[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 753 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                 S. 753

To require the Assistant Secretary of Commerce for Economic Development 
 to establish an early-stage business investment and incubation grant 
                    program, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                April 6 (legislative day, April 5), 2011

Mrs. Gillibrand introduced the following bill; which was read twice and 
   referred to the Committee on Commerce, Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
To require the Assistant Secretary of Commerce for Economic Development 
 to establish an early-stage business investment and incubation grant 
                    program, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Early-Stage Business Investment and 
Incubation Act of 2011''.

SEC. 2. DEFINITIONS.

    In this Act:
            (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 businesses in targeted industries to 
                support the development of those businesses;
                    (B) has a physical location and on-site management 
                for the program described in subparagraph (A); and
                    (C) has procedures for selecting businesses for, 
                and graduating businesses from, the program described 
                in subparagraph (A).
            (2) Due diligence activities.--The term ``due diligence 
        activities'' means activities carried out 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 located in the United States;
                    (B) has not generated gross annual revenues 
                exceeding $15,000,000 in any of the most recent 3 
                years; and
                    (C) is engaged primarily in researching, 
                developing, manufacturing, producing, or bringing to 
                market goods or services with respect to--
                            (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; or
                            (xvi) transportation.
            (4) Operational expenses.--The term ``operational 
        expenses'' means the costs of operating a covered business 
        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 by a covered 
        business incubator through an agreement with another entity, 
        and not by the incubator directly.
            (6) 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).

SEC. 3. EARLY-STAGE BUSINESS INVESTMENT AND INCUBATION GRANT PROGRAM.

    (a) Establishment.--Not later than 60 days after the date of the 
enactment of this Act, the Assistant Secretary of Commerce for Economic 
Development (in this section referred to as the ``Assistant 
Secretary'') 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.--The Assistant Secretary may make grants to 
        covered business incubators under the Program.
            (2) Amount of grants.--
                    (A) Non-federal capital limitation.--The amount of 
                a grant made to a covered business incubator under the 
                Program may not exceed 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 the day before the grant 
                        is awarded.
                    (B) Aggregate amount limitation.--A covered 
                business incubator may receive not more than $5,000,000 
                in grants under the Program.
    (c) Use of Grant Funds.--
            (1) In general.--Subject to paragraph (2), a grant made to 
        a covered business incubator under the Program may be used by 
        the incubator--
                    (A) to make an investment in an early-stage 
                business in a targeted industry;
                    (B) to provide training, counseling, and other 
                assistance to an early-stage business in a targeted 
                industry to support the development of the business;
                    (C) to provide purchased services to an early-stage 
                business in a targeted industry;
                    (D) to conduct due diligence activities; or
                    (E) to meet operational expenses of the incubator.
            (2) Limitations.--
                    (A) Purchased services.--A covered business 
                incubator may use not more than 20 percent of the 
                amount of a grant made to the incubator under the 
                Program to provide purchased services to an early-stage 
                business in a targeted industry.
                    (B) Due diligence activities.--A covered business 
                incubator may use not more than 6 percent of the amount 
                of a grant made to the incubator under the Program to 
                conduct due diligence activities.
                    (C) Operational expenses.--A covered business 
                incubator may use not more than 5 percent of the amount 
                of a grant made to the incubator under the Program to 
                meet operational expenses of the incubator.
    (d) Applications.--A covered business incubator seeking a grant 
under the Program shall submit to the Assistant Secretary an 
application--
            (1) at such time and in such manner as the Assistant 
        Secretary may require;
            (2) describing in detail the activities the incubator 
        intends to carry out using the grant; and
            (3) setting forth the percentage of the grant funds that 
        the incubator intends to use for each of the activities 
        described in subparagraphs (A) through (E) of subsection 
        (c)(1).
    (e) Grant Conditions.--As a condition of receiving a grant under 
the program, a covered business incubator shall do the following:
            (1) Fund manager.--Designate an individual as the fund 
        manager for the grant funds, who shall administer and be 
        responsible to the Assistant Secretary for information with 
        respect to the grant funds received by the incubator.
            (2) Investment committee.--Establish an investment 
        committee, composed of not fewer than 5 individuals (3 of whom 
        may not be employed by the incubator or an affiliate of the 
        incubator or be related to an individual who owns or is 
        otherwise responsible for the operations of 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 
                Assistant Secretary with respect to proposals for the 
                use of grant funds by the incubator; and
                    (C) submit periodic reports to the Assistant 
                Secretary on the results of activities carried out with 
                grant funds.
            (3) Collaborator.--Assign to each early-stage business in a 
        targeted industry that the incubator assists with grant funds a 
        collaborator who shall--
                    (A) be an individual not employed by the incubator 
                or an affiliate of the incubator or be related to an 
                individual who owns or is otherwise responsible for the 
                operations of the incubator or an affiliate of the 
                incubator; and
                    (B) 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 using a grant 
under the Program may not exceed 75 percent of the cost of that 
activity.
    (g) Monitoring and Evaluation.--
            (1) In general.--The Assistant Secretary shall assess the 
        effectiveness of covered business incubators that receive 
        grants under the Program in supporting the development of 
        early-stage businesses in targeted industries using the data 
        provided by covered business incubators under paragraph (2) and 
        such other information as the Assistant Secretary considers 
        appropriate.
            (2) Data from incubators.--Not later than 120 days after 
        the date on which a covered business incubator receives a grant 
        under the Program, the incubator shall provide to the Assistant 
        Secretary information on the activities of the incubator and on 
        the businesses assisted using the grant, including--
                    (A) the number of jobs created by those businesses;
                    (B) the amount of taxes paid by those businesses 
                and the employees of those businesses; and
                    (C) other data that the Assistant Secretary 
                considers appropriate to determine the effectiveness of 
                assistance provided using grants made under the 
                Program.
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out the Program--
            (1) $250,000,000 for the first fiscal year that begins 
        after the date of the enactment of this Act; and
            (2) such sums as may be necessary for each fiscal year 
        thereafter.
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