Policy Blog – March 9, 2026 – SBIR Reauthorization Clears US Senate, Legislature Enters Final Week of Session

The US Senate last week unanimously passed legislation to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which provide critical early-stage funding for small Washington companies developing new technologies and therapies. The programs expired in October, but Congress is now moving to restore it. The House is also expected to take up the reauthorization soon, potentially during the week of March 16–20. Passage of this reauthorization has been a major focus of our federal advocacy efforts in partnership with other state bioscience associations.

Importantly, the timing of this reauthorization effort should still allow the April SBIR application round to proceed as expected, so companies planning to apply should continue preparing their materials.

SBIR and STTR grants help small firms move promising ideas from early research toward commercialization and private investment. Nationally, the programs have provided more than $77B in funding to roughly 33,000 businesses. These grants are especially important for early-stage biotech startups, helping support research that has contributed to about 12 percent of FDA-approved drugs. The National Institutes of Health (NIH) runs the second-largest SBIR/STTR program after the Department of Defense.

With less than a week remaining before the scheduled March 12 adjournment, lawmakers’ attention turns to finalizing the budget and working through bills that were amended in the opposite chamber and must be reconciled before they can pass.

As negotiations continue, we are still closely tracking several key priorities for the life sciences community, including legislation related to 340B, emerging tax proposals, and important budget items such as continued support for the Andy Hill CARE Fund and funding for the Center for Biotechnology Innovation and Training (CBIT) at the University of Washington Bothell, that we highlighted in a letter we sent to legislative leaders and appropriators.

On Friday, Rep. Berg released the latest version of the Millionaire’s Tax (SB 6346). This draft retains sales tax exemptions on diapers and hygiene products and tax breaks for businesses found in earlier versions of the bill and adds a sales tax exemption for over-the-counter drugs. It also expands eligibility for the Working Families Tax Credit, adds funding for free breakfast and lunch for all Washington students, and dedicates 5% of the revenue to child care and early learning programs. 

The new version also includes a sales tax exemption for presentations given by nonprofit organizations and a sales tax exemption for schools, school districts, and ESDs beginning July 1, 2026. These items were considered taxable income under last session’s SB 5814. It also adds exemptions for hospitals and for warehousing and reselling of prescription drugs beginning January 1, 2029. This version removed the dedicated revenue to county public defense services found in earlier versions of the bill.

Presumably, this version has the votes to pass the House, with a vote expected early this week. Governor Ferguson has indicated that he will sign this version into law. However, questions remain about the constitutionality of a state income tax.

On Friday, the House passed SB 5981, the 340B manufacturer mandate bill, taking it up as one of the last bills before the cutoff. Debate was long and passionate at times, with lawmakers rejecting 17 amendments that would have ensured patients actually see a benefit from the program, including limiting the bill to FQHCs only; limiting contracts to pharmacies in rural counties or medically underserved areas; prohibiting contracts with pharmacies owned by a PBM; and directing hospitals to use 90% of the 340B revenue on direct patient care. The bill passed 67-30-1, with a mix of Democrats and Republicans on both sides of the vote. The bill now returns to the Senate for a concurrence vote on the House amendments.

• HB 1155, prohibiting companies from requiring employees to sign non-compete clauses, passed the Senate on a party line vote. It was not amended to exempt senior executives from the provisions of the bill. 
• SB 6347, the estate tax legislation, passed the House Finance Committee and is now awaiting a vote by the full House. The Finance Committee adopted an amendment to return the estate exclusion amount to $2.193M (up from $1M) and references the Consumer Price Index for the Seattle-Tacoma-Bremerton area.
• The health technology assessment legislation, SB 5915, passed the House unanimously.  This bill offers a modification in the evidence acceptable in HTA reviews and gives some weight to previously completed Medicare reviews. The House did not amend the bill, so it goes straight to the Governor for his signature.
• SB 5594, the biosimilar prescribing practices bill, did not advance before the required deadline.
• SB 6129, the tobacco/nicotine/vapor tax bill, was heard in the House Finance Committee last week.  It was scheduled for a vote on Saturday, but no vote was taken. This legislation had a $10 million allocation to the Andy Hill Cancer fund. House and Senate budget proposals still appropriate funding for the CARE Fund.