H.R. 2763 Text - Reported in House - 115th Congress (2017-2018)

Union Calendar No. 223

115th CONGRESS
1st Session

H. R. 2763

[Report No. 115–313, Parts I and II]

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

May 30, 2017

Mr. Knight (for himself and Mrs. Murphy of Florida) 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

September 14, 2017

Additional sponsor: Miss González-Colón of Puerto Rico

September 14, 2017

Reported from the Committee on Small Business with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

September 14, 2017

Reported from the Committee on Science, Space, and Technology with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

[Strike out all after the enacting clause and insert the part printed in boldface roman]

[For text of introduced bill, see copy of bill as introduced on May 30, 2017]

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.

This Act may be cited as the “Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017”.

SEC. 2. 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. 3. 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. 4. 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 2018 through 2022, all agencies participating in the SBIR program may provide”.

SEC. 5. 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. 6. Extension of deadline for assistance for administrative, oversight, and contract processing costs.

Section 9(mm)(1) of the Small Business Act (15 U.S.C. 638(mm)(1)) is amended by striking “September 30, 2017” and inserting “September 30, 2022”.

SEC. 7. Increased underserved population participation waiver removed.

(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)”.

SEC. 8. Annual meeting.

(a) In general.—Section 9 of the Small Business Act (15 U.S.C. 638) is amended by adding at the end the following new subsection:

“(tt) 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 this Act, is further 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 (tt).”.

SEC. 9. 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 striking “, including sole source awards,” and inserting “as direct follow-on awards issued without further competition”.

SEC. 10. Commercialization assistance pilot programs.

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by section 8, is further amended by adding at the end the following new subsection:

“(uu) 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, 2022.

“(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. 11. 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 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 “; and”; 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) 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).”.

(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) 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 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. 12. Improvements to technical and business assistance in the SBIR and STTR programs.

Section 9(q) of the Small Business Act (15 U.S.C. 638(q)) is amended—

(1) in the subsection heading, by inserting “and business” after “technical”;

(2) in paragraph (1)—

(A) in the matter preceding subparagraph (A)—

(i) by striking “a vendor selected under paragraph (2)” and inserting “1 or more vendors selected under paragraph (2)(A)”;

(ii) by inserting “and business” before “assistance services”; and

(iii) by inserting “assistance with product sales, intellectual property protections, market research, market validation, and development of regulatory plans and manufacturing plans,” after “technologies,”; and

(B) in subparagraph (D), by inserting “, including intellectual property protections” before the period at the end;

(3) in paragraph (2)—

(A) by striking “Each agency may select a vendor to assist small business concerns to meet” and inserting the following:

“(A) IN GENERAL.—Each agency may select 1 or more vendors from which small business concerns may obtain assistance in meeting”; and

(B) by adding at the end the following:

“(B) SELECTION BY SMALL BUSINESS CONCERN.—A small business concern may, by contract or otherwise, select 1 or more vendors to assist the small business concern in meeting the goals listed in paragraph (1).”; and

(4) in paragraph (3)—

(A) by inserting “(A)” after “paragraph (2)” each place it appears;

(B) in subparagraph (A), by striking “$5,000 per year” each place it appears and inserting “$6,500 per project”;

(C) in subparagraph (B)—

(i) by striking “$5,000 per year” each place it appears and inserting “$35,000 per project”; and

(ii) in clause (ii), by striking “which shall be in addition to the amount of the recipient's award” and inserting “which may, as determined appropriate by the head of the agency, be included as part of the recipient's award or be in addition to the amount of the recipient's award”;

(D) in subparagraph (C)—

(i) by inserting “or business” after “technical”;

(ii) by striking “the vendor” and inserting “a vendor”; and

(iii) by adding at the end the following: “Business-related services aimed at improving the commercialization success of a small business concern may be obtained from an entity, such as a public or private organization or an agency of or other entity established or funded by a State that facilitates or accelerates the commercialization of technologies or assists in the creation and growth of private enterprises that are commercializing technology.”;

(E) in subparagraph (D)—

(i) by inserting “or business” after “technical” each place it appears; and

(ii) in clause (i), by striking “the vendor” and inserting “1 or more vendors”; and

(F) by adding at the end the following:

“(E) MULTIPLE AWARD RECIPIENTS.—The Administrator shall establish a limit on the amount of technical and business assistance services that may be received or purchased under subparagraph (B) by a small business concern that has received multiple Phase II SBIR or STTR awards for a fiscal year.”.

SEC. 13. 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).”.

SECTION 1. SHORT TITLE.

This Act may be cited as the “Small Business Innovation Research and Small Business Technology Transfer Improvements Act of 2017”.

SEC. 2. REPORTING REQUIREMENTS.

SEC. 3. 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. 4. SBIR PHASE FLEXIBILITY.

SEC. 5. 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”;

(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

SEC. 6. EXTENSION OF DEADLINE FOR ASSISTANCE FOR ADMINISTRATIVE, OVERSIGHT, AND CONTRACT PROCESSING COSTS.

