To amend the Small Business Investment Act of 1958 to reauthorize and expand the New Markets Venture Capital Program, and for other purposes.

Summary: Securing Equity for the Economic Development of Low Income Areas Act of 2005 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA), in selecting companies to participate in the New Markets Venture Capital Program (Program), to select at least one company from each geographic region of the SBA. Requires (currently, authorizes) the Administrator to make grants to such companies to be used for loans to new-market small businesses, and to guarantee debentures issued by such companies.

Establishes the Office of New Markets Venture Capital, headed by a Director, to administer the Program.

Revises the definition of "low income geographic area" for Program eligibility purposes.

Requires a study by the SBA's Chief Counsel for Advocacy on the availability of equity capital in low-income urban and rural areas.

Authorizes operational assistance grants to conditionally approved companies.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securing Equity for the Economic 
Development of Low Income Areas Act of 2005''.

SEC. 2. EXPANSION OF NEW MARKETS VENTURE CAPITAL PROGRAM.

    (a) Selection of Companies in Each Geographic Region.--Section 354 
of the Small Business Investment Act of 1958 is amended by adding at 
the end the following new subsection:
    ``(f) Geographic Requirement.--In selecting companies to 
participate as New Markets Venture Capital companies in the program 
established under this part, the Administrator shall select, to the 
extent practicable, from among companies submitting applications under 
subsection (b), at least one company from each geographic region of the 
Small Business Administration.''
    (b) Participation in New Markets Venture Capital Program.--
            (1) Administration participation required.--Section 353 of 
        the Small Business Investment Act of 1958 (15 U.S.C. 689b) is 
        amended by striking ``under which the Administrator may'' and 
        inserting ``under which the Administrator shall''.
            (2) Small manufacturer participation agreements required.--
        Such section, as amended by paragraph (1), is further amended, 
        by inserting after ``section 352'' the following: ``(with at 
        least one such agreement to be with a company engaged primarily 
        in development of and investment in small manufacturers, to the 
        extent practicable)''.
    (c) Report to Congress.--Not later than 1 year after the date of 
the enactment of this Act, the Administrator of the Small Business 
Administration shall submit to Congress a report evaluating the success 
of the expansion of the New Markets Venture Capital Program under this 
section.

SEC. 3. ESTABLISHMENT OF OFFICE OF NEW MARKETS VENTURE CAPITAL.

    (a) In General.--Title II of the Small Business Investment Act of 
1958 (15 U.S.C. 671 et seq.) is amended by adding at the end the 
following new section:

``SEC. 202. OFFICE OF NEW MARKETS VENTURE CAPITAL.

    ``(a) Establishment.--There is hereby established in the Investment 
Division of the Small Business Administration an office to be known as 
the `Office of New Markets Venture Capital'.
    ``(b) Director.--The Office of New Markets Venture Capital shall be 
headed by a Director who shall be appointed by the Administrator.
    ``(c) Responsibilities of Director.--Subject to the direction and 
control of the Administrator, the responsibilities of the Director of 
the Office of New Markets Venture Capital are as follows:
            ``(1) To administer the New Markets Venture Capital 
        Program.
            ``(2) To periodically assess the nature and scope of the 
        New Markets Venture Capital Program and to advise the 
        Administrator on recommended changes to the program based on 
        such assessment.
            ``(3) To work to expand the number of small business 
        concerns participating in the New Markets Venture Capital 
        Program.
            ``(4) To encourage investment in small manufacturing.
            ``(5) To perform such other duties relating to such 
        responsibilities as the Administrator may provide.''.
    (b) Authorization of Appropriations.--There is authorized to be 
appropriated $1,000,000 to carry out this section.

SEC. 4. LOW-INCOME GEOGRAPHIC AREAS.

