SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Save America's Biotechnology 
Innovative Research Act of 2005'' or ``SABIR Act''.

SEC. 2. ELIGIBILITY FOR PARTICIPATION IN SMALL BUSINESS INNOVATION 
              RESEARCH PROGRAM.

    (a) In General.--Section 9 of the Small Business Act (15 U.S.C. 
638) is amended by adding at the end the following new subsection:
    ``(x) Eligibility for Participation in SBIR Program.--
            ``(1) In general.--To be eligible to receive an award under 
        the SBIR program, a business concern--
                    ``(A) shall have not more than 500 employees; and
                    ``(B) shall be owned in accordance with one of the 
                ownership requirements described in paragraph (2).
            ``(2) Ownership requirements.--The ownership requirements 
        referred to in paragraph (1) are the following:
                    ``(A) The business concern is--
                            ``(i) at least 51 percent owned and 
                        controlled by individuals or eligible venture 
                        capital companies, who are citizens of or 
                        permanent resident aliens in the United States; 
                        and
                            ``(ii) not more than 49 percent owned and 
                        controlled by a single eligible venture capital 
                        company (or group of commonly-controlled 
                        eligible venture capital companies).
                    ``(B) The business concern is at least 51 percent 
                owned and controlled by another business concern that 
                is itself at least 51 percent owned and controlled by 
                individuals who are citizens of or permanent resident 
                aliens in the United States.
                    ``(C) The business concern is a joint venture in 
                which each entity to the joint venture meets one of the 
                ownership requirements under this paragraph.
            ``(3) Employee defined.--For purposes of paragraph (1)(A), 
        the term `employee' means an individual employed by the 
        business concern and does not include--
                    ``(A) an individual employed by an eligible venture 
                capital company providing financing to the business 
                concern; or
                    ``(B) an individual employed by any entity in which 
                the eligible venture capital company is invested other 
                than that business concern.
            ``(4) Treatment of other forms of ownership.--
                    ``(A) Stock option ownership.--For purposes of this 
                subsection, in the case of a business concern owned in 
                whole or in part by an employee stock option plan, each 
                stock trustee or plan member shall be deemed to be an 
                owner.
                    ``(B) Trust ownership.--For purposes of this 
                subsection, in the case of a business concern owned in 
                whole or in part by a trust, each trustee or trust 
                beneficiary shall be deemed to be an owner.
            ``(5) Exception for start-up concerns.--Notwithstanding 
        paragraphs (1) through (4), any business concern that is a 
        start-up concern shall be eligible to receive funding under the 
        SBIR program.''.
    (b) Definitions.--Section 9(e) of the Small Business Act (15 U.S.C. 
638(e)) is amended by adding at the end the following new paragraphs:
            ``(9) The term `eligible venture capital company' means a 
        business concern--
                    ``(A) that--
                            ``(i) is a Venture Capital Operating 
                        Company, as that term is defined in regulations 
                        promulgated by the Secretary of Labor; or
                            ``(ii) is an entity that--
                                    ``(I) is registered under the 
                                Investment Company Act of 1940 (15 
                                U.S.C. 80a-51 et seq.); or
                                    ``(II) is an investment company, as 
                                defined in section 3(c)(14) of such Act 
                                (15 U.S.C. 80a-3(c)(14)), which is not 
                                registered under such Act because it is 
                                beneficially owned by less than 100 
                                persons; and
                    ``(B) that is not controlled by any business 
                concern that is not a small business concern within the 
                meaning of section 3.
            ``(10) The term `start-up concern' means a business concern 
        that--
                    ``(A) for at least 2 of the 3 preceding fiscal 
                years has had--
                            ``(i) sales of not more than $3,000,000; or
                            ``(ii) no positive cash flow from 
                        operations; and
                    ``(B) is not formed to acquire any business concern 
                other than a small business concern that meets the 
                requirement under subparagraph (A).''.
    (c) Regulations.--Before the date that is 90 days after the date of 
the enactment of this Act, the Administrator of the Small Business 
Administration shall--
            (1) in accordance with the exceptions to public rulemaking 
        under section 553(b)(A) and (B) of title 5, United States Code, 
        promulgate regulations to implement the provisions of this Act;
            (2) publish in the Federal Register a notification of the 
        changes in eligibility for participation in the Small Business 
        Innovation Research program made by this Act; and
            (3) communicate such changes to Federal agencies that award 
        grants under the Small Business Innovation Research program.
    (d) Effective Date.--The amendments made by this Act shall apply 
with respect to any business concern that participates in the Small 
Business Innovation Research program on or after the date of the 
enactment of this Act.
Output: Save America's Biotechnology Innovative Research Act of 2005 or SABIR Act - Amends provisions of the Small Business Act relating to the Small Business Innovation Research (SBIR) Program (a program under which a portion of a Federal agency's research or research and development funds are reserved for award to small businesses) to require a small business, in order to be SBIR-eligible, to have no more than 500 employees and be one of the following; (1) at least 51 percent owned and controlled by individuals or eligible venture capital companies who are U.S. citizens or permanent resident aliens; (2) not more than 49 percent owned and controlled by a single eligible venture capital company; (3) at least 51 percent owned and controlled by another business that is itself at least 51 percent owned and controlled by U.S. Citizens or permanent resident aliens; or (4) a joint venture in which each entity meets one of these ownership requirements.