I 112th CONGRESS 1st Session H. R. 2872 IN THE HOUSE OF REPRESENTATIVES September 8, 2011 Ms. Velázquez introduced the following bill; which was referred to the Committee on Small Business A BILL To amend the Small Business Investment Act of 1958 to improve the New Markets Venture Capital Program, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Job Creation and Urban Revitalization Act of 2011. (b)

Table of contents

The table of contents for this Act is as follows: Sec. 1. Short title; table of contents. Sec. 2. Increased investment in job creating small business concerns. Sec. 3. Updating definition of low-income geographic area. Sec. 4. Expanded uses for operational assistance for small business concerns located in areas of high unemployment. Sec. 5. Definition of area of high unemployment. Sec. 6. Nationwide distribution of companies to generate new employment opportunities. Sec. 7. Limitation on time for final approval. Sec. 8. Elimination of matching requirement for areas with high unemployment and areas designated as an urban manufacturing revitalization area. Sec. 9. Urban manufacturing revitalization areas. Sec. 10. Simplified formula for operational assistance grants. Sec. 11. Expanding operational assistance to conditionally approved companies. Sec. 12. Authorization of appropriations. Sec. 13. Streamlined application for New Markets Venture Capital Program.

2.

Increased investment in job creating small business concerns

(a)

Developmental venture capital and participation agreements

Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689) is amended— (1)in paragraph (1) by inserting after geographic areas the following: or encouraging the growth or continuation of small business concerns located in areas of high unemployment; and (2)in paragraph (6)(B) by inserting after geographic areas the following: or in small business concerns located in areas of high unemployment. (b)

Purposes

Section 352 of the Small Business Investment Act of 1958 (15 U.S.C. 689a) is amended— (1)by striking paragraph (1) and inserting the following: (1)to promote economic development in low-income geographic areas and to create job opportunities in areas of high unemployment by encouraging developmental venture capital investments in smaller enterprises and small business concerns primarily located in such areas; and ; and (2)in paragraph (2)— (A)in the matter preceding subparagraph (A) by inserting after geographic areas the following: and small business concerns located in areas of high unemployment; (B)in subparagraph (B) by inserting after geographic areas the following: or in small business concerns located in areas of high unemployment; and (C)in subparagraph (C) by inserting after smaller enterprises the following: and small business concerns. (c)

Eligibility, applications, and requirements for final approval

Section 354 of the Small Business Investment Act of 1958 (15 U.S.C. 689c) is amended— (1)in subsection (a)(3) by inserting after geographic areas the following: or investing in small business concerns located in areas of high unemployment; (2)in subsection (b)— (A)in paragraph (1) by inserting after geographic areas the following: or in small business concerns located in areas of high unemployment; and (B)in paragraph (4) by inserting after smaller enterprises the following: or small business concerns; and (3)in subsection (d)— (A)in paragraph (1)— (i)by striking Each and inserting the following: (A)

In general

Except as provided in subparagraphs (B) and (C), each ; and (ii)by adding at the end the following: (B)

Small business concerns located in areas of high unemployment

Each conditionally approved company engaged primarily in development of and investment in small business concerns located in areas of high unemployment shall raise not less than $3,000,000 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. ; and (B)in paragraph (2)(A) by inserting after smaller enterprises the following: or small business concerns. (d)

Operational assistance grants

Section 358 of the Small Business Investment Act of 1958 (15 U.S.C. 689g) is amended— (1)in subsection (a)(1) by inserting after smaller enterprises the following: and small business concerns; and (2)in subsection (b)(1) by inserting after smaller enterprises the following: and small business concerns.

3.

Updating definition of low-income geographic area

Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689), as amended by section 2 of this Act, is further amended— (1)by striking paragraphs (2) and (3); (2)by inserting after paragraph (1) 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(e) of the Internal Revenue Code of 1986, except that, without regard to that meaning, the term includes an area of high unemployment. ; and (3)by redesignating paragraphs (4) through (8) as paragraphs (3) through (7), respectively.

4.

Expanded uses for operational assistance for small business concerns located in areas of high unemployment

Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689), as amended by this Act, is further amended in paragraph (4) (as so redesignated by section 3 of this Act) by inserting after business development the following: and, with respect to a small business concern located in an area of high unemployment, assistance that assists the concern with retooling, updating, or replacing machinery or equipment.

5.