    (a) Modification of Definition of Low-Income Geographic Area for 
Purposes of New Markets Venture Capital Program.--
            (1) In general.--Section 351(3)(A)(ii)(I) of the Small 
        Business Investment Act of 1958 (15 U.S.C. 689(3)(A)(ii)(I)) is 
        amended by striking ``50 percent'' and all that follows through 
        the end and inserting ``the median family income in that tract 
        does not exceed 80 percent of the greater of the statewide 
        median family income or the metropolitan area median family 
        income; or''.
            (2) Application of amended definition to capital 
        requirement.--The definition of low-income geographic area in 
        section 351(3) of the Small Business Investment Act of 1958 (15 
        U.S.C. 689(3)), as amended by subsection (a), shall apply to 
        private capital raised under section 354(d)(1) of the Small 
        Business Investment Act of 1958 (15 U.S.C. 689c(d)(1)) before, 
        on, or after the effective date of the amendment made by 
        subsection (a).
    (b) Study on Availability of Equity Capital.--
            (1) Study required.--Before the expiration of the 180-day 
        period that begins on the date of the enactment of this Act, 
        the Chief Counsel for Advocacy of the Small Business 
        Administration shall conduct a study on the availability of 
        equity capital in low-income urban and rural areas.
            (2) Report.--Not later than 90 days after the completion of 
        the study under paragraph (1) the Administrator shall submit to 
        Congress a report containing the findings of the study required 
        under paragraph (1) and any recommendations of the 
        Administrator based on such study.

SEC. 5. CONDITIONALLY APPROVED COMPANIES.

    (a) Operational Assistance Grants to Conditionally Approved 
Companies.--Section 358(a) of the Small Business Investment Act of 1958 
(15 U.S.C. 689(a)) is amended by adding at the end the following new 
paragraph:
            ``(6) Grants to conditionally approved companies.--
                    ``(A) In general.--Subject to subparagraphs (A) and 
                (B), upon the request of a company conditionally-
                approved under section 354(c), the Administrator shall 
                make a grant to the company under this subsection.
                    ``(B) Repayment by companies not approved.--If a 
                company receives a grant under paragraph (6) and does 
                not enter into a participation agreement for final 
                approval, the company shall repay the amount of the 
                grant to the Administrator.
                    ``(C) Deduction from grant to approved company.--If 
                a company receives a grant under paragraph (6) and 
                receives final approval under section 354(e), the 
                Administrator shall deduct the amount of the grant 
                under that paragraph from the total grant amount that 
                the company receives for operational assistance.
                    ``(D) Amount of grant.--No company may receive a 
                grant of more than $50,000 under this paragraph.''.
    (b) Limitation on Time for Final Approval.--Section 354(d) of the 
Small Business Investment Act of 1958 (15 U.S.C. 689c(d)) is amended by 
striking ``a period of time, not to exceed 2 years,'' and inserting ``2 
years''.

SEC. 6. APPLICATIONS FOR NEW MARKETS VENTURE CAPITAL PROGRAM.

    Not later than 60 days after the date of the enactment of this 
section, the Administrator shall prescribe standard documents for final 
New Markets Venture Capital Company approval application under section 
354(e) of the Small Business Investment Act of 1958 (15 U.S.C. 
689c(e)). The Administrator shall assure that the standard documents 
shall be designed to substantially reduce the cost burden of the 
application process on the companies involved.

SEC. 7. AUTHORIZATION OF APPROPRIATIONS.

    (a) Reauthorization of New Markets Venture Capital Program.--
Section 368(a) of the Small Business Investment Act of 1958 (15 U.S.C. 
689q(a)) is amended--
            (1) by striking ``fiscal years 2001 through 2006'' and 
        inserting ``fiscal years 2006 through 2008'';
            (2) in paragraph (1), by striking ``$150,000,000'' and 
        inserting ``$100,000,000''; and
            (3) in paragraph (2), by striking ``$30,000,000'' and 
        inserting ``$25,000,000''.
    (b) Authorization for Manufacturing and Regional New Markets 
Venture Capital Companies.--There is authorized to be appropriated 
$1,000,000, to be available until expended, to carry out section 354(f) 
of the Small Business Investment Act of 1958, as added by section 2, 
and to enter into participation agreements with companies engaged 
primarily in development of and investment in small manufacturers under 
section 353(1) of such Act, as amended by section 2.