[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1662 Reported in Senate (RS)]






                                                       Calendar No. 422
110th CONGRESS
  1st Session
                                S. 1662

                          [Report No. 110-199]

 To amend the Small Business Investment Act of 1958 to reauthorize the 
            venture capital program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 19, 2007

 Mr. Kerry (for himself and Ms. Snowe) introduced the following bill; 
 which was read twice and referred to the Committee on Small Business 
                          and Entrepreneurship

                            October 16, 2007

                Reported by Mr. Kerry, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
 To amend the Small Business Investment Act of 1958 to reauthorize the 
            venture capital program, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Small Business Venture 
Capital Act of 2007''.</DELETED>

<DELETED>SEC. 2. REAUTHORIZATION.</DELETED>

<DELETED>    Section 20 of the Small Business Act (15 U.S.C. 631 note) 
is amended by inserting after subsection (e) the following:</DELETED>
<DELETED>    ``(f) Small Business Venture Capital.--For the programs 
authorized under part A of title III of the Small Business Investment 
Act of 1958 (15 U.S.C. 681 et seq.), the Administrator is authorized to 
make--</DELETED>
        <DELETED>    ``(1) $500,000,000 in purchases of participating 
        securities for each of fiscal years 2007 through 2010; 
        and</DELETED>
        <DELETED>    ``(2)(A) $2,000,000,000 in guarantees of 
        debentures for fiscal year 2007;</DELETED>
        <DELETED>    ``(B) $2,250,000,000 in guarantees of debentures 
        for fiscal year 2008;</DELETED>
        <DELETED>    ``(C) $2,500,000,000 in guarantees of debentures 
        for fiscal year 2009; and</DELETED>
        <DELETED>    ``(D) $2,775,000,000 in guarantees of debentures 
        for fiscal year 2010.''.</DELETED>

<DELETED>SEC. 3. LEVERAGE.</DELETED>

<DELETED>    (a) In General.--Section 303(b)(2) of the Small Business 
Investment Act of 1958 (15 U.S.C. 683(b)(2)) is amended to read as 
follows:</DELETED>
        <DELETED>    ``(2) Maximum leverage.--</DELETED>
                <DELETED>    ``(A) In general.--The maximum amount of 
                outstanding leverage made available to any 1 company 
                licensed under section 301(c) may not exceed the lesser 
                of--</DELETED>
                        <DELETED>    ``(i) 300 percent of private 
                        capital; or</DELETED>
                        <DELETED>    ``(ii) $150,000,000.</DELETED>
                <DELETED>    ``(B) Multiple licenses under common 
                control.--The maximum amount of outstanding leverage 
                made available to 2 or more companies licensed under 
                section 301(c) that are commonly controlled (as 
                determined by the Administrator) may not exceed 
                $225,000,000.</DELETED>
                <DELETED>    ``(C) Investments in women-owned and 
                minority-owned businesses and in low-income geographic 
                areas.--</DELETED>
                        <DELETED>    ``(i) In general.--The maximum 
                        amount of outstanding leverage made available 
                        to--</DELETED>
                                <DELETED>    ``(I) any 1 company 
                                described in clause (ii) may not exceed 
                                the lesser of--</DELETED>
                                        <DELETED>    ``(aa) 300 percent 
                                        of private capital; 
                                        or</DELETED>
                                        <DELETED>    ``(bb) 
                                        $175,000,000; and</DELETED>
                                <DELETED>    ``(II) 2 or more companies 
                                described in clause (ii) that are 
                                commonly controlled (as determined by 
                                the Administrator) may not exceed 
                                $250,000,000.</DELETED>
                        <DELETED>    ``(ii) Applicability.--A company 
                        described in this clause is a company licensed 
                        under section 301(c) that certifies in writing 
                        that not less than 50 percent of the dollar 
                        amount of investments of that company shall be 
                        made in companies that, prior to that 
                        investment, are owned by women or minorities 
                        (as determined by the Administrator) or are 
                        located in a low-income geographic area (as 
                        that term is defined in section 351).</DELETED>
                        <DELETED>    ``(iii) Exception.--The 
                        Administrator may, on a case-by-case basis, 
                        impose such additional terms and conditions as 
                        the Administrator determines to be appropriate 
                        to minimize the risk of loss to the 
                        Administration in the event of a 
                        default.''.</DELETED>
<DELETED>    (b) Technical and Conforming Amendments.--Section 303(b) 
of the Small Business Investment Act of 1958 (15 U.S.C. 683(b)) is 
amended by striking paragraph (4).</DELETED>

