Early-stage business investment and incubation grant program

(a)

Establishment

Not later than 60 days after the date of enactment of this Act, the Secretary of Commerce shall establish an early-stage business investment and incubation grant program (in this section referred to as the program) to support the development of early-stage businesses in targeted industries. (b)

Grant authority

(1)

In general

In carrying out the program, the Secretary is authorized to make grants to covered business incubators. (2)

Grant amounts

(A)

Non-Federal capital limitation

A grant made to a covered business incubator under the program may not be in an amount that exceeds the amount of the incubator’s capital that— (i)is not from a Federal source; and (ii)is available for investment and incubation services on or before the date on which a grant is drawn upon. (B)

Aggregate amount limitation

The aggregate amount of all grants made to a covered business incubator under the program may not exceed $5,000,000. (c)

Grant award process

In making a grant under the program, the Secretary shall commit a grant amount to a covered business incubator and the amount of each such commitment shall remain available to be drawn upon by such incubator during the 5-year period beginning on the date on which each such commitment is first drawn upon. (d)

Use of grant

(1)

In general

A grant made under the program may be used by a covered business incubator for the following: (A)Making an investment in an early-stage business in a targeted industry. (B)Providing training, counseling, and other assistance to an early-stage business in a targeted industry to support the development of the business. (C)Providing purchased services to an early-stage business in a targeted industry. (D)Conducting due diligence activities. (E)Meeting operational expenses. (2)

Limitations

(A)

Purchased services

Not more than 20 percent of the amount of a grant made to a covered business incubator under the program may be used by the incubator to provide purchased services to an early-stage business in a targeted industry. (B)

Due diligence activities

Not more than 6 percent of the amount of a grant made to a covered business incubator under the program may be used by the incubator to conduct due diligence activities. (C)

Operational expenses

Not more than 5 percent of the amount of a grant made to a covered business incubator under the program may be used by the incubator to meet operational expenses. (3)

Designation of grant uses

In the application of a covered business incubator for a grant under the program, the incubator shall notify the Secretary of the percentage of the grant amount that will be used for each of the activities described in subparagraphs (A) through (E) of paragraph (1) and provide a detailed description of the activities to be undertaken. (e)

Grant conditions

(1)

Fund Manager

As a condition of receiving a grant under the program, a covered business incubator shall designate an individual as the fund manager for the grant amount, who shall administer and be responsible to the Secretary for information with respect to the grant amounts received. (2)

Investment committee

As a condition of receiving a grant under the program, a covered business incubator shall establish an investment committee composed of not less than 5 individuals (3 of whom may not be employed by or related to the incubator or an affiliate of the incubator) that shall— (A)review proposals for and advise the incubator on the use of grant funds; (B)provide letters of support and reference to the Secretary with respect to proposals for the use of grant funds by the incubator; and (C)submit periodic reports to the Secretary on the results of activities carried out with grant funds. (3)

Collaborator

As a condition of receiving a grant under the program, a covered business incubator shall assign to each early-stage business in a targeted industry that is assisted with grant amounts a collaborator who shall be an individual not employed by or related to the incubator or an affiliate of the incubator and who shall assist the incubator in providing support to the business. (f)

Federal share of activities

The Federal share of the cost of an activity carried out by a covered business incubator with the assistance of a grant under the program shall not exceed 75 percent of such cost. (g)

Monitoring and evaluation

(1)

In general

The Secretary shall assess the effectiveness of covered business incubators that receive a grant under the program. (2)

Data from incubators

Not later than 120 days after the date of receiving a grant under the program, a covered business incubator shall provide to the Secretary information on the activities of the incubator and on the businesses assisted under the grant, including— (A)the number of jobs created by the businesses; (B)the amount of taxes paid by the businesses and the employees of the businesses; and (C)other data that, as determined by the Secretary, may be used to measure the value of assistance under the program. (h)

Authorization of appropriations

(1)

In general

There is authorized to be appropriated to carry out the program— (A)$250,000,000 for the first full fiscal year beginning after the date of enactment of this Act; and (B)such sums as may be necessary for subsequent fiscal years. (2)

Prohibition on earmarks

None of the funds appropriated for the program may be used for a congressional earmark as defined in clause 9(e) of rule XXI of the Rules of the House of Representatives. (i)

Definitions

In this Act, the following definitions apply: (1)

Covered business incubator

The term covered business incubator means a public or private not-for-profit organization, including an academic institution, that— (A)operates a program providing assistance to early-stage business in targeted industries to support the development of those businesses; (B)has a physical location and on-site management for the program described under subparagraph (A); and (C)has procedures for selecting businesses for and graduating businesses from the program described under subparagraph (A). (2)

Due diligence activities

The term due diligence activities means activities undertaken to analyze and assess the desirability, value, and potential of an opportunity to provide assistance to an early-stage business in a targeted industry. (3)

Early-stage business in a targeted industry

The term early-stage business in a targeted industry means a small business concern that— (A)is domiciled in a State; (B)has not generated gross annual revenues exceeding $15,000,000 in any of the previous 3 years; and (C)is engaged primarily in researching, developing, manufacturing, producing, or bringing to market goods or services with respect to any of the following business sectors: (i)Agricultural technology. (ii)Energy technology. (iii)Environmental technology. (iv)Life science technology. (v)Biotechnology. (vi)Information technology. (vii)Digital media. (viii)Clean technology. (ix)Defense technology. (x)Photonics technology. (xi)Electronic technology. (xii)Semiconductor technology. (xiii)Material science technology. (xiv)Aerospace. (xv)Communications. (xvi)Transportation. (4)

Operational expenses

The term operational expenses means the costs of operating an incubator, including overhead and management expenses. (5)

Purchased services

The term purchased services means any training, counseling, or other assistance provided to an early-stage business in a targeted industry that is provided by a covered business incubator through an agreement with another entity, and not by the incubator directly. (6)

Secretary

The terms Secretary and Secretary of Commerce mean the Secretary of Commerce acting through the Assistant Secretary of Commerce for Economic Development. (7)

Small business concern

The term small business concern has the meaning given that term in section 3 of the Small Business Act (15 U.S.C. 632).