Title: Encouraging Small Business Innovation Act
Policy area: Commerce

Summary:
Encouraging Small Business Innovation Act
This bill expands and otherwise revises certain requirements for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs. Specifically, it includes small business investment companies (SBICs) in such programs.
SBICs are included as a type of investor whose investment must be considered for various purposes under the programs.
The bill requires the Small Business Administration (SBA), when calculating the outstanding leverage of an SBIC, to exclude investments made in SBIR and STTR participants. Under current law, SBICs are subject to a limit on their outstanding leverage.
Finally, the bill (1) encourages participation in the SBA mentor-protege program by past small business SBIR and STTR program participants and (2) sets forth provisions to increase participation of states to which a low level of SBIR awards have historically been awarded.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 206 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 206

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 3, 2019

  Mr. Rouda 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 laws to create certain requirements with 
     respect to the SBIR and STTR 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.

    This Act may be cited as the ``Encouraging Small Business 
Innovation Act''.

SEC. 2. INCLUSION OF TESTING AND EVALUATION IN THE DEFINITION OF 
              RESEARCH AND DEVELOPMENT.

    Section 9(e)(5) of the Small Business Act (15 U.S.C. 638(e)(5)) is 
amended--
            (1) by redesignating subparagraphs (A), (B), and (C) as 
        clauses (i), (ii), and (iii), respectively (and conforming the 
        margins accordingly);
            (2) by striking ``means any activity which is'' and 
        inserting the following: ``means--
                    ``(A) any activity which is--''; and
            (3) in clause (iii), as so redesignated, by adding ``and'' 
        after the semicolon at the end; and
            (4) by adding at the end the following new subparagraph:
                    ``(B) any testing or evaluation in connection with 
                such an activity;''.

SEC. 3. INCLUSION OF SMALL BUSINESS INVESTMENT COMPANIES IN SBIR AND 
              STTR.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended--
            (1) by striking ``or private equity firm investment'' each 
        place such term appears and inserting ``private equity firm, or 
        SBIC investment'';
            (2) by striking ``or private equity firms'' and inserting 
        ``private equity firms, or SBICs'';
            (3) in subsection (e)--
                    (A) in paragraph (12)(B), by striking ``and'' at 
                the end;
                    (B) in paragraph (13)(B), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(14) the term `SBIC' means a small business investment 
        company as defined in section 103 of the Small Business 
        Investment Act of 1958.''; and
            (4) in the heading for subsection (dd), by striking ``or 
        Private Equity Firms'' and inserting ``Private Equity Firms, or 
        SBICs''.

SEC. 4. CALCULATION OF LEVERAGE OF SMALL BUSINESS INVESTMENT COMPANIES 
              THAT INVEST IN SBIR OR STTR PARTICIPANTS.

    Section 303(b)(2) of the Small Business Investment Act of 1958 (15 
U.S.C. 683(b)(2)) is amended by adding at the end the following new 
subparagraph:
                    ``(E) Investments in sbir and sttr participants.--
                            ``(i) In general.--Subject to clause (ii), 
                        in calculating the outstanding leverage of a 
                        company for purposes of subparagraph (A), the 
                        Administrator shall exclude the amount of any 
                        investment made in a SBIR or STTR participant, 
                        if such investment is made in the first fiscal 
                        year after the date of enactment of this 
                        subparagraph or any fiscal year thereafter by a 
                        company licensed during the applicable fiscal 
                        year.
                            ``(ii) Limitations.--
                                    ``(I) Amount of exclusion.--The 
                                amount excluded under clause (i) for a 
                                company shall not exceed 33 percent of 
                                the private capital of that company.
                                    ``(II) Maximum investment.--A 
                                company shall not make an investment in 
                                any one SBIR or STTR participant in an 
                                amount equal to more than 20 percent of 
                                the private capital of that company.
                                    ``(III) Other terms.--The exclusion 
                                of amounts under clause (i) shall be 
                                subject to such terms as the 
                                Administrator may impose to ensure that 
                                there is no cost (as that term is 
                                defined in section 502 of the Federal 
                                Credit Reform Act of 1990 (2 U.S.C. 
                                661a)) with respect to purchasing or 
                                guaranteeing any debenture involved.
                            ``(iii) Definitions.--In this subparagraph, 
                        the term `SBIR or STTR participant' means a 
                        small business concern that receives contracts 
                        or grants pursuant to section 9 of the Small 
                        Business Act.''.

SEC. 5. ENCOURAGING PARTICIPATION IN THE MENTOR-PROTEGE PROGRAM.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended by 
adding at the end the following:
    ``(tt) Encouraging Participation in the Mentor-Protege Program.--
The Administrator shall provide an increase to the past performance 
rating of any small business concern that has participated in the SBIR 
or STTR program that serves as a mentor under section 45 to a small 
business concern that seeks to participate in the SBIR or STTR 
program.''.

SEC. 6. ANNUAL MEETING FOR FEDERAL AGENCIES WITH A SBIR OR STTR 
              PROGRAM.

    (a) In General.--Section 9 of the Small Business Act (15 U.S.C. 
638), as amended by section 3, is further amended by adding at the end 
the following new subsection:
    ``(uu) 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 
                under this section.
            ``(2) Reporting.--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)) 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 ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(K) the annual meeting required under subsection 
                (uu).''.

SEC. 7. INCREASING PARTICIPATION OF UNDERSERVED POPULATIONS IN THE SBIR 
              AND STTR PROGRAMS.

    (a) In General.--Section 9(mm)(2) of the Small Business Act (15 
U.S.C. 638(mm)(2)) is amended to read as follows:
            ``(2) Outreach and technical assistance.--A Federal agency 
        participating in the program under this subsection shall use a 
        portion of the funds authorized for uses under paragraph (1) to 
        carry out the policy directive required under subsection 
        (j)(2)(F) and to increase the participation of States with 
        respect to which a low level of SBIR awards have historically 
        been awarded.''.
    (b) Conforming Amendment.--Section 9(mm)(6) of the Small Business 
Act (15 U.S.C. 638(mm)(6)) is amended by striking ``paragraph (2)(A) 
and any use of the waiver authority under paragraph (2)(B)'' and 
inserting ``paragraph (2)''.
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