Current status is 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.

119th CONGRESS

1st Session

H. R. 4775

1. Short title
2. Extension of due diligence program to assess security risks
3. Codifying safeguards for small business concerns majority-owned by venture capital operating companies, hedge funds, or private equity firms

1. Short title

This Act may be cited as the "SBIR/STTR Foreign Interference Safeguard Act".

2. Extension of due diligence program to assess security risks

Section 9(vv)(3)(C) of the Small Business Act (15 U.S.C. 638(vv)(3)(C)) is amended by striking "September 30, 2025" and inserting "September 30, 2030".

3. Codifying safeguards for small business concerns majority-owned by venture capital operating companies, hedge funds, or private equity firms

(a) In general - Section 9(dd) of the Small Business Act (15 U.S.C. 638(dd)) is amended—

(1) - in paragraph (6)(B), by striking "If a Federal" and inserting "Except as provided in paragraph (8), if a Federal"; and

(2) Participation limits - by adding at the end the following new paragraph:

(8) Participation limits -

(A) In general - A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms is ineligible to receive an award under any SBIR program if the Administrator determines that such small business concern is, or is owned and controlled in majority part by, a covered foreign entity.

(B) Ownership determination - In determining whether a small business concern is ineligible to receive an award under any SBIR program under subparagraph (A), the Administrator shall consider whether the small business concern is a direct or indirect subsidiary of a foreign-owned firm.

(C) Size standards - The Administrator shall establish size standards for small business concerns seeking to participate in an SBIR program solely under the authority under this section.

(D) Definitions - In this paragraph:

(i) Covered foreign entity - the term covered foreign entity—

(I) - means—

(aa) - a foreign entity of concern;

(bb) - a government or political party of a foreign country of concern;

(cc) - a natural person who is not a lawful permanent resident of the United States, citizen of the United States, or any other protected individual (as such term is defined in section 274B(a)(3) of the Immigration and Nationality Act (8 U.S.C. 1324b(a)(3))); or

(dd) - a partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country of concern; and

(II) - includes—

(aa) - any entity owned by, controlled by, or subject to the jurisdiction or direction of a an entity listed in subclause (I);

(bb) - any person, wherever located, who acts as an agent, representative, or employee of an entity listed in subclause (I);

(cc) - any person who acts in any other capacity at the order, request, or under the direction or control, of an entity listed in subclause (I), or of a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in majority part by an entity listed in subclause (I);

(dd) - any person who directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, owns 25 percent or more of the equity interests of an entity listed in subclause (I);

(ee) - any person with significant responsibility to control, manage, or direct an entity listed in subclause (I);

(ff) - any person, wherever located, who is a citizen or resident of a country controlled by an entity listed in subclause (I); or

(gg) - any corporation, partnership, association, or other organization organized under the laws of a country controlled by an entity listed in subclause (I).

(ii) Foreign entity of concern - The term foreign entity of concern means a foreign entity that is—

(I) - designated as a foreign terrorist organization by the Secretary of State under section 219(a) of the Immigration and Nationality Act (8 U.S.C. 1189(a));

(II) - included on the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury (commonly known as the SDN list);

(III) - owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is a covered nation (as such term is defined in section 4872 of title 10, United States Code);

(IV) - alleged by the Attorney General to have been involved in activities for which a conviction was obtained under—

(aa) - chapter 37 of title 18, United States Code (commonly known as the Espionage Act);

(bb) - section 951 or 1030 of such title;

(cc) - chapter 90 of such title (commonly known as the Economic Espionage Act of 1996);

(dd) - the Arms Export Control Act (22 U.S.C. 2751 et seq.);

(ee) - section 224, 225, 226, 227, or 236 of the Atomic Energy Act of 1954 (42 U.S.C. 2274, 2275, 2276, 2277, and 2284);

(ff) - the Export Control Reform Act of 2018 (50 U.S.C. 4801 et seq.); or

(gg) - the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.); or

(V) - determined by the Secretary of Commerce, in consultation with the Secretary of Defense and the Director of National Intelligence, to be engaged in unauthorized conduct that is detrimental to the national security or foreign policy of the United States.

(b) Applicability - The amendments made by subsection (a) shall apply only with respect to awards made under an Small Business Innovation Research Program (as defined in section 9(e) of the Small Business Act (15 U.S.C. 638(e))) after the date of the enactment of this Act.