Federal innovation funding expands to distressed regions with 90% cost-share
S. 5198 — Build to Scale Reauthorization Act of 2026 · Filed by Todd Young (R-IN) · 1 cosponsor · Introduced Jul 30, 2026 · Referred to committee
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What it does
This bill reauthorizes and expands the federal regional innovation program, which funds state and nonprofit organizations that provide financing, commercialization support, and entrepreneurial services to innovation-based businesses in economically distressed areas. The bill increases the federal cost-share cap from 50% to 90% (50% base plus up to 40% additional based on area need), expands eligible activities to include workforce training, and authorizes $50 million annually through 2030 for the program.
Why we flagged it
The bill's core function is to extend and expand federal funding for state and nonprofit organizations that support innovation-based business development in economically disadvantaged regions. It is a straightforward reauthorization with modest program enhancements.
What the text implies
- The 90% federal cost-share (50% base + up to 40% supplemental) may reduce state/local fiscal commitment to regional innovation, potentially weakening local ownership and sustainability of programs after federal funding ends.
- Expansion of eligible activities to include workforce training creates potential for mission creep and overlap with existing Department of Labor programs, raising questions about coordination and duplication.
The full analysis lists 4 implications of this text.
Who stands to gain
State economic development agencies; Nonprofit venture development organizations; Innovation-centered startups and small businesses in eligible regions