Section 9(mm)(1) of the Small Business Act (15 U.S.C. 638(mm)(1)) is amended by striking “September 30, 2017” and inserting “September 30, 2022”.

SEC. 7. IMPROVEMENTS TO TECHNICAL AND BUSINESS ASSISTANCE IN THE SBIR AND STTR PROGRAMS.

Section 9(q) of the Small Business Act (15 U.S.C. 638(q)) is amended—

(1) in the subsection heading, by inserting “and Business” after “Technical”;

(4) in paragraph (3)—

(A) by inserting “(A)” after “paragraph (2)” each place it appears;

(B) in subparagraph (A), by striking “$5,000 per year” each place it appears and inserting “$6,500 per project”;

(C) in subparagraph (B)—

(i) by striking “$5,000 per year” each place it appears and inserting “$35,000 per project”; and

(ii) in clause (ii), by striking “which shall be in addition to the amount of the recipient's award” and inserting “which may, as determined appropriate by the head of the agency, be included as part of the recipient's award or be in addition to the amount of the recipient's award”;

(D) in subparagraph (C)—

(i) by inserting “or business” after “technical”;

(ii) by striking “the vendor” and inserting “a vendor”; and

(iii) by adding at the end the following: “Business-related services may be obtained from an entity, such as a public or private organization or an agency of or other entity established or funded by a State, that facilitates or accelerates the commercialization of technologies or assists in the creation and growth of private enterprises that are commercializing technology.”;

(E) in subparagraph (D)—

(i) by inserting “or business” after “technical” each place it appears; and

(ii) in clause (i)—

(I) by striking “the vendor” and inserting “1 or more vendors”; and

(II) by striking “provides” and inserting “provide”; and

(F) by adding at the end the following:

“(E) MULTIPLE AWARD RECIPIENTS.—The Administrator shall establish a limit on the amount of technical and business assistance services that may be received or purchased under subparagraph (B) by a small business concern that has received multiple Phase II SBIR or STTR awards for a fiscal year.”.

SEC. 8. 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

SEC. 9. CONTINGENT LIMITATION ON USE OF CERTAIN FUNDS PENDING SUBMISSION OF REPORT.

(a) Report deadline.—The Administrator of the Small Business Administration shall submit the annual report required under section 9(b)(7) of the Small Business Act (15 U.S.C. 638(b)(7)) not later than the last day of each calendar year.

(b) Prohibition on availability of funds for failure to submit report.—If the Administrator does not meet the deadline for submission under subsection (a) with respect to a calendar year, no funds authorized to be appropriated or otherwise made available to the Small Business Administration by this Act, or any other Act, may be obligated or expended for travel by the Administrator for the following calendar year until such time as the Administrator submits the report described under subsection (a).

SEC. 10. 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:

“(tt) 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 that are engaged 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. 11. ENCOURAGING INNOVATION IN CYBERSECURITY.

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by section 10 of this Act, is further amended by adding at the end the following:

“(uu) 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 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. 12. INNOVATIVE APPROACHES TO TECHNOLOGY TRANSFER.

Section 9(jj) of the Small Business Act (15 U.S.C. 638(jj)) is amended to read as follows:

“(jj) Innovative approaches to technology transfer.—

“(1) Grant program.—

“(A) IN GENERAL.—Each Federal agency required by subsection (n) to establish an STTR program shall carry out an Innovative Approaches to Technology Transfer Grant Program (hereinafter referred to as a ‘Program’) to support innovative approaches to technology transfer at institutions of higher education (as defined in section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a)), nonprofit research institutions, and Federal laboratories in order to accelerate the commercialization of federally funded research and technology by small business concerns, including new businesses.

“(B) AWARDING OF GRANTS TO QUALIFYING INSTITUTIONS.—

“(i) IN GENERAL.—Each Federal agency described in subparagraph (A) shall provide grants, through a competitive, merit-based process, in the amounts listed in subparagraph (C)(i) to institutions of higher education, technology transfer organizations that facilitate the commercialization of technologies developed by one or more such institutions of higher education, Federal laboratories, other public and private nonprofit entities, and consortia thereof, for initiatives that help identify high-quality, commercially viable federally funded research and technologies and to facilitate and accelerate their transfer into the marketplace.

“(ii) SELECTION PROCESS AND APPLICATIONS.—Qualifying institutions seeking a grant under this subsection shall submit an application to a Federal agency described in subparagraph (A) at such time, in such manner, and containing such information as the agency may require. The application shall include, at a minimum—

“(I) a description of innovative approaches to technology transfer, technology development, and commercial readiness that have the potential to increase or accelerate technology transfer outcomes and can be adopted by other qualifying institutions, or a demonstration of proven technology transfer and commercialization strategies, or a plan to implement proven technology transfer and commercialization strategies, that can achieve greater commercialization of federally funded research and technologies with Program funding;

“(II) a description of how the qualifying institution will contribute to local and regional economic development efforts; and

“(III) a plan for sustainability beyond the duration of the funding award.

