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Title II — Encouraging Small Business Innovation in All of America

S. 853 · 119th Congress · Mar 5, 2025 · Lineage

II Encouraging Small Business Innovation in All of America

Sec. 201 Encouraging new SBIR and STTR entrants

(a)
In general—
(1)
Encouraging new SBIR and STTR entrants— Section 9(jj) of the Small Business Act (15 U.S.C. 638(jj)) is amended to read as follows:

“(jj) Encouraging new SBIR and STTR entrants

“(1) Optimizing SBIR and STTR funding—A small business concern, including its affiliates, spinouts, or subsidiaries, may not apply to a Phase I or Phase II solicitation under an SBIR or STTR program if the small business concern, including its affiliates, spinouts, or subsidiaries, has previously received over $75,000,000 in funding from SBIR or STTR Phase I and Phase II awards.

“(2) Primary investigators—An individual may not concurrently serve as the primary investigator on more than 1 proposal to a single Phase I solicitation or a single Phase II solicitation.

“(3) Phase I size standard—A small business concern applying for a Phase I award may not have annual receipts (as defined in section 121.104 of title 13, Code of Federal Regulations, or any successor regulation) of more than $40,000,000 for the most recent fiscal year.”

(2)
Conforming amendment— Section 9(tt)(1)(A) of the Small Business Act (15 U.S.C. 638(tt)(1)(A)) by striking “, (jj)(6)”.
(b)
Phase 1A program— Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is amended—
(1)
in subsection (e)(4)—
(A)
in subparagraph (A), by striking “subparagraph (B)” and inserting “subparagraph (C)”;
(B)
by redesignating subparagraphs (B) and (C) as subparagraphs (C) and (D); and
(C)
by inserting after subparagraph (A), the following:

“(B) a 1A phase for the same purposes as the first phase described under subparagraph (A) and intended to increase accessibility to the program for new entrants, with proposals submitted pursuant to only SBIR open topic announcements;”

(2)
by amending subsection (pp) to read as follows:

“(pp) Phase 1A awards

“(1) Sense of Congress—It is the sense of Congress that—

“(A) Phase 1A funds will bring thousands of new small business concerns committed to commercialization of critical technologies into the SBIR program; and

“(B) in order for participating agencies to benefit from the full scope of American innovation and identify the most promising solutions to scale, Phase 1A awards should fund the strongest technologies in a topic area regardless of—

“(i) the location of the small business concern within the United States; or

“(ii) the educational background of the principal investigator.

“(2) Authorization—The head of each agency with an SBIR program shall allocate not less than 2.5 percent of funding for the SBIR program of the agency to Phase 1A awards.

“(3) Solicitation—A solicitation issued under this subsection shall be conducted as an open topic announcement, as defined in subsection (e).

“(4) Eligibility—In order to be eligible for an award under this subsection, a small business concern, including its affiliates, spinouts, or subsidiaries, shall not have previously received an SBIR or STTR award.

“(5) Proposal

“(A) In general—A proposal submitted in response to a solicitation under this subsection shall consist of a report of no more than 2 pages in length and shall contain the criteria described in subparagraph (B).

“(B) Criteria

“(i) Identification of problem—The small business concern shall describe the problem that the proposal is intended to address for the awarding agency and any commercial customer.

“(ii) Description of solution—The small business concern shall describe the proposed solution, including the technical basis for the solution to demonstrate how the solution would address the problem described in the proposal, including the level of maturity of the solution at the time of the proposal.

“(iii) Impact of the solution—The small business concern shall describe how adoption of the proposed solution would produce potential time savings, cost savings, risk reduction, improvement of mission outcomes, or any other beneficial impact for the awarding agency and any commercial customer.

“(iv) Differentiation—The small business concern shall—

“(I) identify the state of solutions in use at the time of the proposal to address the problem described in the proposal; and

“(II) explain how the proposed solution is a unique and novel solution.

“(v) Commercialization strategy—The small business concern shall—

“(I) describe how the small business concern intends to fund the proposed solution; and

“(II) explain the market for the proposed solution, including the intended Government and commercial end users.

“(6) Award limits

“(A) Number of awards—A small business concern or principal investigator is eligible for not more than 1 Phase 1A award.