Definition of area of high unemployment

Section 351 of the Small Business Investment Act of 1958 (15 U.S.C. 689), as amended by this Act, is further amended by adding at the end the following: (8)

Area of high unemployment

The term area of high unemployment means a geographic area that the Administrator determines has an unemployment rate that exceeds the national unemployment rate. .

6.

Nationwide distribution of companies to generate new employment opportunities

Paragraph (3) of section 354(c) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(c)) is amended to read as follows: (3)

Geographic expansion

In selecting companies under paragraph (1), the Administrator shall consider the need to promote investment nationwide and shall, to the extent practicable, select at least 1 company from each geographic region of the Small Business Administration. .

7.

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 in the matter preceding paragraph (1) by striking a period of time, not to exceed 2 years, and inserting 2 years.

8.

Elimination of matching requirement for areas with high unemployment and areas designated as an urban manufacturing revitalization area

Section 354(d)(2)(A)(i)(III) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)(III)) is amended by inserting after under paragraph (1) the following: , except that this subclause shall not apply to a company the Administrator determines is primarily serving small business concerns located in an area of high unemployment or in an area designated as an urban manufacturing revitalization area under subsection (f).

9.

Urban manufacturing revitalization areas

(a)

In general

Section 354 of the Small Business Investment Act of 1958 (15 U.S.C. 689c), as amended by this Act, is further amended by adding at the end the following: (f)

Urban manufacturing revitalization areas

(1)

In general

In approving companies under this section to participate in the New Markets Venture Capital Program, the Administrator may approve a company to serve, throughout all States, solely small business concerns located in areas designated as an urban manufacturing revitalization area under paragraph (2). (2)

Designation

For purposes of paragraph (1), the Administrator may designate an area as an urban manufacturing revitalization area if— (A)the area is a low-income geographic area; (B)the Administrator determines the area is an urban area; and (C)the Administrator determines there is, or was during the preceding 10-year period, a substantial presence of businesses in the area the primary business of which is classified in sector 31, 32, or 33 of the North American Industrial Classification System. (3)

Consideration

In approving a company under paragraph (1), the Administrator shall give priority to a company that demonstrates a strong commitment to and experience in revitalizing and redeveloping urban areas through investment in and the provision of management and technical assistance to small business concerns in those areas. (4)

Coordination

The Administrator shall work to coordinate and make available to small business concerns served by a company approved under paragraph (1) the resources provided under the entrepreneurial development, contracting, and financing programs of the Administration. (5)

Increasing procurement opportunities

The Administrator shall designate at least 1 procurement center representative or commercial market representative to identify procurement opportunities for small business concerns served by a company approved under paragraph (1). . (b)

Capital requirement

Section 354(d)(1) of the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)(1)) is amended by adding at the end the following: (C)

Small business concerns located in urban manufacturing revitalization areas

Each conditionally approved company engaged primarily in development of and investment in small business concerns located in areas designated as urban manufacturing revitalization areas under subsection (f) shall raise not less than $2,000,000 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. .

10.

Simplified formula for operational assistance grants

Subparagraph (A) of section 358(a)(4) of the Small Business Investment Act of 1958 (15 U.S.C. 689g(a)(4)) is amended— (1)by striking shall be equal to and all that follows through the period at the end and 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. .

11.

Expanding operational assistance to conditionally approved companies

Section 358(a) of the Small Business Investment Act of 1958 (15 U.S.C. 689g(a)) is amended by adding at the end the following: (6)

Grants to conditionally approved companies

(A)

In general

Subject to the provisions of this paragraph, upon the request of a company conditionally approved under section 354(c), the Administrator is authorized to make a grant to the company under this subsection. (B)

Repayment by companies not approved

If a company receives a grant under this paragraph and does not receive final approval under section 354(e), 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 this paragraph and receives final approval under section 354(e), the Administrator shall deduct the amount of such grant from the amount of any immediately succeeding grant the company receives for operational assistance. (D)

Amount of grant

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

12.

Authorization of appropriations

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 2012 and 2013; (2)in paragraph (1)— (A)by striking $150,000,000 and inserting $75,000,000; and (B)by inserting before the period at the end the following: , of which not less than 50 percent shall be used to guarantee debentures of companies primarily serving small business concerns located in areas of high unemployment; and (3)in paragraph (2)— (A)by striking $30,000,000 and inserting $15,000,000; and (B)by inserting before the period at the end the following: , of which not less than 50 percent shall be used to make grants to companies primarily serving small business concerns located in areas of high unemployment.

13.

Streamlined application for New Markets Venture Capital Program

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