If these are the jobs of the future, who are the employers? They're overwhelmingly small businesses. There are about 22,000 home health care establishments, and the largest control less than 5 percent of the market, according to an analysis of the industry to be released Wednesday by FranData. The Arlington, Va., company produces market research reports for the franchise industry.

Franchisors, who license a brand and a business process to independent operators, are clamoring to capture the business of assisting senior citizens who want to remain in their homes. There are more than 60 brands selling home health care franchises, according to the report. Many of them have been franchising for only a few years.

How those companies will treat their growing workforce is a big question for the industry. The report notes that "many direct-care workers involved in personal care lack the training and support necessary to provide quality at-home care, such as administering medications. The poor working conditions and low salaries, at a national median of $8.8 [per hour] ... contribute to a high staff turnover rate."

Employers in many states have been exempt from providing home care workers minimum wage and overtime pay under a 1975 law that considers them "companions." The Obama administration wants to repeal that exemption. In its proposal, the Labor Dept. notes:

Studies have shown that the low income of direct care workers including home care workers continues to impede efforts to improve both jobs and care.... Moreover, the workers that are employed by home care staffing agencies are not the workers that Congress envisioned when it enacted the companionship exemption, i.e., neighbors performing elder sitting, but are instead professional caregivers entitled to [Fair Labor Standards Act] protection.

For-profit placement companies not associated with hospitals or other care providers have come to dominate the industry, from 2 percent of Medicare-certified agencies in 1975 to 68 percent in 2006, according to the Labor Dept. As FranData also notes, they're overwhelmingly paid with public funds. Three-fourths of home health care revenue comes from public programs like Medicare and Medicaid, and pressure to control the cost of those programs could cut into the industry's profits, the FranData report warns would-be franchise buyers.

Industry groups such as the National Association for Home Care and Hospice want Congress to preserve the labor law exemption, arguing that increasing wages without increasing reimbursement could make care unaffordable.

Fears that raising worker pay will reduce access to home care are overblown, says Rebecca Givan, an assistant professor at Cornell University's ILR School. "It will raise wages for the very, very lowest paid of these home health care workers," Givan says. They're mostly women who are the main earners in their households, she says, and "many of them are relying on public assistance."

Many home health care agencies already pay their workers minimum wage and overtime, though. "There are many high-road employers that this won't affect at all," Givan says.

The businesses using the exemption are essentially being subsidized three times by the government: they get paid by public programs, they pay workers wages that would be unlawful without the "companionship" exemption, and those workers in turn depend on government aid to supplement their low pay. If wages rise and reimbursement rates don't, that may jeopardize profits for those companies. "It's generally some of the highly profitable staffing agencies that may be affected," Givan says.

Turns out customizing video game controllers for gaming addicts who want to shoot faster can be a decent business. Tim Erven says his five-year-old venture, Custom Gaming in Whippany, New Jersey, has been profitable since he started it, with revenue around $300,000 in 2011, and some 250 orders a week now, mostly through its Amazon storefront.

To keep up with demand, the 22-year-old has been trying to get banks to lend him as little as $10,000 to improve his website and rent a warehouse near his home. The six banks he's approached have rejected his applications because of his age and because he hadn't gotten a business loan before, even though his tax returns show profits and his parents were willing to put up their home as collateral. "From what the banks told me, asking for 10 percent of my annual revenue was reasonable, and what tends to be conventional, but even by decreasing the amount I was seeking I was still unable to obtain approval," says Erven, who juggles balances on six credit cards to manage cash flow.

Erven's situation isn't unusual for small business owners navigating post-crisis banking. A recent National Federation of Independent Business study shows that even while demand for credit is on an upward trajectory, the number of small employers able to land a bank loan has not moved in parallel. Bank credit for small firms (defined as businesses with annual sales of less than $50 million) has been ticking up, slightly, since the third quarter of last year, according to the Federal Reserve's quarterly surveys of senior loan officers and other government data. "But it should be much stronger at this point in the economic recovery," says Paul Merski, chief economist at the Independent Community Bankers of America in Washington. (Community banks make nearly 60 percent of outstanding loans to small businesses, according to the trade group.)

Before lending will rebound, of course, consumer spending and real estate prices have to improve. And tempering new underwriting rules is crucial, too, says Merski. At a community banking conference last week, Federal Reserve Chairman Ben S. Bernanke urged bank supervisors to strike a "delicate balance" between encouraging lending and avoiding a race to the bottom in loan standards.