“(B) Amount—An award made under this subsection shall be for not more than $40,000.

“(7) Notification of selection or non-selection—Each agency shall notify each small business concern of the award decision of the agency on any proposal submitted by the small business concern not later than 90 days after the date on which the solicitation closes.

“(8) Application for Phase II award

“(A) Eligibility—A small business concern that receives a Phase 1A award shall be eligible to apply for a Phase II award.

“(B) Use of funds—A small business concern may use funds from a Phase 1A award to develop a proposed solution in pursuit of a subsequent proposal for a Phase I award or a Phase II award.”

Sec. 202 Combating discriminatory practices in the SBIR and STTR programs

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is amended—
(1)
in subsection (b)(7)(C), by striking “owned and controlled by women or by socially and economically disadvantaged individuals” and inserting “owned by individuals who reside in emerging States or rural areas”;
(2)
in subsection (e)—
(A)
in paragraph (18), by striking “and” at the end;
(B)
in paragraph (19), by striking the period at the end and inserting a semicolon; and
(C)
by adding at the end the following:

“(20) the term emerging State means the 25 States with the fewest combined number of award recipients in the SBIR program and the STTR program that have received their first Phase I award in the previous 10 fiscal years;

“(21) the term rural area means a county or other political subdivision of a State that the Bureau of the Census has defined as mostly rural or completely rural in the most recent decennial census;”

(3)
in subsection (g)(8)(A)—
(A)
by striking clause (iii);
(B)
by redesignating clauses (iv), (v), and (vi) as clauses (iii), (iv), and (v), respectively; and
(C)
in clause (iii), as so redesignated, by striking “a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual” and inserting “an individual who resides in an emerging State or rural area or has an individual who resides in an emerging State or rural area”;
(4)
in subsection (j)—
(A)
by adjusting the margins for paragraphs (2) and (3) 2 ems to the left; and
(B)
in paragraph (2)—
(i)
by striking subparagraph (F);
(ii)
by redesignating subparagraphs (G), (H), and (I) as subparagraphs (F), (G), and (H); and
(iii)
in subparagraph (H), as so redesignated, by striking “subparagraph (H)” and inserting “subparagraph (G)”;
(5)
in subsection (k)(1)(F)—
(A)
by striking clause (ii);
(B)
by redesignating clauses (iii), (iv), and (v) as clauses (ii), (iii), and (iv), respectively; and
(C)
in clause (ii), as so redesignated, by striking “a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual” and inserting “an individual who resides in an emerging State or rural area or has an individual who resides in an emerging State or rural area”;
(6)
in subsection (o)(9)(A)—
(A)
by striking clause (iii);
(B)
by redesignating clauses (iv), (v), and (vi) as clauses (iii), (iv), and (v), respectively; and
(C)
in clause (iii), as so redesignated, by striking “a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual” and inserting “an individual who resides in an emerging State or rural area or has an individual who resides in an emerging State or rural area”; and
(7)
in subsection (mm)—
(A)
in paragraph (1)—
(i)
in the matter preceding subparagraph (A), by striking “and until September 30, 2025”; and
(ii)
in subparagraph (F), by striking “or abuse to ensure compliance” and inserting “abuse, or adversarial influence to ensure compliance”;
(B)
in paragraph (2)(A), by striking “to carry out the policy directive required under subsection (j)(2)(F) and” and inserting “to increase the participation of States with respect to which a low level of SBIR awards have historically been awarded”; and
(C)
by adding at the end the following:

“(7) Eligibility—For an agency to be eligible to utilize funds allocated to the SBIR program of that Federal agency under this subsection, the agency shall not—

“(A) consider the race, gender, or ethnicity of the principal investigator, founder, or key personnel of the small business concern applying for an SBIR or STTR award in an award decision under the SBIR or STTR program of the agency;

“(B) require or consider a statement or plan to promote diversity or equity as part of an application for an SBIR or STTR award under the SBIR or STTR program of the agency; or

“(C) offer supplemental funds to a recipient of an SBIR or STTR award based on the race, gender, or ethnicity of the principal investigator, founder, or key personnel of a small business concern.”