Innovation centers program

(a)

In general

The Small Business Act (15 U.S.C. 631 et seq.) is amended—(1)by redesignating section 49 as section 50; and(2)by inserting after section 48 the following:

49.

Innovation centers program

(a)

Definitions

In this section:(1)

Accelerator

The term accelerator means an organization—(A)that—(i)works with a startup or growing small business concern for a predetermined period; and(ii)provides mentorship and instruction to scale businesses; and(B)that may—(i)provide, but is not exclusively designed to provide, seed investment in exchange for a small amount of equity; and(ii)offer startup capital or the opportunity to raise capital from outside investors.(2)

Federally recognized area of economic distress

The term federally recognized area of economic distress means—(A)a HUBZone, as that term is defined in section 31(b); or(B)an area that has been designated as—(i)an empowerment zone under section 1391 of the Internal Revenue Code of 1986;(ii)a Promise Zone by the Secretary of Housing and Urban Development; or(iii)a low-income neighborhood or moderate-income neighborhood for purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 2901 et seq.).(3)

Growing; newly established; startup

The terms growing, newly established, and startup, with respect to a small business concern, mean growing, newly established, and startup, respectively, within the meaning given those terms under section 7(m).(4)

Incubator

The term incubator means an organization—(A)that—(i)tends to work with startup and newly established small business concerns; and(ii)provides mentorship to startup and newly established small business concerns; and(B)that may—(i)provide a co-working environment or a month-to-month lease program; and(ii)work with a startup or newly established small business concern for a predetermined period or an open-ended period.(5)

Individuals with a disability

The term individuals with a disability means more than 1 individual with a disability, as defined in section 3 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12102).(6)

Eligible entity

The term eligible entity means—(A)an institution described in any of paragraphs (1) through (7) of section 371(a) of the Higher Education Act of 1965 (20 U.S.C. 1067q(a)); or(B)a junior or community college, as defined in section 312 of the Higher Education Act of 1965 (20 U.S.C. 1058).(7)

Rural area

The term rural area has the meaning given the term in section 7(m)(11).(8)

Socially and economically disadvantaged individuals

The term socially and economically disadvantaged individual means a socially and economically disadvantaged individual within the meaning given that term in section 8(d)(3)(C).(b)

Establishment

Not later than 1 year after the date of enactment of the Ushering Progress by Leveraging Innovation and Future Technology Act of 2021, the Administrator shall develop and begin implementing a program (to be known as the Innovation Centers Program) to enter into cooperative agreements with eligible entities under this section.(c)

Authority

(1)

In general

The Administrator may—(A)enter into cooperative agreements to provide financial assistance to eligible entities to conduct 5-year projects for the benefit of startup, newly established, or growing small business concerns; and(B)renew a cooperative agreement entered into under this section for additional 3-year periods, in accordance with paragraph (3).(2)

Project requirements

A project conducted under a cooperative agreement under this section shall—(A)include operating as an accelerator, an incubator, or any other small business innovation-focused project as the Administrator approves;(B)be carried out in such locations as to provide maximum accessibility and benefits to the small business concerns that the project is intended to serve;(C)have a full-time staff, including a full-time director who shall—(i)have the authority to make expenditures under the budget of the project; and(ii)manage the activities carried out under the project;(D)include the joint provision of programs and services by the eligible entity and the Administration, which—(i)shall be jointly developed, negotiated, and agreed upon, with full participation of both parties, pursuant to an executed cooperative agreement between the eligible entity and the Administration; and(ii)shall include—(I)one-to-one individual counseling, as described in section 21(c)(3)(A); and(II)a formal, structured mentorship program;(E)incorporate continuous upgrades and modifications to the services and programs offered under the project, as needed to meet the changing and evolving needs of the business community;(F)involve working with underserved groups, which include—(i)women;(ii)socially and economically disadvantaged individuals;(iii)veterans;(iv)individuals with disabilities; or(v)startup, newly established, or growing small business concerns located in rural areas;(G)not impose or otherwise collect a fee or other compensation in connection with participation in the programs and services described in subparagraph (D)(ii); and(H)ensure that small business concerns participating in the project have access, including through resource partners, to information concerning Federal, State, and local regulations that affect small business concerns.(3)

Continued funding

(A)

In general

An eligible entity that enters into an initial cooperative agreement or a renewal of a cooperative under paragraph (1) may submit an application for a 3-year renewal of the cooperative agreement at such time, in such manner, and accompanied by such information as the Administrator may establish.(B)

Application and approval criteria

(i)

Criteria

The Administrator shall develop and publish criteria for the consideration and approval of applications for renewals by eligible entities under this paragraph, which shall take into account the structure and the stated goals of the project.(ii)

Notification

Not later than 60 days after the date of the deadline to submit applications for each fiscal year, the Administrator shall approve or deny any application under this paragraph and notify the applicant for each such application.(C)

