II 109th CONGRESS 2d Session S. 3680 IN THE SENATE OF THE UNITED STATES July 18, 2006 Mr. Kerry introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship A BILL To amend the Small Business Investment Act of 1958 to reauthorize and expand the New Markets Venture Capital Program, and for other purposes.
1.
Short title
This Act may be cited as the Securing Equity for the Economic Development of Low Income Areas Act of 2006.
2.
Definitions
In this Act— (1)the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively; (2)the term low-income geographic area has the same meaning as in section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689), as amended by this Act; (3)the term New Markets Venture Capital company has the same meaning as in section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689); and (4)the term New Markets Venture Capital Program means the program under part B of title III of the Small Business Investment Act of 1958 (15 U.S.C. 689 et seq.).
3.
Expansion of New Markets Venture Capital Program
(a)
Selection of companies in each geographic region
Section 354 of the Small Business Investment Act of 1958 (15 U.S.C. 689c) is amended by adding at the end the following: (f)
Geographic requirement
In selecting companies to participate as New Markets Venture Capital companies in the program established under this part, the Administrator shall select, to the extent practicable, from among companies submitting applications under subsection (b), not fewer than 1 company from each geographic region of the Administration. . (b)
Participation in New Markets Venture Capital Program
(1)
Administration participation required
Section 353 of the Small Business Investment Act of 1958 (15 U.S.C. 689b) is amended in the matter preceding paragraph (1), by striking under which the Administrator may and inserting under which the Administrator shall. (2)
Small manufacturer participation agreements required
Section 353 of the Small Business Investment Act of 1958 (15 U.S.C. 689b) is amended— (A)by striking In accordance with this part, and inserting the following: (a)
In general
In accordance with this part, ; (B)in subsection (a)(1), as so designated by this paragraph, by inserting after section 352 the following: (with not fewer than 1 such agreement to be with a company engaged primarily in development of and investment in small manufacturers, to the extent practicable); and (C)by adding at the end the following: (b)
Rule of construction
Subsection (a)(1) shall not be construed to authorize the Administrator to decline to enter into a participation agreement with a company solely on the basis that the company is not engaged primarily in development of and investment in small manufacturers. .
4.
Report to Congress
Not later than 1 year after the date of enactment of this Act, the Administrator shall submit to Congress a report evaluating the success of the New Markets Venture Capital Program in promoting economic development and creating wealth and job opportunities in low-income geographic areas, among individuals living in such areas, by encouraging developmental venture capital investments in smaller enterprises.
5.
Establishment of Office of New Markets Venture Capital
Title II of the Small Business Investment Act of 1958 (15 U.S.C. 671) is amended by adding at the end the following:
202.
Office of New Markets Venture Capital
(a)
Establishment
There is established in the Investment Division of the Administration, the Office of New Markets Venture Capital. (b)
Director
The Office of New Markets Venture Capital shall be headed by a Director, who shall be appointed by the Administrator. (c)
Responsibilities of Director
Subject to the direction and control of the Administrator, the responsibilities of the Director of the Office of New Markets Venture Capital are— (1)to administer the New Markets Venture Capital Program under part B of title III; (2)to periodically assess the nature and scope of the New Markets Venture Capital Program and to advise the Administrator on recommended changes to the program, based on such assessment; (3)to work to expand the number of small business concerns participating in the New Markets Venture Capital Program; (4)to encourage investment in small manufacturing; and (5)to perform such other duties relating to such responsibilities as the Administrator may provide.
.
6.
Low-income geographic areas
(a)
Modification of definition of low-income geographic area for purposes of New Markets Venture Capital Program
(1)
In general
Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689) is amended— (A)by striking paragraphs (2) and (3) and inserting the following: (2)
Low-income geographic area
The term low-income geographic area has the meaning given the term low-income community in section 45D of the Internal Revenue Code of 1986 (relating to the new markets tax credit). ; and (B)by redesignating paragraphs (4) through (8) as paragraphs (3) through (7), respectively. (2)
Retroactive application of amended definition to capital requirement
The definition of a low-income geographic area in section 351(2) of the Small Business Investment Act of 1958, as amended by paragraph (1), shall apply to private capital raised under section 354(d)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)(1)) before, on, or after the date of enactment of this Act. (b)
Study on availability of equity capital
(1)
Study required
Not later than the end of the 180-day period beginning on the date of enactment of this Act, the Chief Counsel for Advocacy of the Administration shall conduct a study on the availability of equity capital in low-income geographic areas. (2)
Report
Not later than 90 days after the completion of the study under paragraph (1) the Administrator shall submit to Congress a report containing the findings of the study required under paragraph (1) and any recommendations of the Administrator based on such study.
7.
Limitation on time for final approval of companies
Section 354(d) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)) is amended by striking a period of time, not to exceed 2 years, and inserting 2 years.
8.
Applications for New Markets Venture Capital Program
Not later than 60 days after the date of enactment of this Act, the Administrator shall prescribe standard documents for an application for final approval by a New Markets Venture Capital company under section 354(e) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(e)). The Administrator shall ensure that such documents are designed to substantially reduce the cost burden of the application process on a company making such an application.
9.
Operational assistance grants
Section 358(a)(4)(A) of the Small Business Investment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) is amended to read as follows: (A)
New markets venture capital companies
Notwithstanding section 354(d)(2), the amount of a grant made under this subsection to a New Markets Venture Capital company shall be equal to the lesser of— (i)10 percent of the private capital raised by the company; or (ii)$1,000,000. .
10.
Authorization of appropriations
(a)
Reauthorization of New Markets Venture Capital Program
Section 368(a) of the Small Business Investment Act of 1958 (15 U.S.C. 689q(a)) is amended in the matter preceding paragraph (1), by striking fiscal years 2001 through 2006 and inserting fiscal years 2006 through 2009. (b)
Office of New Markets Venture Capital
There is authorized to be appropriated to carry out section 202 of the Small Business Investment Act of 1958, as added by this Act, $1,000,000.