final Decisions on Applications.--Section 
9(g)(4) of the Small Business Act (15 U.S.C. 638(g)(4)) is amended by 
inserting before the semicolon at the end the following: ``, but a 
final decision on each proposal shall be rendered not later than 90 
days after the date on which the solicitation closes unless the 
Administrator determines, on a case by case basis, that a decision may 
be extended from 90 days to 180 days''.

SEC. 402. AGENCIES SHOULD FUND VITAL R&D PROJECTS WITH THE POTENTIAL 
              FOR COMMERCIALIZATION.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(ff) Multiple First Phase SBIR Awards Report.--The Administrator 
shall, on an annual basis, submit to the Committee on Small Business 
and the Committee on Science and Technology of the House of 
Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate a list identifying each small business 
concern that, for the period covered by the preceding 5 fiscal years, 
received 15 or more first phase SBIR awards and no second phase SBIR 
awards.''.

SEC. 403. FEDERAL AGENCY ENGAGEMENT WITH SBIR AWARDEES THAT HAVE BEEN 
              AWARDED MULTIPLE PHASE ONE AWARDS BUT HAVE NOT BEEN 
              AWARDED PHASE TWO AWARDS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(gg) Requirements Relating to Federal Agency Engagement With 
Certain First Phase SBIR Awardees.--Each Federal agency required by 
this section to conduct an SBIR program shall engage with SBIR awardees 
that have been awarded multiple first phase SBIR awards but have not 
been awarded any second phase SBIR awards and shall develop performance 
measures with respect to awardee progression in the SBIR program.''.

SEC. 404. FUNDING FOR ADMINISTRATIVE, OVERSIGHT, AND CONTRACT 
              PROCESSING COSTS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(hh) Assistance for Administrative, Oversight, and Contract 
Processing Costs.--
            ``(1) In general.--From amounts made available to carry out 
        this subsection, the Administrator may, on petition by Federal 
        agencies required by this section to conduct an SBIR program, 
        transfer funds to such agencies to assist with the 
        administrative, oversight, and contract processing costs 
        relating to such program.
            ``(2) Petitions.--The Administrator shall establish rules 
        for making transfers under paragraph (1). The initial set of 
        rules shall be promulgated not later than 180 days after the 
        date of the enactment of this subsection.
            ``(3) Limit on transfer.--A Federal agency may not receive 
        under this subsection in a fiscal year an amount greater than 3 
        percent of the SBIR budget of such agency for such fiscal year.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated to the Administrator to carry out this 
        subsection $27,500,000 for each of fiscal years 2010 and 
        2011.''.

SEC. 405. COMPTROLLER GENERAL AUDIT OF HOW FEDERAL AGENCIES CALCULATE 
              EXTRAMURAL RESEARCH BUDGETS.

    The Comptroller General of the United States shall carry out a 
detailed audit of how Federal agencies calculate extramural research 
budgets for purposes of calculating the size of the agencies' Small 
Business Innovation Research Program and Small Business Technology 
Transfer Program budgets. Not later than 1 year after the date of the 
enactment of this Act, the Comptroller General shall submit to the 
Committee on Small Business and the Committee on Science and Technology 
of the House of Representatives and the Committee on Small Business and 
Entrepreneurship of the Senate a report on the results of the audit.

SEC. 406. AGENCY DATABASES TO SUPPORT PROGRAM EVALUATION.