Erven isn't waiting for bankers to nail that balancing act. He plans to meet with Chinese private investors about raising capital from them and moving some of his production to China. "I'm either going to have to give a portion of the company or pay a high [interest rate]," says Erven. "I'd be able to get a much lower rate [from a bank], but that's the reality of what I have to do to get the funding."

Strange, then, that a plan to simplify the business tax code and cut rates would spark a condemnation from small business groups. This chart tells you why:

The lower rate would only apply to companies organized as C corps, which pay corporate income taxes. They make up less than 6 percent of business tax returns, according to IRS data. (They account for closer to two-thirds of all business revenue and income.) For the rest of the business world, including partnerships, sole proprietors, S corps, and limited liability companies, their business earnings flow through to owners' personal income and are taxed at individual income tax rates.

Eliminating tax breaks without lowering individual income tax rates could effectively raise taxes on some small business owners, says Todd McCracken, president of the National Small Business Association, a Washington trade group. "The business deductions are relatively unified. A deduction's a deduction, whether you're a C corp or a sole proprietor, for the most part," he says.

McCracken likes some parts of the Obama proposal: A plan to make permanent deductions for capital investment (such as equipment and software) and research and development. (Yes, the tax reform supposedly eliminating deductions includes plans to expand deductions.) Still, he says, reforming the corporate tax code and letting the Bush tax cuts expire could leave non-corporate business owners facing a federal income tax rate of over 40 percent next year on earnings over $250,000.

The National Federation of Independent Business, a frequent foe of the Obama White House, panned the proposal, saying in a statement that "the focus should be on individual rate reform." Not every small biz lobby agrees. Small Business Majority, a group that generally supports Obama's policies, praised the plan and noted that "reforming the tax code will eliminate dozens of loopholes that consistently leave small businesses paying an unfair share of taxes."

McCracken says the plan is short on specifics but looks like a mixed bag. He favors reform that would tackle the individual tax code alongside corporate taxes. The chances of any major tax plan passing in Congress this year, he notes, are very slim. So even if corporate tax reform spells trouble for small businesses, they probably don't have to worry about it any time soon.

Entrepreneurs, tech executives, and venture capitalists have long complained that America's visa rules keep aspiring entrepreneurs who lack U.S. passports from starting companies in the U.S. Now immigration authorities are reviewing those rules to see if they can make them work better for entrepreneurs.

We're not talking about creating a startup visa or changing the number of people the U.S. lets into the country under various programs. No one expects this Congress to pass broader immigration reform. But U.S. Citizenship and Immigration Services says it wants to make sure its existing system is realistic for high-growth companies.

The agency is hosting an online summit today to discuss how immigration policy affects entrepreneurs. Then five business and academic leaders from the private sector will work with immigration authorities to review visa laws and make sure they "provide pathways that are clear, consistent, and aligned with business realities," Stephanie Ostapowich, a spokeswoman for the agency, said in an email. (The agency calls these "entrepreneurs in residence" and hasn't yet announced who they are.)

The current system hamstrings foreign-born entrepreneurs, says Vivek Wadhwa, a researcher at Duke University (among others) participating in the summit. "Silicon Valley is bleeding right now," he says, with high-skilled immigrants returning to start companies in China, India, Brazil, or other countries because of barriers to staying in America. (Wadhwa is an occasional columnist for Businessweek.com.)

For example, Wadhwa says the current rules prohibit startups from sponsoring visas for their founders. He also notes that immigration authorities sometimes consider companies with no revenue or those not selling physical goods fraudulent, even though early-stage tech companies often have neither.

Wadhwa says Alejandro Mayorkas, the director of Citizenship and Immigration Services, and other White House officials are hearing tech executives' calls for an immigration fix. "These people have spent time in Silicon Valley," he says. "Almost every CEO here has been ripping into them. They really get it now."

Photograph by Aron Sueveg / Anzenberger/Redux

Employers who rely on low-skilled workers from abroad have a new set of rules to digest. On Feb. 10, the Labor Dept. issued 575 pages of regulations for its H-2B visa program that U.S. employers use to bring foreign nationals to fill temporary non-agricultural jobs. H-2Bs generally allow for a maximum 10-month stay and are often used by small, seasonal businesses such as housing contractors, landscapers, and seafood processors. The application process, which involves filing paperwork with the Labor Dept. and Immigration authorities, has been growing steadily more complicated and time-consuming. Now it's even tougher.

