Congress Passes Bill to Temporarily Extend SBIR Program

Earlier this week, both the U.S. House of Representatives and Senate passed a bill to temporarily extend the Small Business Innovation Research (SBIR) program.  The program, which was enacted in 1982, then reauthorized in 1986, 1992, and 2000, was set to expire September 30, 2008.  This deadline was extended six months and was set to expire today, March 20, 2009.  The new bill temporarily extends the program through July 31, 2009.  

The SBIR program stipulates that a small portion (currently 2.5 percent) of federal research and development funding be channeled to smaller firms with fewer than 500 employees.  The SBIR program is credited with generating more than 84,000 patents and millions of jobs in its 26-year history.  In fiscal year 2006, approximately $2 billion in SBIR awards were received by small companies.

 At the heart of the dispute holding up the reauthorization of the bill are issues of whether venture capital backed firms should be eligible for SBIR funding.  Currently companies that are majority owned by venture capital firms are ineligible for SBIR awards.  However, changing this provision is seen as critical particularly in supporting small biotech companies which are often forced to turn to venture capitalists because of the time and costs associated with bringing new drugs and medical innovations to market.  

 Mary Landrieu, D-La, chair of the Senate Committee on Small Business Entrepreneurship and Ranking Member Olympia Snowe, R-Ma, have vowed to work together to pass a bipartisan, long-term reauthorization bill for the program.

For more details, see the release from The U.S. Senate:  http://sbc.senate.gov/press/record.cfm?id=309961&

Or read more about it from the Ewing Marion Kauffman Foundation:  http://www.entrepreneurship.org/Resources/Detail/Default.aspx?id=19048