    Section 9(k) of the Small Business Act (15 U.S.C. 638(k)) is 
amended--
            (1) in paragraph (2)(A)--
                    (A) by striking ``and'' at the end of clause (ii);
                    (B) by inserting ``and'' at the end of clause 
                (iii); and
                    (C) by adding at the end the following new clause:
                            ``(iv) information on the ownership 
                        structure of award recipients, both at the time 
                        of receipt of the award and upon completion of 
                        the award period;'';
            (2) by amending paragraph (3) to read as follows:
            ``(3) Updating information for database.--
                    ``(A) In general.--A Federal agency shall not make 
                a Phase I or Phase II payment to a small business 
                concern under this section unless the small business 
                concern has provided all information required under 
                this subsection and available at the time with respect 
                to the award under which the payment is made, and with 
                respect to any other award under this section 
                previously received by the small business concern or a 
                predecessor in interest to the small business concern.
                    ``(B) Apportionment.--In complying with this 
                paragraph, a small business concern may apportion sales 
                or additional investment information relating to more 
                than one second phase award among those awards, if it 
                notes the apportionment for each award.
                    ``(C) Annual updates upon termination.--A small 
                business concern receiving an award under this section 
                shall--
                            ``(i) in the case of a second phase award, 
                        update information in the databases required 
                        under paragraphs (2) and (6) concerning that 
                        award at the termination of the award period;
                            ``(ii) in the case of award recipients not 
                        described in clause (iii), be requested to 
                        voluntarily update such information annually 
                        thereafter for a period of 5 years; and
                            ``(iii) in the case of a small business 
                        concern applying for a subsequent first phase 
                        or second phase award, be required to update 
                        such information annually thereafter for a 
                        period of 5 years.''; and
            (3) by adding at the end the following new paragraph:
            ``(6) Agency program evaluation databases.--Each Federal 
        agency required to establish an SBIR or STTR program under this 
        section shall develop and maintain, for the purpose of 
        evaluating such programs, a database containing information 
        required to be contained in the database under paragraph (2). 
        Each such database shall be designed to be accessible to other 
        agencies that are required to maintain a database under this 
        paragraph. Each such database shall be developed and operated 
        in a manner to ensure that each such database is relevant to 
        and contributes to the agency's oversight and evaluation of the 
        SBIR and STTR programs. Paragraphs (4) and (5) apply to each 
        database under this paragraph.''.

SEC. 407. AGENCY DATABASES TO SUPPORT TECHNOLOGY UTILIZATION.

    Section 9(k) of the Small Business Act (15 U.S.C. 638(k)), as 
amended, is further amended by adding at the end the following new 
paragraph:
            ``(7) Agency databases to support technology utilization.--
        Each Federal agency with an SBIR or STTR program shall create 
        and maintain a technology utilization database, which shall be 
        available to the public and shall contain data supplied by the 
        award recipients specifically to help them attract customers 
        for the products and services generated under the SBIR or STTR 
        project, and to attract additional investors and business 
        partners. Each database created under this paragraph shall 
        include information on the other databases created under this 
        paragraph by other Federal agencies. Participation in a 
        database under this paragraph shall be voluntary, except that 
        such participation is required of all award recipients who 
        received supplemental payments from SBIR and STTR program funds 
        above their initial Phase II award. Each database created under 
        this paragraph shall be developed and operated in a manner to 
        ensure that each such database is relevant to and contributes 
        to the agency's oversight and evaluation of the SBIR and STTR 
        programs.''.

SEC. 408. INTERAGENCY POLICY COMMITTEE.

    (a) Establishment.--The Director of the Office of Science and 
Technology Policy shall establish an Interagency SBIR/STTR Policy 
Committee comprised of one representative from each Federal agency with 
an SBIR program and the Office of Management and Budget.
    (b) Cochairs.--The Director of the Office of Science and Technology 
Policy and the Director of the National Institute of Standards and 
Technology shall jointly chair the Interagency SBIR/STTR Policy 
Committee.
    (c) Duties.--The Interagency SBIR/STTR Policy Committee shall 
review the following issues and make policy recommendations on ways to 
improve program effectiveness and efficiency:
            (1) The public and government databases described in 
        section 9(k) (1) and (2) of the Small Business Act (15 U.S.C. 
        638(k) (1) and (2)).
            (2) Federal agency flexibility in establishing Phase I and 
        II award sizes, and appropriate criteria to exercise such 
        flexibility.
            (3) Commercialization assistance best practices in Federal 
        agencies with significant potential to be employed by other 
        agencies, and the appropriate steps to achieve that leverage, 
        as well as proposals for new initiatives to address funding 
        gaps business concerns face after Phase II but before 
        commercialization.
            (4) Development and incorporation of a standard evaluation 
        framework to enable systematic assessment of SBIR and STTR, 
        including through improved tracking of awards and outcomes and 
        development of performance measures for individual agency 
        programs.
    (d) Reports.--The Interagency SBIR/STTR Policy Committee shall 
transmit to the Committee on Science 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--
            (1) a report on its review and recommendations under 
        subsections (c)(1) and (c)(4) not later than 1 year after the 
        date of enactment of this Act;
            (2) a report on its review and recommendations under 
        subsection (c)(2) not later than 18 months after the date of 
        enactment of this Act; and
            (3) a report on its review and recommendations under 
        subsection (c)(3) not later than 2 years after the date of 
        enactment of this Act.