Among the biggest changes in the new rules, which go into effect on April 23: They'll have to demonstrate to state agencies--not merely attest--that they weren't able to locate enough U.S. workers. They'll have to post the jobs in a national online registry administered by the Labor Dept. and start advertising in local publications about two weeks earlier than in the past. And they'll also be responsible for employees' travel costs to and from their home countries, provided the worker completes a certain number of days on the job.

The goal of the new rules is to respond to efforts by the Obama administration to increase employment. "The H-2B program is designed to help businesses when there is a temporary shortage of U.S. workers," Secretary of Labor Hilda L. Solis said in a statement. The changes "will ensure that the program is used as intended by making these jobs more accessible to U.S. workers and providing stronger protections for every worker."

Seventh-generation oysterman Mike Voison, chief executive officer of Motivatit Seafoods, an 85-employee seafood supplier and processor in Houma, La., says he'd prefer to hire locals, rather than foreigners. But since Hurricane Katrina, Voison has struggled to find Americans willing to do the low-wage work. (Pay at Motivatit starts around $8.50 an hour.). "You say there's an 8.5 percent unemployment rate in America," says Voison. "Look, I would love every one of those 8.5 percent to come work."

Voison is concerned that the new rules will "hurt American jobs." For every one of the 30 or so H-2B workers he employs, "there are about two American jobs that I feel are supported by that," says Voison. "I have a management team, I have truck drivers, I have people that make boxes, I have people that pack the product, I have American jobs in the plant besides those."

Voison has been contemplating building a facility in Mexico where "ample labor" exists. "That would be terrible--my community depends [on us]," he says, but the new rules "are just not going to work for bringing in foreign labor."

Photograph: Bloomberg

Small businesses have increased their share of exports in the two years since President Obama set a goal to double U.S. sales abroad by 2015, according to new federal data.

Companies with fewer than 500 employees accounted for 35 percent of exports in the third quarter of 2011, according to preliminary figures from the Census Bureau, up from about 32.8 percent in 2009. The figure, from a report set to be released in April, refers only to sales of goods, not services.

"Ninety-eight percent of U.S. exporters are small and medium-sized enterprises but these exporters have historically represented only 30 percent of U.S. export value," Tim Truman, a spokesman for the Commerce Department's International Trade Administration, said in an email.

The increase follows a two-year government effort to expand the reach of American companies by increasing trade financing and technical help to businesses that want to export.

Still, the results of those efforts are modest, says Laurel Delaney, president of GlobeTrade, a Chicago-based consultant to exporters. "It's like the needle isn't really moving much for the small business market," she says. Delaney says measuring service exports might show greater growth among small businesses because of the ease of doing business online. The government doesn't track service exports by company size.

One federal initiative that could help: loosening export controls, or restrictions on selling components of military technology that may have other commercial uses. "A U.S. company can't sell that particular part...even though it may be used on a conveyor belt in Germany," says Todd McCracken, president of the National Small Business Association, a Washington, D.C., trade group. "We think there's a lot of potential there to both increase exports and increase the competitiveness [of small business] in other countries."

The National Export Initiative aims to increase U.S. exports to $3.14 trillion in 2015, double the level of 2009. Last year, total exports (of goods and services) reached $1.9 trillion through November, up from $1.4 trillion in the same period in 2009. Obama said last week in the State of the Union that the U.S. was on track to meet that goal ahead of schedule. Full year data for 2011 will be released Feb. 10.

Photograph by Ken James/Bloomberg

Companies with fewer than 500 employees were long thought to make up half of private non-farm gross domestic product and create 65 percent of net new jobs, according to widely cited government research. In fact, their share of GDP dropped from 48 percent in 2002 to 46 percent in 2008, and probably weakened further in the next two years, according to a new analysis for the SBA by economist Kathryn Kobe.

And even though small businesses are widely hailed as job creators, over the last three quarters in 2010 they were responsible for just over half of net new jobs, the paper suggests, compared to two-thirds in earlier periods. Kobe cautions against drawing too many conclusions from such a short period, however. "During different parts of the business cycle, there's different things going on in small and large businesses," she said in an interview.

As the report notes, corporate profits (which are dominated by large businesses) rebounded faster than other business income (from sole proprietors, partnerships, etc.) after the 2001 recession, and we saw a similar pattern in this recovery. Construction is a big part of the reason. Small businesses employed 84 percent of construction workers in 2008. That industry took the biggest hit from the housing collapse and has been the slowest to recover.

