[Congressional Record Volume 151, Number 149 (Thursday, November 10, 2005)]
[Extensions of Remarks]
[Pages E2334-E2335]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




BIPARTISAN LEGISLATION INTRODUCED TO HELP INCREASE EQUITY INVESTMENT IN 
              SMALL BUSINESSES LOCATED IN LOW-INCOME AREAS

                                 ______
                                 

                            HON. GWEN MOORE

                              of wisconsin

                    in the house of representatives

                      Thursday, November 10, 2005

  Ms. MOORE of Wisconsin. Mr. Speaker, I rise today to offer 
legislation along with my colleague from Kentucky, Congressman Harold 
``Hal'' Rogers, which seeks to increase venture capital investment in 
small businesses located in low-income urban and rural communities 
nationwide. Our bill, the Securing Equity for the Economic Development 
of Low Income Areas--SEED--Act, would reauthorize and expand the New 
Markets Venture Capital (NMVC) program of the Small Business 
Administration (SBA).
  The New Markets Venture Capital Program was established in 2000 for 
the purposes of making equity investments in small businesses located 
in economically distressed communities through the creation of NMVC 
companies. Many conventional venture capital firms have been unwilling 
to invest in economically disadvantaged areas. NMVC companies aim to 
help fill the access to capital gap that exists for many small firms in 
these communities.
  New Market Venture Capital companies will leverage equity capital 
backed by SBA-guaranteed funds to invest in small businesses in 
depressed areas. NMVC companies can also apply for matching operational 
assistance grants to provide entrepreneurs with the services and 
technical support needed to help their businesses grow and succeed.
  Through the program, 6 New Markets Venture Capital companies have 
been formed and are currently still operating and making quality 
investments in small businesses throughout the country. For example, 
the Southern Appalachian Fund located in Congressman Rogers' 
Congressional District was one of the original New Markets Venture 
Capital companies established during the initial round of funding. The 
Southern Appalachian Fund (SAF) is a $12.5 million venture capital fund 
offering equity capital and operational assistance to eligible small 
businesses located in the Appalachia regions of Kentucky, Tennessee, 
Georgia, Alabama, and Mississippi. In 2004 alone, SAF invested over $1 
million in three companies, which helped attract an additional $1.7 
million in venture capital funding for these firms. As a result, these 
investments assisted in the creation of over 50 new jobs in the region.
  Unfortunately, though authorized, this worthy program has not 
received funding in each of the last 3 fiscal years. The SEED Act would 
reauthorize the New Markets Venture Capital program by providing $100 
million in debenture guarantees and $25 million in operational 
assistance grants to fund the creation of a fresh round of NMVC 
companies. In addition, our legislation would incorporate small 
manufacturers into the mission of the program by encouraging the SBA to 
set up at least one company that is primarily involved in the 
investment and development of small manufacturing firms. The bill also 
seeks to diversify venture capital investments beyond the typical 
Silicon Valley and Northeastern corridors by

[[Page E2335]]

encouraging the formation of NMVC companies in each of the ten 
geographic regions of the SBA.
  Many of my constituents have fallen on hard times and are in need of 
help. A large portion of my district is in the midst of an economic 
crisis at this moment. In 2002, the Bureau of Labor Statistics found 
that 59 percent of working age African American males in Milwaukee were 
either unemployed or out of the workforce. In the past five 5, 
Milwaukee has lost 33,000 manufacturing jobs, an industry that was once 
the lifeblood of the local economy. And, according to a study conducted 
by the University of Kansas, Milwaukee ranks 49th out of the 50 largest 
U.S. cities in terms of per capita venture capital dollars.
  Small businesses create nearly 75 percent of all new jobs and account 
for 99 percent of all employers. It is not a stretch to conclude that 
increased investment in small businesses leads to the creation of new 
jobs and sparks much needed economic development in areas that have 
experienced better days. And given the high levels of unemployment that 
exist in many distressed urban and rural communities throughout the 
country, the New Markets Venture Capital program would provide a 
crucial source of investment capital to small firms and help create new 
jobs.
  I strongly urge my colleagues to support this very important 
bipartisan bill.

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