SEC. 409. NATIONAL RESEARCH COUNCIL SBIR STUDY.

    Section 108(d) of the Small Business Reauthorization Act of 2000 
(15 U.S.C. 638 note), enacted into law by reference under section 
1(a)(9) of the Consolidated Appropriations Act, 2001 (Public Law 106-
554), is amended--
            (1) by striking ``of the Senate'' and all that follows 
        through ``not later than 3'' and inserting ``of the Senate, not 
        later than 3''; and
            (2) by striking ``; and'' and all that follows through 
        ``update of such report''.

SEC. 410. EXPRESS AUTHORITY TO ``FAST-TRACK'' PHASE TWO AWARDS FOR 
              PROMISING PHASE ONE RESEARCH.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(ii) Authority To `Fast-track' Phase Two Awards for Promising 
Phase One Research.--To address the delay between an award for the 
first phase of an SBIR program and the application for and extension of 
an award for the second phase of such program, each Federal agency with 
an SBIR program may develop `fast-track' programs to eliminate such 
delay by issuing second phase SBIR awards as soon as practicable, 
including in appropriate cases simultaneously with the issuance of the 
first phase SBIR award. The Administrator shall encourage the 
development of such `fast-track' programs.''.

SEC. 411. INCREASED SBIR AND STTR AWARD LEVELS.

    (a) SBIR Award Level and Annual Adjustments.--Section 9(j) of the 
Small Business Act (15 U.S.C. 638(j)) is amended by adding at the end 
the following:
    ``(4) Further Additional Modifications.--Not later than 180 days 
after the date of enactment of this paragraph and notwithstanding 
paragraph (2)(D), the Administrator shall modify the policy directives 
issued pursuant to this subsection to provide for an increase to 
$250,000 in the amount of funds which an agency may award in the first 
phase of an SBIR program, and to $2,000,000 in the second phase of an 
SBIR program, and a mandatory annual adjustment of such amounts to 
reflect economic adjustments and programmatic considerations.''.
    (b) STTR Award Level and Annual Adjustments.--Section 
9(p)(2)(B)(ix) of the Small Business Act (15 U.S.C. 638(p)(2)(B)(ix)) 
is amended--
            (1) by striking ``$100,000'' and ``$750,000'' and inserting 
        ``$250,000'' and ``$2,000,000'', respectively; and
            (2) by striking ``greater or lesser amounts'' and inserting 
        ``with a mandatory annual adjustment of such amounts to reflect 
        economic adjustments and programmatic considerations, and with 
        lesser amounts''.
    (c) Limitation on Certain Awards.--Section 9 of the Small Business 
Act (15 U.S.C. 638), as amended, is further amended by adding at the 
end the following:
    ``(jj) Limitation on Phase I and II Awards.--No Federal agency 
shall issue an award under the SBIR program or the STTR program if the 
size of the award exceeds the amounts established under subsections 
(j)(4) and (p)(2)(B)(ix).''.

SEC. 412. EXPRESS AUTHORITY FOR AN AGENCY TO AWARD SEQUENTIAL PHASE TWO 
              AWARDS FOR SBIR-FUNDED PROJECTS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(kk) Requirements Relating to Additional Second Phase SBIR 
Awards.--
            ``(1) In general.--A small business concern that receives a 
        second phase SBIR award for a project remains eligible to 
        receive additional second phase SBIR awards for such project.
            ``(2) Technical or weapons systems.--Agencies are expressly 
        authorized to provide additional second phase SBIR awards for 
        testing and evaluation assistance for the insertion of SBIR 
        technologies into technical or weapons systems.''.

SEC. 413. FIRST PHASE REQUIRED.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(ll) First Phase Required.--Under this section, a Federal agency 
shall provide to a small business concern an award for the second phase 
of an SBIR program with respect to a project only if such agency finds 
that the small business concern has been provided an award for the 
first phase of an SBIR program with respect to such project or has 
completed the determinations described in subsection (e)(4)(A) with 
respect to such project despite not having been provided an award for 
the first phase.''.

SEC. 414. INVOLVEMENT OF CHIEF COUNSEL FOR ADVOCACY.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(mm) Involvement of Chief Counsel for Advocacy.--The Chief 
Counsel for Advocacy, as described in section 201 of Public Law 94-305 
(15 U.S.C. 634a), and any individual reporting to the Chief Counsel for 
Advocacy, without regard to whether such individual was hired under 
section 204 of Public Law 94-305 (15 U.S.C. 634d), may not provide to 
the Administrator, to any individual who reports directly or indirectly 
to the Administrator, or to any Federal agency any advice, guidance, 
oversight, or review with respect to the programs authorized under this 
section.''.