<DELETED>SEC. 4. INVESTMENTS IN SMALLER ENTERPRISES.</DELETED>

<DELETED>    Section 303(d) of the Small Business Investment Act of 
1958 (15 U.S.C. 683(d)) is amended to read as follows:</DELETED>
<DELETED>    ``(d) Investments in Smaller Enterprises.--The 
Administrator shall require each licensee, as a condition of an 
application for leverage, to certify in writing that not less than 25 
percent of the aggregate dollar amount of financings of that licensee 
shall be provided to smaller enterprises.''.</DELETED>

<DELETED>SEC. 5. PRIVATE CAPITAL.</DELETED>

<DELETED>    (a) In General.--Section 103(9)(A)(ii) of the Small 
Business Investment Act of 1958 (15 U.S.C. 662(9)(A)(ii)) is amended by 
inserting ``, for any company licensed under section 301(c) on or after 
October 1, 2004,'' before ``leverage shall not be funded based on such 
commitments''.</DELETED>

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Venture Capital Act 
of 2007''.

SEC. 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 meaning 
        given that term 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 meaning given that term 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.).

SEC. 3. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Definitions.
Sec. 3. Table of contents.

           TITLE I--SMALL BUSINESS INVESTMENT COMPANY PROGRAM

Sec. 101. Reauthorization.
Sec. 102. Leverage.
Sec. 103. Investments in small er enterprises.
Sec. 104. Private capital.
Sec. 105. Maximum investment in a company.

             TITLE II--NEW MARKETS VENTURE CAPITAL PROGRAM

Sec. 201. Diversification of New Markets Venture Capital Program.
Sec. 202. Establishment of Office of New Markets Venture Capital.
Sec. 203. Low-income geographic areas.
Sec. 204. Applications for New Markets Venture Capital Program.
Sec. 205. Operational assistance grants.
Sec. 206. Authorization.

           TITLE I--SMALL BUSINESS INVESTMENT COMPANY PROGRAM

SEC. 101. REAUTHORIZATION.

    Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended by inserting after subsection (e) the following:
    ``(f) Small Business Venture Capital.--For the programs authorized 
under part A of title III of the Small Business Investment Act of 1958 
(15 U.S.C. 681 et seq.), the Administrator is authorized to make--
            ``(1) $500,000,000 in purchases of participating securities 
        for each of fiscal years 2007 through 2010; and
            ``(2)(A) $2,000,000,000 in guarantees of debentures for 
        fiscal year 2007;
            ``(B) $2,250,000,000 in guarantees of debentures for fiscal 
        year 2008;
            ``(C) $2,500,000,000 in guarantees of debentures for fiscal 
        year 2009; and
            ``(D) $2,750,000,000 in guarantees of debentures for fiscal 
        year 2010.''.

SEC. 102. LEVERAGE.

    (a) In General.--Section 303(b)(2) of the Small Business Investment 
Act of 1958 (15 U.S.C. 683(b)(2)) is amended to read as follows:
            ``(2) Maximum leverage.--
                    ``(A) In general.--The maximum amount of 
                outstanding leverage made available to any 1 company 
                licensed under section 301(c) may not exceed the lesser 
                of--
                            ``(i) 300 percent of private capital; or
                            ``(ii) $150,000,000.
                    ``(B) Multiple licenses under common control.--The 
                maximum amount of outstanding leverage made available 
                to 2 or more companies licensed under section 301(c) 
                that are commonly controlled (as determined by the 
                Administrator) may not exceed $225,000,000.
                    ``(C) Investments in women-owned and minority-owned 
                businesses and in low-income geographic areas.--
                            ``(i) In general.--The maximum amount of 
                        outstanding leverage made available to--
                                    ``(I) any 1 company described in 
                                clause (ii) may not exceed the lesser 
                                of--
                                            ``(aa) 300 percent of 
                                        private capital; or
                                            ``(bb) $175,000,000; and
                                    ``(II) 2 or more companies 
                                described in clause (ii) that are 
                                commonly controlled (as determined by 
                                the Administrator) may not exceed 
                                $250,000,000.
                            ``(ii) Applicability.--A company described 
                        in this clause is a company licensed under 
                        section 301(c) that certifies in writing that 
                        not less than 50 percent of the dollar amount 
                        of investments of that company shall be made in 
                        companies that, prior to that investment, are 
                        owned by women or minorities (as determined by 
                        the Administrator) or are located in a low-
                        income geographic area (as that term is defined 
                        in section 351).
                    ``(D) Exception.--The Administrator may, on a case-
                by-case basis, impose such additional terms and 
                conditions relating to the maximum amount of 
                outstanding leverage made available as the 
                Administrator determines to be appropriate to minimize 
                the risk of loss to the Administration in the event of 
                a default.''.
    (b) Technical and Conforming Amendments.--Section 303(b) of the 
Small Business Investment Act of 1958 (15 U.S.C. 683(b)) is amended by 
striking paragraph (4).

