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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Securing Equity for the Economic 
Development of Low Income Areas Act of 2006''.

SEC. 2. DEFINITIONS.

    In this Act--
            (1) the terms ``Administration'' and ``Administrator'' mean 
        the Small Business Administration and the Administrator 
        thereof, respectively;
            (2) the term ``low-income geographic area'' has the same 
        meaning as in section 351 of the Small Business Investment Act 
        of 1958 (15 U.S.C. 689), as amended by this Act;
            (3) the term ``New Markets Venture Capital company'' has 
        the same meaning as in section 351 of the Small Business 
        Investment Act of 1958 (15 U.S.C. 689); and
            (4) the term ``New Markets Venture Capital Program'' means 
        the program under part B of title III of the Small Business 
        Investment Act of 1958 (15 U.S.C. 689 et seq.).

SEC. 3. 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 (15 U.S.C. 689c) is 
amended by adding at the end the following:
    ``(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), not fewer than 1 company from each geographic region of 
the 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 in the matter preceding paragraph (1), by striking 
        ``under which the Administrator may'' and inserting ``under 
        which the Administrator shall''.
            (2) Small manufacturer participation agreements required.--
        Section 353 of the Small Business Investment Act of 1958 (15 
        U.S.C. 689b) is amended--
                    (A) by striking ``In accordance with this part,'' 
                and inserting the following:
    ``(a) In General.--In accordance with this part,'';
                    (B) in subsection (a)(1), as so designated by this 
                paragraph, by inserting after ``section 352'' the 
                following: ``(with not fewer than 1 such agreement to 
                be with a company engaged primarily in development of 
                and investment in small manufacturers, to the extent 
                practicable)''; and
                    (C) by adding at the end the following:
    ``(b) Rule of Construction.--Subsection (a)(1) shall not be 
construed to authorize the Administrator to decline to enter into a 
participation agreement with a company solely on the basis that the 
company is not engaged primarily in development of and investment in 
small manufacturers.''.

SEC. 4. REPORT TO CONGRESS.

    Not later than 1 year after the date of enactment of this Act, the 
Administrator shall submit to Congress a report evaluating the success 
of the New Markets Venture Capital Program in promoting economic 
development and creating wealth and job opportunities in low-income 
geographic areas, among individuals living in such areas, by 
encouraging developmental venture capital investments in smaller 
enterprises.

SEC. 5. ESTABLISHMENT OF OFFICE OF NEW MARKETS VENTURE CAPITAL.

    Title II of the Small Business Investment Act of 1958 (15 U.S.C. 
671) is amended by adding at the end the following:

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

    ``(a) Establishment.--There is established in the Investment 
Division of the Administration, 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--
            ``(1) to administer the New Markets Venture Capital Program 
        under part B of title III;
            ``(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; and
            ``(5) to perform such other duties relating to such 
        responsibilities as the Administrator may provide.''.

SEC. 6. 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 of the Small Business 
        Investment Act of 1958 (15 U.S.C. 689) is amended--
                    (A) by striking paragraphs (2) and (3) and 
                inserting the following:
            ``(2) Low-income geographic area.--The term `low-income 
        geographic area' has the meaning given the term `low-income 
        community' in section 45D of the Internal Revenue Code of 1986 
        (relating to the new markets tax credit).''; and
                    (B) by redesignating paragraphs (4) through (8) as 
                paragraphs (3) through (7), respectively.
            (2) Retroactive application of amended definition to 
        capital requirement.--The definition of a low-income geographic 
        area in section 351(2) of the Small Business Investment Act of 
        1958, as amended by paragraph (1), 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 date of enactment of this Act.
    (b) Study on Availability of Equity Capital.--
            (1) Study required.--Not later than the end of the 180-day 
        period beginning on the date of enactment of this Act, the 
        Chief Counsel for Advocacy of the Administration shall conduct 
        a study on the availability of equity capital in low-income 
        geographic 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. 7. LIMITATION ON TIME FOR FINAL APPROVAL OF COMPANIES.

    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. 8. APPLICATIONS FOR NEW MARKETS VENTURE CAPITAL PROGRAM.

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

SEC. 9. OPERATIONAL ASSISTANCE GRANTS.

    Section 358(a)(4)(A) of the Small Business Investment Act of 1958 
(15 U.S.C. 689g(a)(4)(A)) is amended to read as follows:
                    ``(A) New markets venture capital companies.--
                Notwithstanding section 354(d)(2), the amount of a 
                grant made under this subsection to a New Markets 
                Venture Capital company shall be equal to the lesser 
                of--
                            ``(i) 10 percent of the private capital 
                        raised by the company; or
                            ``(ii) $1,000,000.''.

SEC. 10. 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 in the matter preceding paragraph (1), by striking 
``fiscal years 2001 through 2006'' and inserting ``fiscal years 2006 
through 2009''.
    (b) Office of New Markets Venture Capital.--There is authorized to 
be appropriated to carry out section 202 of the Small Business 
Investment Act of 1958, as added by this Act, $1,000,000.

Summary: Securing Equity for the Economic Development of Low Income Areas Act of 2006 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to select at least one company from each SBA geographic region when selecting companies to participate as New Markets Venture Capital companies. Establishes in the Investment Division of the SBA the Office of New Markets Venture Capital. Modifies the definition of low-income geographic area to reflect the new markets tax credit under the Internal Revenue Code. Revises the formula for the amount of operational assistance grants for new markets venture capital companies.