Short title

This Act may be cited as the

Securing Equity for the Economic Development of Low Income Areas Act of 2009

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. 689b) is amended by adding at the end the following new subsection:

(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), at least one company from each geographic region of the Small Business 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 by striking under which the Administrator may and inserting under which the Administrator shall. (2)

Small manufacturer participation agreements required

Such section, as amended by paragraph (1), is further amended, by inserting after section 352 the following: (with at least one such agreement to be with a company engaged primarily in development of and investment in small manufacturers, to the extent practicable). (c)

Report to Congress

Not later than 1 year after the date of the enactment of this Act, the Administrator of the Small Business Administration shall submit to Congress a report evaluating the success of the expansion of the New Markets Venture Capital Program under this section.

Establishment of office of new markets venture capital

(a)

In General

Title II of the Small Business Investment Act of 1958 (15 U.S.C. 671 et seq.) is amended by adding at the end the following new section:

202.

Office of New Markets Venture Capital

(a)

Establishment

There is hereby established in the Investment Division of the Small Business Administration an office to be known as 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 as follows: (1)To administer the New Markets Venture Capital Program. (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. (5)To perform such other duties relating to such responsibilities as the Administrator may provide.

(b)

Authorization of Appropriations

There is authorized to be appropriated $1,000,000 to carry out this section.

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(3)(A)(ii)(I) of the Small Business Investment Act of 1958 (15 U.S.C. 689(3)(A)(ii)(I)) is amended by striking 50 percent and all that follows through the end and inserting the median family income in that tract does not exceed 80 percent of the greater of the statewide median family income or the metropolitan area median family income; or. (2)

Application of amended definition to capital requirement

The definition of low-income geographic area in section 351(3) of the Small Business Investment Act of 1958 (15 U.S.C. 689(3)), as amended by subsection (a), 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 effective date of the amendment made by subsection (a). (b)

Study on Availability of Equity Capital

(1)

Study required

Before the expiration of the 180-day period that begins on the date of the enactment of this Act, the Chief Counsel for Advocacy of the Small Business Administration shall conduct a study on the availability of equity capital in low-income urban and rural 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.

Conditionally approved companies

(a)

Operational Assistance Grants to Conditionally Approved Companies

Section 358(a) of the Small Business Investment Act of 1958 (15 U.S.C. 689(a)) is amended by adding at the end the following new paragraph:

(6)

Grants to conditionally approved companies

(A)

In general

Subject to subparagraphs (A) and (B), upon the request of a company conditionally approved under section 354(c), the Administrator shall make a grant to the company under this subsection. (B)

Repayment by companies not approved

If a company receives a grant under paragraph (6) and does not enter into a participation agreement for final approval, the company shall repay the amount of the grant to the Administrator. (C)

Deduction from grant to approved company

If a company receives a grant under paragraph (6) and receives final approval under section 354(e), the Administrator shall deduct the amount of the grant under that paragraph from the total grant amount that the company receives for operational assistance. (D)

Amount of grant

No company may receive a grant of more than $50,000 under this paragraph.

(b)

Limitation on Time for Final Approval

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.

Applications for new markets venture capital program

Not later than 60 days after the date of the enactment of this section, the Administrator shall prescribe standard documents for final New Markets Venture Capital Company approval application under section 354(e) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(e)). The Administrator shall assure that the standard documents shall be designed to substantially reduce the cost burden of the application process on the companies involved.

Elimination of matching requirement

Section 354(d)(2)(A)(i) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amended— (1)in subclause (I) by adding and at the end; (2)in subclause (II) by striking and at the end; and (3)by striking subclause (III).

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— (1)by striking shall be equal to and all that follows through the period at the end and by inserting shall be equal to the lesser of—; and (2)by adding at the end the following:

(i)10 percent of the resources (in cash or in kind) raised by the company under section 354(d)(2); or (ii)$1,000,000.

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— (1)by striking fiscal years 2001 through 2006 and inserting fiscal years 2009 through 2011; (2)in paragraph (1), by striking $150,000,000 and inserting $100,000,000; and (3)in paragraph (2), by striking $30,000,000 and inserting $25,000,000. (b)

Authorization for Manufacturing and Regional New Markets Venture Capital Companies

There is authorized to be appropriated $1,000,000, to be available until expended, to carry out section 354(f) of the Small Business Investment Act of 1958, as added by section 2, and to enter into participation agreements with companies engaged primarily in development of and investment in small manufacturers under section 353(1) of such Act, as amended by section 2.