SEC. 103. INVESTMENTS IN SMALLER ENTERPRISES.

    Section 303(d) of the Small Business Investment Act of 1958 (15 
U.S.C. 683(d)) is amended to read as follows:
    ``(d) Investments in Smaller Enterprises.--The Administrator shall 
require each licensee, as a condition of an application for leverage, 
to certify in writing that not less than 25 percent of the aggregate 
dollar amount of financings of that licensee shall be provided to 
smaller enterprises.''.

SEC. 104. PRIVATE CAPITAL.

    Section 103(9)(A)(ii) of the Small Business Investment Act of 1958 
(15 U.S.C. 662(9)(A)(ii)) is amended by inserting ``, except for any 
company licensed under section 301(c) on or before September 30, 2004, 
that holds commitments from the Administration for participating 
security leverage,'' before ``leverage shall not be funded based on 
such commitments''.

SEC. 105. MAXIMUM INVESTMENT IN A COMPANY.

    Section 306(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 686(a)) is amended by striking ``20 per centum'' and inserting 
``30 percent''.

             TITLE II--NEW MARKETS VENTURE CAPITAL PROGRAM

SEC. 201. DIVERSIFICATION 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 Goal.--In selecting companies to participate as 
New Markets Venture Capital companies in the program established under 
this part, the Administrator shall have as a goal to select, from among 
companies submitting applications under subsection (b), at least 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.--Section 353(1) of 
        the Small Business Investment Act of 1958 (15 U.S.C. 689b(1)) 
        is amended by inserting after ``section 352'' the following: 
        ``(with a goal of at least 1 such agreement to be with a 
        company engaged primarily in the development of and investment 
        in small manufacturers, to the extent practicable)''.

SEC. 202. 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:

``SEC. 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 head of the Office of New Markets Venture 
Capital shall be an individual appointed in the competitive service or 
excepted service.
    ``(c) Responsibilities of Director.--The responsibilities of the 
head of the Office of New Markets Venture Capital include--
            ``(1) to administer the New Markets Venture Capital Program 
        under part B of title III;
            ``(2) to assess, not less frequently than once every 2 
        years, 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; and
            ``(4) to encourage investment in small manufacturing.''.

SEC. 203. LOW-INCOME GEOGRAPHIC AREAS.

    (a) In General.--Section 351 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689) is amended--
            (1) by striking paragraph (2);
            (2) by redesignating paragraphs (3) through (8) as 
        paragraphs (2) through (7), respectively; and
            (3) in paragraph (2), as so redesignated--
                    (A) in the matter preceding subparagraph (A)--
                            (i) by striking ``the term'' and inserting 
                        ``The term''; and
                            (ii) by striking ``means'';
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) means a `low-income community' within the 
                meaning of section 45D(e) of the Internal Revenue Code 
                of 1986 (relating to the new markets tax credit); 
                and''; and
                    (C) in subparagraph (B), in the matter preceding 
                clause (i), by inserting ``includes'' before ``any 
                area''.
    (b) Application of Amended Definition to Capital Requirement.--The 
definition of a low-income geographic area in section 351 of the Small 
Business Investment Act of 1958, as amended by subsection (a), shall 
apply to capital raised by a New Markets Venture Capital company 
before, on, or after the date of enactment of this Act.

SEC. 204. APPLICATIONS FOR NEW MARKETS VENTURE CAPITAL PROGRAM.

    Not later than 1 year 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.

SEC. 205. OPERATIONAL ASSISTANCE GRANTS.

    (a) In General.--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.''.
    (b) Conforming Amendment and 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 to read as follows:
    ``(d) Requirements To Be Met for Final Approval.--The Administrator 
shall grant each conditionally approved company 2 years to raise not 
less than $5,000,000 of private capital or binding capital commitments 
from one or more investors (other than agencies or departments of the 
Federal Government) who met criteria established by the 
Administrator.''.

SEC. 206. AUTHORIZATION.

    Section 368(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 689q(a)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``fiscal years 2001 through 2006'' and inserting ``fiscal years 
        2007 through 2010''; and
            (2) in paragraph (2), by striking ``$30,000,000'' and 
        inserting ``$20,000,000''.
                                                       Calendar No. 422

110th CONGRESS

  1st Session

                                S. 1662

                          [Report No. 110-199]

_______________________________________________________________________

                                 A BILL

 To amend the Small Business Investment Act of 1958 to reauthorize the 
            venture capital program, and for other purposes.

_______________________________________________________________________

                            October 16, 2007

                       Reported with an amendment