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

Summary: Early-Stage Business Investment and Incubation Act of 2010 - Directs the Secretary of Commerce to establish an early-stage business investment and incubation grant program (program) to support the development of early-stage businesses engaged primarily in the research, development, manufacturing, production, or marketing of specified technologies, aerospace, communications, or transportation. Limits individual grants to $5 million. Requires each grant recipient under the program to: (1) designate an individual as the grant fund manager; (2) establish a grant investment committee; and (3) assign to each assisted business a grant collaborator. Directs the Secretary to monitor and evaluate program effectiveness.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Early-Stage Business Investment and 
Incubation Act of 2010''.

SEC. 2. EARLY-STAGE BUSINESS INVESTMENT AND INCUBATION GRANT PROGRAM.

    (a) Establishment.--Not later than 60 days after the date of 
enactment of this Act, the Secretary of Commerce 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.--In carrying out the program, the Secretary 
        is authorized to make grants to covered business incubators.
            (2) Grant amounts.--
                    (A) Non-federal capital limitation.--A grant made 
                to a covered business incubator under the program may 
                not be in an amount that exceeds 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 or before the date on 
                        which a grant is drawn upon.
                    (B) Aggregate amount limitation.--The aggregate 
                amount of all grants made to a covered business 
                incubator under the program may not exceed $5,000,000.
    (c) Grant Award Process.--In making a grant under the program, the 
Secretary shall commit a grant amount to a covered business incubator 
and the amount of each such commitment shall remain available to be 
drawn upon by such incubator during the 5-year period beginning on the 
date on which each such commitment is first drawn upon.
    (d) Use of Grant.--
            (1) In general.--A grant made under the program may be used 
        by a covered business incubator for the following:
                    (A) Making an investment in an early-stage business 
                in a targeted industry.
                    (B) Providing training, counseling, and other 
                assistance to an early-stage business in a targeted 
                industry to support the development of the business.
                    (C) Providing purchased services to an early-stage 
                business in a targeted industry.
                    (D) Conducting due diligence activities.
                    (E) Meeting operational expenses.
            (2) Limitations.--
                    (A) Purchased services.--Not more than 20 percent 
                of the amount of a grant made to a covered business 
                incubator under the program may be used by the 
                incubator to provide purchased services to an early-
                stage business in a targeted industry.
                    (B) Due diligence activities.--Not more than 6 
                percent of the amount of a grant made to a covered 
                business incubator under the program may be used by the 
                incubator to conduct due diligence activities.
                    (C) Operational expenses.--Not more than 5 percent 
                of the amount of a grant made to a covered business 
                incubator under the program may be used by the 
                incubator to meet operational expenses.
            (3) Designation of grant uses.--In the application of a 
        covered business incubator for a grant under the program, the 
        incubator shall notify the Secretary of the percentage of the 
        grant amount that will be used for each of the activities 
        described in subparagraphs (A) through (E) of paragraph (1) and 
        provide a detailed description of the activities to be 
        undertaken.
    (e) Grant Conditions.--
            (1) Fund manager.--As a condition of receiving a grant 
        under the program, a covered business incubator shall designate 
        an individual as the fund manager for the grant amount, who 
        shall administer and be responsible to the Secretary for 
        information with respect to the grant amounts received.
            (2) Investment committee.--As a condition of receiving a 
        grant under the program, a covered business incubator shall 
        establish an investment committee composed of not less than 5 
        individuals (3 of whom may not be employed by or related to 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 
                Secretary with respect to proposals for the use of 
                grant funds by the incubator; and
                    (C) submit periodic reports to the Secretary on the 
                results of activities carried out with grant funds.
            (3) Collaborator.--As a condition of receiving a grant 
        under the program, a covered business incubator shall assign to 
        each early-stage business in a targeted industry that is 
        assisted with grant amounts a collaborator who shall be an 
        individual not employed by or related to the incubator or an 
        affiliate of the incubator and who 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 with the 
assistance of a grant under the program shall not exceed 75 percent of 
such cost.
    (g) Monitoring and Evaluation.--
            (1) In general.--The Secretary shall assess the 
        effectiveness of covered business incubators that receive a 
        grant under the program.
            (2) Data from incubators.--Not later than 120 days after 
        the date of receiving a grant under the program, a covered 
        business incubator shall provide to the Secretary information 
        on the activities of the incubator and on the businesses 
        assisted under the grant, including--
                    (A) the number of jobs created by the businesses;
                    (B) the amount of taxes paid by the businesses and 
                the employees of the businesses; and
                    (C) other data that, as determined by the 
                Secretary, may be used to measure the value of 
                assistance under the program.
    (h) Authorization of Appropriations.--
            (1) In general.--There is authorized to be appropriated to 
        carry out the program--
                    (A) $250,000,000 for the first full fiscal year 
                beginning after the date of enactment of this Act; and
                    (B) such sums as may be necessary for subsequent 
                fiscal years.
            (2) Prohibition on earmarks.--None of the funds 
        appropriated for the program may be used for a congressional 
        earmark as defined in clause 9(e) of rule XXI of the Rules of 
        the House of Representatives.
    (i) Definitions.--In this Act, the following definitions apply:
            (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 business in targeted industries to support 
                the development of those businesses;
                    (B) has a physical location and on-site management 
                for the program described under subparagraph (A); and
                    (C) has procedures for selecting businesses for and 
                graduating businesses from the program described under 
                subparagraph (A).
            (2) Due diligence activities.--The term ``due diligence 
        activities'' means activities undertaken 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 domiciled in a State;
                    (B) has not generated gross annual revenues 
                exceeding $15,000,000 in any of the previous 3 years; 
                and
                    (C) is engaged primarily in researching, 
                developing, manufacturing, producing, or bringing to 
                market goods or services with respect to any of the 
                following business sectors:
                            (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.
                            (xvi) Transportation.
            (4) Operational expenses.--The term ``operational 
        expenses'' means the costs of operating an 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 that is provided 
        by a covered business incubator through an agreement with 
        another entity, and not by the incubator directly.
            (6) Secretary.--The terms ``Secretary'' and ``Secretary of 
        Commerce'' mean the Secretary of Commerce acting through the 
        Assistant Secretary of Commerce for Economic Development.
            (7) 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).