In other industries, such as wholesale and retail trade and professional services, the small business share of GDP declined as the industries consolidated and small companies employed fewer workers than before. "It's a combination of how small businesses are doing within these sectors but also how important these sectors are to the overall economy," Kobe says.

Her analysis also uses new data to more precisely determine what counts as a small business. Starting in 2002, the paper counts large companies that are not incorporated (such as big law firms still organized as partnerships, or big LLCs) as large businesses. Before that, these were automatically counted as small companies (the data to discern larger entities wasn't available).

That change in methodology helped take two points out of small businesses' contribution to the economy, measured at 50.3 percent in 2001 and, with the new method, 48.3 percent in 2002. After that, however, the decline is fairly consistent. And though the numbers for the last two years in the paper were based on trends rather than complete data, Kobe's research suggests that by 2010 small business accounted for less than 44.6 percent of private non-farm GDP -- a meaningful drop from the start of the decade.

For some small companies going public, the change would delay some requirements of Sarbanes-Oxley that have to do with internal controls.

"We define a new kind of company that we call an emerging growth company," says Mary Miller, the Treasury Department's assistant secretary for financial markets. "We are trying to loosen up some of the requirements that make it difficult for a company to price an IPO," she said on a conference call with reporters today.

Specifically, the change would apply to companies with revenue under $1 billion that have issued less than $1 billion in debt and are floating less than $700 million in publicly-held shares, according to an outline provided by the White House (PDF). The so-called "IPO on-ramp" period would last up to five years. Businesses would still be subject to the other reporting requirements that apply to public companies.

(Some more background on the piece of SarbOx, the post-Enron law designed to prevent financial fraud, that would be loosened for small companies is here.)

Startups and venture capitalists have long complained that the high costs of complying with regulations discourage startups from going public. The National Venture Capital Association backed the IPO on-ramp idea in testimony in December (PDF) and suggests that it would apply to less than 15 percent of companies now trading on U.S. exchanges.

White House officials on the conference call, including Small Business Administration chief Karen Mills, kept repeating that the president's small business proposals today are intended to get bipartisan support in Congress. That may seem unlikely in an election year and a Congress in gridlock with bitter divisions. But easing rules for small businesses raising capital was one issue both parties in the House, at least, could get behind last year.

While business demand for borrowing increased, banks reported "little change in standards on commercial and industrial loans but a continued easing of pricing terms," the survey said. The pickup in business lending was a reversal of the previous survey, released in November, in which more banks reported a drop than an increase in demand.

Banks and businesses may be "moving away from the 'buckle down' approach," said Drew Matus, senior economist at UBS Securities LLC in Stamford, Connecticut.

"If a firm wants to expand they typically need to borrow money to do it," Matus said. "So at a minimum this suggests we should still be looking for decent job growth over the next three to six months."

Small firms in this case are defined as companies with less than $50 million in annual sales. Of 53 banks that answered the question, 14 said they saw stronger demand from small firms and six said they saw weaker demand. In the last survey, released in October, only four banks said demand from small companies was stronger, and 13 banks said it was weaker.

Since Hurricane Katrina, New Orleans has reinvented itself as a bit of an entrepreneurial hub, replete with incubators and accelerators and an Entrepreneur Week now in its fourth year that draws visitors from Google, Stanford, and venture capital firms. It has homegrown success stories like the Receivables Exchange and Naked Pizza that now have national profiles.

The groundwork for building a startup community in the Crescent City began long before Katrina put it in the spotlight. Part of the effort originated in 1999, when New Orleans native Tim Williamson met at a bar with four other entrepreneurs to discuss ways to counter the brain drain that began in the city in the 1980s. The tech boom of the 1990s had largely missed New Orleans, Williamson says, and most people with good business ideas left the city because they encountered an insular business community with little support for new entrepreneurs. Williams soon co-founded the Idea Village, a decade-old nonprofit intended to change that. His question: "How do you make entrepreneurship part of your culture?"

It's a question cities across the country are trying to answer. From New York to Detroit to Cleveland, business and political leaders see high-growth entrepreneurship as a salve for unemployment and decay, especially in areas where manufacturing or other industry has disappeared. Smaller cities are seduced by the prospect of becoming the next Boulder or Austin, centers of technology and growing industries that draw young, educated workers and high-paying jobs.