“(iii) USE OF FUNDS.—Activities supported by grants under this subsection may include—

“(I) providing early-stage proof of concept funding for translational research;

“(II) identifying research and technologies at recipient institutions that have the potential for accelerated commercialization;

“(III) technology maturation funding to support activities such as prototype construction, experiment analysis, product comparison, and collecting performance data;

“(IV) technical validations, market research, clarifying intellectual property rights position and strategy, and investigating commercial and business opportunities; and

“(V) programs to provide advice, mentoring, entrepreneurial education, project management, and technology and business development expertise to innovators and recipients of technology transfer licenses to maximize commercialization potential.

“(iv) PROGRAM OVERSIGHT BOARD.—

“(I) IN GENERAL.—Successful applications required under clause (ii) shall include a plan to assemble a Program Oversight Board, the members of which shall have technical, scientific, or business expertise and shall be drawn from industry, start-up companies, venture capital, technical enterprises, financial institutions, and business development organizations.

“(II) PROJECT AWARDS.—A Program Oversight Board shall—

“(aa) establish award programs for individual projects;

“(bb) provide rigorous evaluation of project applications;

“(cc) determine which projects should receive awards, in accordance with guidelines established by the Board;

“(dd) establish milestones and associated award amounts for projects that reach milestones;

“(ee) determine whether awarded projects are reaching milestones; and

“(ff) develop a process to reallocate outstanding award amounts from projects that are not reaching milestones to other projects with more potential.

“(C) GRANT AND AWARD AMOUNTS.—

“(i) GRANT AMOUNTS.—Each Federal agency described in subparagraph (A) may make grants under subparagraph (B) to qualifying institutions for up to $1,000,000 per year for up to 3 years.

“(ii) AWARD AMOUNTS.—Each qualifying institution that receives a grant under subparagraph (B) shall provide awards for individual projects of not more than $150,000, to be provided in phased amounts, based on reaching the milestones established by the qualifying institution’s Program Oversight Board.

“(D) AUTHORIZED EXPENDITURES FOR THE PROGRAM.—

“(i) PERCENTAGE.—The percentage of the extramural budget that each Federal agency described under subparagraph (A) expends on a Program shall be—

“(I) 0.05 percent for each of fiscal years 2018 and 2019; and

“(II) 0.1 percent for each of fiscal years 2020 and 2021.

“(ii) TREATMENT OF EXPENDITURES.—Any portion of the extramural budget expended by a Federal agency on a Program shall apply towards the agency’s expenditure requirements under subsection (n).

“(2) Program evaluation and data collection and dissemination.—

“(A) EVALUATION PLAN AND DATA COLLECTION.—Each Federal agency required by paragraph (1)(A) to establish a Program shall develop a program evaluation plan and collect, annually, such information from grantees as is necessary to assess the Program. Program evaluation plans shall require the collection of data aimed at identifying outcomes resulting from the transfer of technology with assistance from the Program, such as—

“(i) specific follow-on funding identified or obtained, including follow-on funding sources, such as Federal sources or private sources;

“(ii) the number of projects which result in a license to a start-up company or an established company with sufficient resources for effective commercialization within 5 years of receiving an award under paragraph (1)(C)(ii);

“(iii) invention disclosures and patents;

“(iv) the number of projects supported by qualifying institutions receiving a grant under paragraph (1)(C)(i) that secure Phase I or Phase II SBIR or STTR awards;

“(v) available information on revenue, sales, or other measures of products that have been commercialized as a result of projects awarded under paragraph (1)(C)(ii);

“(vi) the number and location of jobs created resulting from projects awarded under paragraph (1)(C)(ii); and

“(vii) other data as considered appropriate by a Federal agency required by this subparagraph to develop a program evaluation plan.

“(B) EVALUATIVE REPORT TO CONGRESS.—The head of each Federal agency that has a Program 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 an evaluative report regarding the activities of the Program. The report shall include—

“(i) a detailed description of the implementation of the Program;

“(ii) a detailed description of the grantee selection process;

“(iii) an accounting of the funds used in the Program; and

“(iv) a summary of the data collected under subparagraph (A).

“(C) DATA DISSEMINATION.—For purposes of Program transparency and dissemination of best practices, the Administrator shall include, on the public database under subsection (k)(1), information on the Program, including—

“(i) the program evaluation plan required under subparagraph (A);

“(ii) a list of recipients of awards under paragraph (1)(C)(ii); and

“(iii) information on the use of grants under paragraph (1)(C)(i) by recipient institutions.”.

Union Calendar No. 223

115th CONGRESS
1st Session

H. R. 2763

[Report No. 115–313, Parts I and II]

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.

September 14, 2017

Reported from the Committee on Small Business with an amendment

September 14, 2017

Reported from the Committee on Science, Space, and Technology with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed