Entrepreneurship Corps National Service 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 new section:

49.

Entrepreneurship Corps National Service Program

(a)

Definitions

In this section:(1)

Associate administrator

The term Associate Administrator means the Head of the Office of Investment and Innovation of the Administration.(2)

Census tract

The term census tract means a census tract delineated by the United States Bureau of the Census in the most recent decennial census.(3)

Distressed area

The term distressed area means a census tract experiencing economic distress, as determined by the Associate Administrator based on the following economic factors for such census tract:(A)Poverty rate.(B)Unemployment rate.(C)Median income.(D)The number of businesses, including the rate of new business formation.(E)The number of individuals belonging to an Indian tribe (as defined in section 8(a)(13)), including the percentage of the total population comprised of such individuals.(F)Such other economic factors as determined appropriate by the Associate Administrator.(4)

Fellow

The term fellow means an individual participating in the program.(5)

Participating business

The term participating business means a small business concern to which a fellow is assigned under the program.(6)

Program

The term program means the program established under subsection (b).(b)

Establishment

(1)

In general

Not later than 180 days after the date of the enactment of this Act, the Administrator shall establish in the Office of Investment and Innovation of the Administration a program, to be known as the Entrepreneurship Corps National Service Program, to support economic activity and job creation in distressed areas of the United States by providing to small business concerns located in distressed areas individuals with the skills and training needed by such small business concerns.(2)

Program administration

The Associate Administrator shall administer the program.(c)

Program fellows

(1)

In general

To be a fellow, an individual must—(A)be at least 21 years of age;(B)have obtained an associates, baccalaureate, or higher degree; and(C)enter into a written agreement with the Associate Administrator under paragraph (2).(2)

Service obligation agreement

An individual may become a fellow only if the individual enters into a written agreement with the Associate Administrator that requires the individual to serve as a fellow for a period of two years and containing such other terms as determined appropriate by the Associate Administrator.(3)

Application

An individual seeking to be a fellow shall submit to the Associate Administrator an application at such time, in such manner, and containing such information as the Associate Administrator determines appropriate.(4)

Fellow selection

(A)

In general

The Associate Administrator shall select the fellows in accordance with this paragraph.(B)

Selection criteria

When selecting fellows the Associate Administrator shall consider the following:(i)The academic and professional background and accomplishments of the individual, including demonstrated expertise in accounting, finance, economics, statistics, marketing, computer science, mathematics, or other subject areas related to business.(ii)Recommendations from teachers, coaches, mentors, and others in a position to evaluate the skills, expertise, background, character, and fitness for service in the program of the individual.(iii)The reasons provided by the individual for participating in the program.(iv)Such other criteria as the Associate Administrator determines appropriate based on the nature, purpose, and objectives of the program.(C)

Fellow class size

The Associate Administrator shall determine the number of fellows selected each year.(d)

Participating businesses

(1)

In general

To be eligible to be assigned a fellow under the program, a small business concern must—(A)have an employer identification number (assigned pursuant to section 6109 of the Internal Revenue Code of 1986);(B)have been established not more than five years prior the date on which such small business concern submits the application required under paragraph (2);(C)have its headquarters or main office, and the locations at which a majority of employees are employed, located in distressed areas; and(D)in the 12-month period immediately preceding the date on which such small business concern submits the application required by paragraph (2), have gross sales of not less than $200,000.(2)

Application

A small business seeking to be assigned a fellow under the program shall submit to the Associate Administrator an application at such time, in such manner, and containing such information as the Associate Administrator determines appropriate.(3)

Selection of participating businesses

(A)

In general

The Associate Administrator shall select small business concerns to which a fellow will be assigned under the program in accordance with subparagraph (B).(B)

Participating business selection

When selecting which small business concerns shall be assigned a fellow under the program, the Associate Administrator shall consider the following:(i)The growth or potential for success of the small business concern, as demonstrated by the financial statements of the small business concern.(ii)The demonstrated ability of the small business concern to access capital or attract equity investment in such concern.(iii)The business plan of the small business concern that includes a strategy for long-term success, if any.(iv)The ability of the small business concern to contribute to improving economic conditions in the distressed area.(v)The demonstrated need of the small business concern for a fellow under the program.(vi)Any other criteria that the Associate Administrator determines appropriate.(e)

Assignment of fellows

(1)

In general

The Associate Administrator shall assign fellows to small business concerns under the program in accordance with this subsection.(2)

Considerations

When assigning fellows to small business concerns business under the program, the Associate Administrator shall consider—(A)the needs of the small business concern;(B)the expertise, experience, skills, background, and interests of the fellow; and(C)the preferences of the fellow regarding the location of the small business concern to which such fellow is assigned under the program.(3)

Duration

The assignment of a fellow to a small business concern under the program shall be for a period of two years.(4)

Assignment limit

The Associate Administrator may not assign a fellow under the program to any small business concern to which, as of the date on which such assignment will commence, any other fellow is assigned.(5)

Resources

(A)

In general

A participating business shall provide to the fellow assigned to the participating business under the program the resources required for the fellow to carry out the duties such participating business assigns to such fellow.(B)

Reimbursement

The Associate Administrator shall reimburse a participating business for the reasonable costs incurred by such participating business for the resources provided by the business under subparagraph (A).(6)

Reassignment

If a fellow assigned to a participating business under the program is unable to continue such assignment, or for such other reasons as determined appropriate by the Associate Administrator, the Associate Administrator may reassign such fellow to another small business concern under the program for the remainder of the period of the assignment to the participating business.(f)

Benefits

(1)

Compensation

(A)

In general

The Associate Administrator shall pay to fellows a rate of pay determined appropriate by the Associate Administrator.(B)

Criteria

When determining the rate of pay for fellows under subparagraph (A), the Associate Administrator shall ensure that the rate of pay—(i)is comparable with the rate of pay of employees of the Federal Government with similar educational attainment, experience, and training; and(ii)is not less than the greater of the applicable State minimum wage or the Federal minimum hourly rate under the Fair Labor Standards Act of 1938 (29 U.S.C. 201 et seq.).(2)

Education grants

(A)

In general

An individual who completes a period of service as a fellow under program in accordance with the agreement such individual entered into under subsection (c)(2) and submits the application required under subparagraph (B) shall be eligible to receive a grant in accordance with this paragraph.(B)

Application

An individual seeking a grant under this paragraph shall submit to the Associate Administrator an application at such time, in such manner, and containing such information as the Associate Administrator determines appropriate.(C)

Grant amount

The aggregate amount of a grant made under this paragraph to an individual described in subparagraph (B) may not exceed the maximum amount of a grant under section 401 of the Higher Education Act of 1965 (20 U.S.C. 1070a) for the award year in which such individual becomes eligible for a grant under this paragraph.(D)

Disbursement

(i)

Initial disbursement

Upon an individual described in subparagraph (A) becoming eligible to receive a grant under this paragraph, the Associate Administrator shall disburse amounts under such grant in an amount equal to the lesser of—(I)the maximum amount allowed under subparagraph (D); or(II)the amount equal to the sum of the aggregate amount of the outstanding loans of such individual described in subclauses (I) through (III) of subparagraph (E)(i) and the amount of the expenses described in subclause (IV) of such subparagraph owed by such individual as of the date on which such individual becomes eligible for such grant.(ii)

Rolling disbursement

During the seven-year period beginning on the date on which the recipient of such grant becomes eligible to receive such grant, the Associate Administrator shall disburse to such recipient additional amounts under such grant equal to the amount of loans and expenses described in subparagraph (E) that such recipient incurs on or after such date, as such recipient incurs such loans and expenses, to the extent that the aggregate of such additional amounts and the amount disbursed under clause (i) for such grant does not exceed the maximum amount allowed for such grant under subparagraph (C).(E)

Uses

(i)

In general

The recipient of a grant awarded under this paragraph may use amounts received under such grant only to pay the following:(I)Qualified Federal student loans made to such recipient.(II)Loans made to such recipient—(aa)under subpart II of part A of title VII of the Public Health Service Act; or(bb)under part E of title VIII of that Act.(III)Loans made to such recipient—(aa)by a State to pay postsecondary educational expenses of the recipient; or(bb)by a public institution of higher education (as defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001)) to pay a borrower’s costs of attendance at such institution.(IV)Expenses incurred by such recipient for a program of education leading to an advanced degree to the extent that such expenses are—(aa)expenses for which amounts payable to an individual under section 3313(c)(1)(B)(iv) of title 38, United States Code, may be used; and(bb)owed or incurred on or after the date on which such recipient becomes eligible for such grant.(ii)