SEC. 415. MINORITY INSTITUTION PROGRAM.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(nn) Minority Institution Program.--
            ``(1) Establishment.--From amounts made available to carry 
        out this subsection, the Administrator shall establish and 
        carry out a program to make grants to minority institutions 
        that partner with nonprofit organizations that have experience 
        developing relationships between industry, minority 
        institutions, and other entities, for the purpose of increasing 
        the number of SBIR and STTR program applications by minority-
        owned small businesses.
            ``(2) Application.--To be eligible to receive a grant under 
        paragraph (1), a minority institution shall submit an 
        application to the Administrator at such time, in such manner, 
        and containing such information and assurances as the 
        Administrator may require.
            ``(3) Matching requirement.--As a condition of a grant 
        under paragraph (1), the Administrator shall require that a 
        minority institution provide a matching amount from a source 
        other than the Federal Government that is equal to the amount 
        of the grant.
            ``(4) Minority institution defined.--In this subsection, 
        the term `minority institution' has the meaning given that term 
        in section 365(3) of the Higher Education Act of 1965 (20 
        U.S.C. 1067k(3)).
            ``(5) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $4,000,000 for 
        each of fiscal years 2010 and 2011.''.

SEC. 416. AREAS THAT HAVE LOST A MAJOR SOURCE OF EMPLOYMENT.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(oo) Areas That Have Lost a Major Source of Employment.--In 
making awards under this section, Federal agencies shall give priority 
to applications so as to increase the number of SBIR and STTR award 
recipients from geographic areas determined by the Administrator to 
have lost a major source of employment.''.

SEC. 417. ENHANCING VETERAN PARTICIPATION IN SBIR.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(pp) Enhancing Veteran Participation in SBIR.--Notwithstanding 
any other provision of this section, a small business concern owned and 
controlled by veterans may--
            ``(1) receive an award in the amount of $300,000 in the 
        first phase of an SBIR program and in the amount of $2,250,000 
        in the second phase of an SBIR program, with such amounts able 
        to be exceeded if the Federal agency making the award notifies 
        the Administrator of such excess; and
            ``(2) receive an award for the second phase of an SBIR 
        program with respect to a project without having received a 
        first phase award with respect to such project.''.

SEC. 418. VETERAN PREFERENCE.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended, is 
further amended by adding at the end the following:
    ``(qq) Veteran Preference.--In making awards under this section, 
Federal agencies shall give priority to applications so as to increase 
the number of SBIR and STTR award recipients that are small business 
concerns owned and controlled by veterans.''.

SEC. 419. MEDICAL TECHNOLOGY.

    Section 9(g)(3) of the Small Business Act (15 U.S.C. 638(g)(3)), as 
amended, is further amended in the matter preceding subparagraph (A) by 
inserting after ``broad research topics'' the following: ``and research 
topics relating to medical technology''.

        TITLE V--IMPROVING WATER USE AND TRANSMISSION TECHNOLOGY

SEC. 501. IMPROVING WATER USE AND TRANSMISSION TECHNOLOGY.

    Not later than 1 year after the date of the enactment of this Act, 
Federal agencies with an SBIR program, as appropriate, shall jointly 
develop and issue a small business innovation research solicitation 
that requests research proposals with respect to improving the 
efficiency of water delivery systems and usage patterns in the United 
States and its territories through the use of technology.

 TITLE VI--GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING COMPANY 
                              INVOLVEMENT

SEC. 601. GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING COMPANY 
              INVOLVEMENT.

    The Comptroller General of the United States shall carry out a 
study of the impact of requirements relating to venture capital 
operating company involvement under section 9(aa) of the Small Business 
Act, as added by section 102 of this Act. Not later than 1 year after 
the date of the enactment of this Act, the Comptroller General shall 
submit to Congress a report on the results of the study.

            Passed the House of Representatives July 8, 2009.

            Attest:

                                                                 Clerk.
111th CONGRESS

  1st Session

                               H. R. 2965

_______________________________________________________________________

                                 AN ACT

  To amend the Small Business Act with respect to the Small Business 
Innovation Research Program and the Small Business Technology Transfer 
                    Program, and for other purposes.
```