Priority

In allocating funds made available for cooperative agreements under this section, the Administrator shall give applications under this paragraph priority over first-time applications for cooperative agreements under paragraph (1)(A).(4)

Limit on use of funds

Amounts received by an eligible entity under a cooperative agreement under this section may not be used to provide capital to a participant in the project carried out under the cooperative agreement.(5)

Scope of authority

(A)

Subject to appropriations

The authority of the Administrator to enter into cooperative agreements under this section shall be in effect for each fiscal year only to the extent and in the amounts as are provided in advance in appropriations Acts.(B)

Suspension, termination, and failure to renew or extend

After the Administrator has entered into a cooperative agreement with an eligible entity under this section, the Administrator may not suspend, terminate, or fail to renew or extend the cooperative agreement unless the Administrator provides the eligible entity with written notification setting forth the reasons therefore and affords the eligible entity an opportunity for a hearing, appeal, or other administrative proceeding under chapter 5 of title 5, United States Code.(d)

Criteria

(1)

In general

The Administrator shall—(A)establish and rank in terms of relative importance the criteria the Administrator shall use in awarding cooperative agreements under this section, which shall include—(i)whether the proposed project will be located in—(I)a federally recognized area of economic distress;(II)a rural area; or(III)an area lacking sufficient entrepreneurial development resources, as determined by the Administrator; and(ii)whether the proposed project demonstrates a commitment to partner with core stakeholders working with small business concerns in the relevant area, including—(I)investment and lending organizations;(II)nongovernmental organizations;(III)programs of State and local governments that are concerned with aiding small business concerns;(IV)Federal agencies; and(V)for-profit organizations with an expertise in small business innovation;(B)make publicly available, including on the website of the Administration, and state in each solicitation for applications for cooperative agreements under this section, the selection criteria and ranking established under subparagraph (A); and(C)evaluate and rank applicants for cooperative agreements under this section in accordance with the selection criteria and ranking established under subparagraph (A).(2)

Contents

The criteria established under paragraph (1)(A)—(A)for eligible entities that have in operation an accelerator, incubator, or other small business innovation-focused project shall include the record of the eligible entity in assisting growing, newly established, and startup small business concerns, including, for each of the 3 full years before the date on which the eligible entity applies for a cooperative agreement under this section, or if the accelerator, incubator, or other small business innovation-focused project has been in operation for less than 3 years, for the most recent full year the accelerator, incubator, or other small business innovation-focused project was in operation—(i)the number and retention rate of growing, newly established, and startup business concerns in the program of the eligible entity;(ii)the average period of participation by growing, newly established, and startup small business concerns in the program of the eligible entity;(iii)the total and median capital raised by growing, newly established, and startup small business concerns participating in the program of the eligible entity;(iv)the number of investments or loans received by growing, newly established, and startup small business concerns participating in the program of the eligible entity; and(v)the total and median number of employees of growing, newly established, and startup small business concerns participating in the program of the eligible entity; and(B)for all eligible entities—(i)shall include whether the eligible entity—(I)indicates the structure and goals of the project;(II)demonstrates ties to the business community;(III)identifies the resources available for the project;(IV)describes the capabilities of the project, including coordination with local resource partners and local or national lending partners of the Administration;(V)addresses the unique business and economic challenges faced by the community in which the eligible entity is located and businesses in that community; or(VI)provides a proposed budget and plan for use of funds; and(ii)may include any other criteria determined appropriate by the Administrator.(e)

Program examination

(1)

In general

The Administrator shall—(A)develop and implement an annual programmatic and financial examination of each project conducted under this section, under which each eligible entity entering into a cooperative agreement under this section shall provide to the Administrator—(i)an itemized cost breakdown of actual expenditures for costs incurred during the preceding year; and(ii)documentation regarding—(I)the amount of matching assistance from non-Federal sources obtained and expended by the eligible entity during the preceding year in order to meet the matching requirement; and(II)with respect to any in-kind contributions that were used to satisfy the matching requirement, verification of the existence and valuation of those contributions; and(B)analyze the results of each examination conducted under subparagraph (A) and, based on that analysis, make a determination regarding the programmatic and financial viability of each eligible entity.(2)

Conditions for continued funding

In determining whether to continue or renew a cooperative agreement under this section, the Administrator—(A)shall consider the results of the most recent examination of the project under paragraph (1); and(B)may terminate or not renew a cooperative agreement, if the Administrator determines that the eligible entity has failed to provide any information required to be provided (including information provide for purpose of the annual report by the Administrator under subsection (m)) or the information provided by the eligible entity is inadequate.(f)

Training and technical assistance

The Administrator—(1)shall provide in person or online training and technical assistance to each eligible entity entering into a cooperative agreement under this section at the beginning of the participation of the eligible entity in the Innovation Centers Program in order to build the capacity of the eligible entity and ensure compliance with procedures established by the Administrator;(2)shall ensure that the training and technical assistance described in paragraph (1) is provided at no cost or at a low cost; and(3)may enter into a contract to provide the training or technical assistance described in paragraph (1) with 1 or more organizations with expertise in the entrepreneurial development programs of the Administration, innovation, and entrepreneurial development.(g)

