On 23 April 2008 the House of Representatives passed HR 5819, legislation to re-authorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These federal programs support the development and commercialization of innovative technologies by small high-tech companies, and are administered through the Small Business Administration. Funding for SBIR and STTR is derived from mandatory set-asides in the research budgets of the 11 federal agencies that spend more than $100 million on extramural research, including the National Science Foundation (NSF) and National Institutes of Health.

HR 5819 initially proposed to increase SBIR’s set-aside from 2.5 to 3.0 percent and STTR’s set-aside from 0.3 to 0.6 percent, a 20 and 100 percent increase, respectively. The proposed levels (3.0 and 0.6) would have collectively removed $650 million from federal agency extramural research funds. For NSF, an additional $28.9 million would have been shifted from research accounts to the SBIR and STTR programs.

AIBS and other academic and scientific organizations, including the Association of American Universities, the American Association of Medical Colleges, the Federation of American Societies for Experimental Biology, and the National Association of State Universities and Land Grant Colleges, expressed serious concern about the impact the proposed increases would have on the ability of agencies to fund research. In a letter to Representative Vernon Ehlers (R-MI), AIBS wrote, “Given that the NSF budget is not growing (in constant dollars), the SBIR/STTR set-asides could result in decreased funding to core programs at NSF, including the Biological Sciences Directorate.”

Higher education and scientific organizations were not alone in their concern. In remarks on the House floor, House Appropriations Committee Chairman David Obey (D-WI) expressed his concern for the negative impacts the legislation would have on the NIH research portfolio.

Representative Ehlers introduced an amendment to remove the proposed increases and while maintaining the current percentages. In remarks during debate on his amendment, Representative Ehlers explained, “My concern and my purpose behind my amendment is to make sure that we are not robbing Peter to pay Paul. If we increase the SBIR and STTR program percentages while other agency’s funding remains flat, we begin to severely erode our fundamental research base. I would much rather see us fight over extra funding for our basic research programs, our fundamental research programs, of which a percentage would then transfer into SBIR and STTR.”

The House adopted Ehlers’ amendment by voice vote, and passed HR 5819 with a bipartisan majority of 368-43.

To read the AIBS letter to Representative Ehlers, please visit http://www.aibs.org/position-statements/.


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