Senators Offer Rewrite of SBIR Program Rules The Senate Small Business Committee has approved legislation that would permit some Small Business Innovation Research awards to companies controlled by large venture capital firms. Committee Chairman John Kerry, D-MA, and the ranking Republican, Olympia Snowe of Maine, said the legislation is a compromise that would allow VC-backed companies limited participation in the program. The House has approved legislation that would permit full participation by VC-controlled companies. Under the Senate bill, no company that is majority-owned or controlled by a single VC investor would qualify for SBIR awards, but those controlled by two or more VC firms would be eligible. The VC-controlled firms would be limited to 18% of SBIR funding by the Department of Health and Human Services, and just 8% of the funding by other agencies. Biotechnology companies, which depend heavily on VC investment, have been pushing for access to SBIR funding. Under current rules, no company that is controlled by a large VC firm is eligible for SBIR funding. The Senate bill would also increase the maximum award for Phase I grants to $150,000, from the current $100,000, and Phase II grants to $1 million, from the current $750,000. The House has voted to triple the maximum amounts. The Senate bill would gradually increase the SBIR share of agencies’ R&D budgets from 2.5% to 3.5% over 10 years. The bill, S. 3362, would also reauthorize the Small Business Technology Transfer program.