Qualified Federal student loan defined

In this subparagraph, the term qualified Federal student loan means a loan made under Part D of title IV of the Higher Education Act of 1965 (1087a et seq.) except such term does not include—(I)a Federal Direct PLUS Loan made to the parents of a dependent student; or(II)a Federal Direct Consolidation Loan made under section 455(g) of such Act to the extent that such loan was used to repay a Federal Direct PLUS Loan made to the parents of a dependent student.(F)

Single award

An individual may receive only a single grant under this paragraph.(G)

Outreach

The Associate Administrator shall—(i)conduct outreach to institutions of higher education (as defined under section 101(a) of the Higher Education Act of 1965 (20 U.S.C. 1001(a))) to provide information to students at such institutions about the benefits of participating as a fellow in the program; and(ii)seek to coordinate with institutions of higher education and businesses to develop academic and professional opportunities for former fellows, including opportunities for employment and to obtain advanced degrees.(3)

Noncompetitive appointment eligibility

During the one-year period beginning on the date on which an individual completes a period service as a fellow under the program in accordance with the agreement such individual entered into under subsection (c)(2), the head of a Federal agency may, without regard to the provisions of subchapter I of chapter 33 of title 5, United States Code, other than section 3303 and 3328 of such title, appoint such individual to a vacant position in the competitive service in such agency for which such individual is qualified.(g)

Status

(1)

In general

Except as provided by this subsection—(A)a fellow is not an employee of—(i)any participating business to which such fellow is assigned under the program for the purpose of any law, including the Internal Review Code of 1986; or(ii)the Federal Government; and(B)selection for participation in the program does not constitute an appointment as an officer or employee of the Federal Government for the purpose of any law.(2)

Exceptions

A fellow is deemed to be an employee of—(A)the Federal Government for purposes of—(i)chapter 81 of title 5, United States Code; and(ii)chapter 171 of title 28, United States Code, and any other Federal tort liability statute; and(B)the Administration for the purposes of chapters 83 and 84 of title 5, United States Code.(3)

Health care

A fellow is deemed to be a full-time employee of the Administration for the purposes of chapter 89 of title 5, United States Code, except that a fellow or former fellow may not make the election under section 8905a(a) of such title with respect to coverage under such chapter obtained pursuant this paragraph.(4)

Employment taxes

For purposes of subtitle C of the Internal Revenue Code of 1986, the Small Business Administration shall be treated as the employer of each fellow with respect to the program.(h)

Report to congress

Not later than one year after the establishment of the program, and annually thereafter, the Associate Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the program, including—(1)the effects of fellows on the participating businesses to which such fellows have been assigned under the program;(2)the economic effects of the program on distressed communities in which participating businesses are located;(3)the overall performance of fellows under the program;(4)the overall performance of participating businesses; and(5)recommendations to modify the program to more effectively support economic activity and job creation in distressed areas of the United States.

(b)

Student loan forgiveness credit

Section 455(m)(3)(B) of the Higher Education Act of 1965 (20 U.S.C. 1087e(m)(3)(B)) is amended—(1)in clause (i), by striking ; or and inserting a semicolon;(2)in clause (ii), by striking the period at the end and inserting ; or; and(3)by adding at the end the following new clause:

(iii)serving as a fellow in the Entrepreneurship Corps National Service Program established under section 49 of the Small Business Act.

(c)

Exclusion from adjusted gross income

(1)

In general

Part III of subchapter B of the Internal Revenue Code of 1986 is amended by inserting after section 139I the following new section:

139J.

Small business fellow

In the case of a small business concern to which a fellow is assigned under the Entrepreneurship Corps National Service Program established under section 49 of the Small Business Act, gross income does not include the value of any labor performed by such fellow.

(2)

Clerical amendment

The table of sections for part III of subchapter B of such Code is amended by inserting after the item relating to section 139I the following new item:

Sec. 139J. Small business fellow.

(3)

Effective date

The amendment made by this subsection shall apply to taxable years beginning after the date of the enactment of this subsection.