Coordination

In carrying out a project under this section, an eligible entity may coordinate with—(1)resource and lending partners of the Administration;(2)programs of State and local governments that are concerned with aiding small business concerns; and(3)other Federal agencies, including to provide services to and assist small business concerns in participating in the SBIR and STTR programs, as defined in section 9(e).(h)

Funding limit

The amount of financial assistance provided to an eligible entity under a cooperative agreement entered into under this section shall be not more than $400,000 during each year.(i)

Matching requirement

(1)

In general

An eligible entity shall contribute toward the cost of the project carried out under the cooperative agreement under this section an amount equal to 50 percent of the amount received under the cooperative agreement.(2)

In-kind contributions

Not more than 50 percent of the contribution of an eligible entity under paragraph (1) may be in the form of in-kind contributions.(3)

Waiver

(A)

In general

If the Administrator determines that an eligible entity is unable to meet the contribution requirement under paragraph (1), the Administrator may reduce the required contribution.(B)

Presumption

An eligible entity shall be presumed to be unable to meet the contribution requirement under paragraph (1) if the eligible entity has—(i)long-term debt in an amount that is less than $10,000,000;(ii)an invested market endowment in an amount that is less than $15,000,000; or(iii)total net liquid assets in an amount that is less than $15,000,000.(4)

Failure to obtain non-federal funding

If an eligible entity fails to obtain the required non-Federal contribution during any project, or the reduced non-Federal contribution as determined by the Administrator—(A)the eligible entity shall not be eligible thereafter for any other project for which it is or may be funded by the Administration; and(B)before approving assistance for the eligible entity for any other projects, the Administrator shall specifically determine whether the Administrator believes that the eligible entity will be able to obtain the requisite non-Federal funding and enter a written finding setting the forth the reasons for making that determination.(5)

Rule of construction

The demonstrated inability of an eligible entity to meet the contribution requirement under paragraph (1) shall not disqualify the eligible entity from entering into a cooperative agreement under this section.(j)

Contract authority

(1)

In general

An eligible entity may enter into a contract with a Federal department or agency to provide specific assistance to startup, newly established, or growing small business concerns.(2)

Performance

Performance of a contract entered into under paragraph (1) may not hinder the eligible entity in carrying out the terms of the cooperative agreement under this section.(3)

Exemption from matching requirement

A contract entered into under paragraph (1) shall not be subject to the matching requirement under subsection (i).(4)

Additional provision

Notwithstanding any other provision of law, a contract for assistance under paragraph (1) shall not be applied to any Federal department or agency’s small business, woman-owned business, or socially and economically disadvantaged business contracting goal under section 15(g).(k)

Privacy requirements

(1)

In general

An eligible entity may not disclose the name, address, or telephone number of any individual or small business concern receiving assistance under this section without the consent of such individual or small business concern, unless—(A)the Administrator is ordered to make such a disclosure by a court in any civil or criminal enforcement action initiated by a Federal or State agency; or(B)the Administrator considers such a disclosure to be necessary for the purpose of conducting a financial audit of an eligible entity, but a disclosure under this subparagraph shall be limited to the information necessary for such audit.(2)

Administration use of information

This subsection shall not—(A)restrict Administration access to program activity data; or(B)prevent the Administration from using client information (other than the information described in subparagraph (A)) to conduct client surveys.(3)

Regulations

The Administrator shall issue regulations to establish standards for requiring disclosures during a financial audit under paragraph (1)(B).(l)

Publication of information

The Administrator shall—(1)publish information about the program under this section online, including—(A)on the website of the Administration; and(B)on the social media of the Administration; and(2)request that the resource and lending partners of the Administration and the district offices of the Administration publicize the program.(m)

Annual reporting

Not later than 1 year after the date on which the Administrator establishes the program under this section, and annually thereafter, the Administrator shall submit to Congress a report on the activities under the program, including—(1)the number of startup, newly established, and growing small business concerns participating in the project carried out by each eligible entity under a cooperative agreement under this section (in this paragraph referred to as participants), including a breakdown of the owners of the participants by race, gender, veteran status, and urban versus rural location;(2)the retention rate for participants;(3)the total and median amount of capital accessed by participants, including the type of capital accessed;(4)the total and median number of employees of participants;(5)the number and median wage of jobs created by participants;(6)the number of jobs sustained by participants; and(7)information regarding such other metrics as the Administrator determines appropriate.(n)

Funding

(1)

Authorization of appropriations

There are authorized to be appropriated such sums as may be necessary to carry out this section.(2)

Administrative expenses

Of the amount made available to carry out this section for any fiscal year, not more than 10 percent may be used by the Administrator for administrative expenses.

(b)

Regulations

The Administrator of the Small Business Administration shall promulgate regulations to carry out section 49 of the Small Business Act, as added by subsection (a).