House, Senate Pass Dueling Small Business R&D Bills The House and Senate are deadlocked over whether to allow Small Business Innovation Research grants to companies controlled by large venture capital investors. The House says “yes;” the Senate says “up to a point.” The House voted July 8 to allow full participation by VC-controlled companies. The Senate voted July 13 to limit those companies to no more than 8% of SBIR funding in most agencies and 18% of funding through the National Institutes of Health. The venture capital issue has stalled reauthorization of the SBIR program for years. House and Senate negotiators will now try to work out their differences. Some small business advocates say allowing VC-controlled companies to compete for grants will tip the playing field against independently owned small firms. The biotechnology industry has lobbied hardest in favor of VC participation, because those companies often depend on large investors to fund their research. The National Institutes of Health is a leading supporter of biotech research. The two houses of Congress also disagreed on maximum funding levels for SBIR grants. They did agree that total SBIR funding, now 2.5% of federal R&D spending, would rise gradually to 3.5%. The SBIR program will sunset on July 31 unless the two houses reach agreement or pass another extension.