Washington, D.C. –  The Research and Technology Subcommittee today held a hearing to consider the results and impacts of the Small Business Innovation Research Act (SBIR) and the Small Business Technology Transfer (STTR) programs. The current authorization for the SBIR and STTR programs expires in September 2017. Today’s hearing was the first step in conducting oversight of the programs and making sure taxpayer dollars are being well spent.

SBIR was signed into law by President Ronald Reagan in 1982 to spur innovation and increase small business participation in federal research and development activity. STTR, which requires a small business to collaborate with a non-profit research institution, was enacted in 1992 to bridge the gap between basic science and commercialization of resulting innovations.

Research and Technology Subcommittee Chairwoman Barbara Comstock (R-Va.): “Converting scientific breakthroughs into innovations creates new industries, new businesses, and new jobs.  Such innovation transforms commerce, everyday life and our entire society. Risk-taking entrepreneurs and small businesses are the catalysts for innovation.   They are the catalysts for economic growth, for generating the family and community sustaining jobs that we need so badly.”

Chairman Lamar Smith (R-Texas): “SBIR and STTR companies have created parts for NASA’s Mars Rover, equipped our military men and women with key war-fighting innovations, and generated a long list of life-saving medicines and health care treatments. SBIR and STTR recipients have thousands of new patents and created thousands of new jobs, many in new areas of technology.

“There are still ways to improve SBIR and STTR and assure taxpayers are getting the greatest return for the investments of their hard-earned dollars.”

Both the SBIR and STTR programs are funded through a “tax” on federal agencies with large research budgets. Agencies with research budgets exceeding $100 million per year are required to set aside three percent of their budgets to support SBIR. That is 15 times more than the initial tax in 1982. Agencies with research budgets surpassing $1 billion per year are required to set aside 0.45% of their budget for STTR grants.

Today’s hearing considered whether these taxes on basic research are hurting fundamental scientific research, and if there are adequate controls for detecting waste, fraud and abuse. Witnesses, including individuals who lead the administration and management of three of the largest SBIR and STTR programs (NIH, NSF, and DOE), identified areas of potential improvement for the Committee’s consideration of reauthorizing these programs.

For more information about today’s hearing, including the webcast and witness testimony, visit the Committee’s website.