"I believe this can happen anywhere," Williamson said in an interview yesterday. That's not to say it's easy, or that every plan to make Akron or Omaha into a startup center is going to work. Williamson says that cities plunk down big sums and try to orchestrate entrepreneurial revivals from the top down are likely to fail. Local entrepreneurs need to lead the effort and build relationships in different networks throughout the city. "It takes time. It doesn't take money," he says. "Lack of money is good, in a sense." That forces communities to develop local support for entrepreneurs organically, rather than, for example, building a shiny new incubator building.

The job's not done. New Orleans still doesn't have the sophisticated investors that help make Boulder and Austin attractive places to start companies. Williamson says no venture capital firm has an office in the city, and many of the angel investors are funding companies for the first time. But more than a decade's work has created an environment more welcoming to innovators and entrepreneurs. It's welcoming enough that iSeatz, a homegrown tech company that left for New York after Katrina, moved its headquarters back to NOLA in 2007. "There's a belief now that New Orleans is a great, supportive environment," Williamson says. "People don't leave when they get funded."

Along with the move, Obama asked Congress for authority to shuffle the executive branch's org chart, consolidating six agencies (including the Small Business Administration) that deal with trade and commerce.

SBA Administrator Karen Mills will join the cabinet, meeting with the president alongside the secretaries of Treasury, Labor, Defense, and other executive departments. The move requires no approval from Congress, according to SBA spokeswoman Hayley Meadvin.

Obama also asked Congress to give him the power to merge the following agencies:

• The core business and trade functions of the Commerce Department
• U.S. Trade Representative
• Export-Import Bank
• Overseas Private Investment Corp
• Trade and Development Agency
• Small Business Administration

The new agency would encompass four areas: trade and investment; small business and economic development; technology and innovation (including the Patent and Trademark Office); and statistics (bringing together the Census Bureau, the Bureau of Economic Analysis, and the Bureau of Labor Statistics).

"By doing this we will serve businesses, especially small businesses, much better," said Jeff Zients, deputy director at the Office of Management and Budget who also holds the title of federal chief performance officer. "This consolidated department will have one website, one telephone number, and one mission ... to make it much easier for small businesses and help American businesses succeed," he told reporters on a conference call today.

The move is more symbolic than substantial, says Bob Litan, who worked in the Office of Management and Budget during the Clinton Administration and is now vice-president for Research and Policy at the Kauffman Foundation. "Government mergers are no better than corporate mergers," he says. Promises that consolidation will make the organization more efficient rarely materialize in the private sector and probably won't in this case either, Litan says. He says Congress is unlikely to give Obama the authority to make the changes anyway. "The major reason [for the announcement] is for them to have the symbolic effort to show that they're trying to save taxpayer money and streamline the government."

It's not clear what the new department would be called, or who would lead it. The Secretary of Commerce, John Bryson, is already a cabinet member, as is the U.S. Trade Representative, Ron Kirk.

The move to streamline bureaucracy follows a report last year from the non-partisan Government Accountability Office that detailing how different arms of the government duplicate efforts. For example, there are 80 programs across four agencies that deal with economic development.

The consolidation will save $3 billion over 10 years and eliminate 1,000 to 2,000 jobs through attrition, Zients said.

Interest in social enterprise has grown in recent years. The movement has given rise to a slew of investors, incubators, networking groups, and other organizations dedicated to helping mission-driven entrepreneurs succeed. Policymakers, too, are recognizing approaches that combine business methods with social missions. Seven states have passed laws creating new legal structures that give companies more leeway to consider social and environmental missions over financial returns.

While definitions of social entrepreneurship vary, for purposes of this roundup, we are searching for for-profit, scalable companies that exist to solve societal problems. We want businesses with social missions baked into their operations, not tacked on as extras. We want companies that can demonstrate results, both in the marketplace and in their missions. That means we'll only consider companies that will disclose their annual revenues. We're seeking for-profit companies based in the U.S., doing business here or abroad, that meet these criteria.

Submit your company or another you know of using the form below. We'll take suggestions through Feb. 9. Know that there is no need to submit the same company more than once. This spring, we'll post profiles of the 25 our reporters and editors find most promising. Then we'll ask you to vote for the one you find most promising, and announce the five that get the most votes. (For a look at last year's roundup, flip through this slide show.)

(Photographer: Thomas Barwick/Getty Images)

Steve Case and Scott Case dropped by the Bloomberg offices in New York yesterday afternoon to talk up their Startup America Partnership as it nears its one-year anniversary. (The Cases are unrelated: Steve is best known as co-founder of AOL (AOL); Scott as founding chief technology officer of Priceline (PCLN).) They've been leading a push to get Corporate America and government policymakers to better understand the difference between small businesses and startups aiming for exponential growth--and better support the latter.

Grasping the nuance is crucial, Steve says, because "if you care about the economy...the place to focus is high-growth companies." He notes that Kauffman Foundation data show 40 million jobs were created in the last three decades by these high-growth companies, "which they say accounts for all the net job creation." There's one big problem, though, he adds. "In the last five years the number of new startups is down 23 percent. If it had stayed at the same level, we'd have two million more jobs in the economy."

Steve explains startups' job-creating promise isn't always clear to policymakers in Washington, D.C.: "[They] don't differentiate between big business (Fortune 500), small business (Main Street America, restaurants, dry cleaners, so forth), and high-growth companies. Obviously, big companies account for a lot of jobs; they're important. Small business account for a lot of jobs; they're important. But it's these high-growth companies that account for all the net job growth."

Beyond this push for enlightenment, the Cases want the Startup America initiative to serve as a practical tool for entrepreneurs who can benefit from private sector largesse (free legal and accounting services, for example), industry expertise, and professional connections.

While only about 2,200 startups have signed up to use the resources available through Startup America's site, Scott says corporations including Dell, Google, and Microsoft have pledged about $1.2 billion in services for participating companies. He aims to get 100,000 startups to sign up by April by prodding supporters to recruit from within their own circles and corporate partners to push their customers to join. He estimates there are 1.5 million to 1.8 million U.S. companies that fit within the high-growth rubric that could benefit.

By the summer, Scott wants to release data showing how participants are faring. For now, though, he says he's most concerned with helping founders and prompting would-be supporters to recognize that growth companies are a different breed.

"At the personal level, [entrepreneurs running high-potential ventures] are different people; they have a different mindset...[they] think that they're going to disrupt the world or create a whole new market," says Scott. "But that process, that churning out there in the unknown is what creates these blockbuster high-growth companies that pop out of seemingly nowhere. We need more of that in this country. And we need everybody that's around those companies to recognize them, because that's where huge opportunity lies."

Photographer: Charles Dharapak/AP

Smaller businesses that use off-the-shelf software or prepare pay stubs by hand would also face difficulty complying with late changes.

"It's a complication in the employer's life and I think the smaller employers are the ones who are going to feel the confusion more directly," said Abe Schneier, a senior technical manager at the American Institute of Certified Public Accountants in Washington.

People who work for themselves and pay both the employer and employee sides of the tax will have trouble ensuring they make the correct quarterly estimated tax payments, he said.

Schneier said he thought that large payroll providers would face complications, though would largely be able to manage the changes.

For anyone tallying Congressional ironies, the same House Republicans who so often profess to love small business and tax cuts scuttled the compromise to extend the tax cut that both parties in the Senate agreed to last week. In doing so, they may have created a payroll headache for Main Street employers. Congress's approval rating this month: a record low 11 percent.

The agreement would gradually increase the annual set asides for the programs and extend them through Sept. 2017. Congress could approve it this week and tack it onto the fiscal 2012 defense budget bill.

Some of the highlights of the deal, from the Committee's press release:

• Allows for greater participation among small businesses with significant private capital support, increasing venture capital participation to 25% for the National Institutes of Health, the Department of Energy, and the National Science Foundation and 15% for the other participating federal agencies;

• Increases both Phase I and Phase II award levels, which have not been raised since 1982. The award guidelines for SBIR and STTR awards are increased from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II, allowing for an additional Phase II on the same project should it be especially promising;

• Increases the SBIR program allocation from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent over the course of the reauthorization, which allows more access for small businesses to compete for R&D funds;

Karen E. Klein detailed what had been holding up the programs' reauthorization in a piece a few months ago:

The programs, which were established nearly 30 years ago and must be reauthorized about once a decade, funneled about $2.2 billion to small companies in fiscal 2011. While they generally receive bipartisan support, the programs have come close to expiring and been extended on a short-term basis a dozen times since 2008, with the latest quick fix taking place last May.

At issue in long-term reauthorization is whether the programs should be open to small businesses majority-owned by venture capital and hedge funds, an idea pushed by biotech and venture capital groups and their allies in Congress, but opposed by independent small business advocates, who fear that non-venture-capital-backed companies would lose out in the competition for government dollars.