I 

108TH CONGRESS 

1ST SESSION H. R. 2314

To support business incubation in academic settings, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 3, 2003

Mr. TIERNEY (for himself and Mr. SHIMKUS) introduced the following bill; 

which was referred to the Committee on Education and the Workforce 

A BILL

To support business incubation in academic settings, and 

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE AND FINDINGS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Linking Educators and Developing Entrepreneurs for 

6 Reaching Success (LEADERS) Act of 2003’’. 

7 (b) FINDINGS.—Congress makes the following find8 ings: 

9 (1) Business incubators housed in academic set10 tings provide unique educational opportunities for 

11 students, provide entrepreneurs with enhanced ac-
2

•HR 2314 IH 

1 cess to a skilled workforce, and bring a wealth of re2 sources to business, academia, and communities. 

3 (2) Academic affiliated incubators bridge the 

4 missions of academic institutions by bringing to5 gether education, economic development, and tech6 nology commercialization efforts. 

7 (3) Studies have shown that incubator tenant 

8 companies have an average success rate of 87 per9 cent, and 90 percent for technology-based incubator 

10 tenant companies. These success rates are dramati11 cally higher than the success rates for companies in 

12 the general economy. 

13 (4) Incubator companies are also more likely to 

14 remain in the same communities as they grow and 

15 to provide high paying jobs and benefits to their em16 ployees. 

17 (5) Business incubators help academic institu18 tions contribute to local goals of sustaining economic 

19 development in their surrounding communities. 

20 (6) Education in entrepreneurship and other 

21 business formation skills is essential to business suc22 cess and sustainable economic development. 

23 SEC. 2. PURPOSE. 

24 The purpose of this Act is to encourage entrepreneur25 ship by increasing the role for academia in entrepreneur-
3

•HR 2314 IH 

1 ship by providing space and expertise in an academic set2 ting to house and support new and emerging small busi3 nesses. 

4 SEC. 3. DEFINITIONS. 

5 In this Act: 

6 (1) DEGREE-GRANTING INSTITUTION.—The 

7 term ‘‘degree-granting institution’’ means an institu8 tion of higher education, as defined in section 101 

9 of the Higher Education Act of 1965 (20 U.S.C. 

10 1001), that awards an associate or baccalaureate de11 gree. 

12 (2) INCUBATOR.—The term ‘‘incubator’’ means 

13 an entity affiliated with or housed in a degree-grant14 ing institution that provides space and coordinated 

15 and specialized services to entrepreneurial businesses 

16 which meet selected criteria during the businesses’ 

17 startup phase, including providing services such as 

18 shared office space and services, access to equip19 ment, access to telecommunications and technology 

20 services, flexible leases, specialized management as21 sistance, access to financing, and other coordinated 

22 business or technical support services. 

23 (3) SECRETARY.—The term ‘‘Secretary’’ means 

24 the Secretary of Education. 
4

•HR 2314 IH 

1 SEC. 4. PROGRAM AUTHORIZED. 

2 (a) IN GENERAL.—The Secretary is authorized to 

3 support the establishment and development of incubators. 

4 (b) ALLOCATION OF FUNDS.—From the amount ap5 propriated under section 9, the Secretary—

6 (1) shall use 80 percent of the amount to—

7 (A) make awards, on a competitive basis, 

8 in amounts of $500,000 to $750,000, to help 

9 acquire or renovate space for incubators; and 

10 (B) make awards, on a competitive basis, 

11 in amounts of $50,000 to $150,000, for devel12 oping curricula, providing services (including 

13 preparing corporate charters, partnership 

14 agreements, and basic contracts, assistance 

15 with patents, trademarks, and copyrights, and 

16 technology acquisition services), or providing 

17 programming for entrepreneurs housed in an 

18 incubator; 

19 (2) shall use 10 percent of the amount to make 

20 awards, on a competitive basis, in amounts of

21 $50,000 to $150,000, for feasibility studies for de22 termining the need for or siting of incubators; and 

23 (3) shall use 10 percent for research regarding 

24 best practices for incubator programs, including the 

25 development of a benchmarking system based on 
5

•HR 2314 IH 

1 uniform measures, and for dissemination of informa2 tion regarding such practices. 

3 (c) CONTRACTS.—The Secretary is authorized to con4 tract with organizations with expertise in business incuba5 tion practices for the purposes of carrying out subsection 

6 (b)(3). 

7 (d) RECIPIENTS.—The Secretary shall make an 

8 award—

9 (1) described in subsection (b)(1) to a nonprofit 

10 entity that has a strong affiliation with a degree11 granting institution and manages or provides tech12 nical assistance to the degree-granting institution’s 

13 affiliated incubator, or if no nonprofit entity man14 ages or provides technical assistance to the incu15 bator, to the degree-granting institution managing 

16 the incubator; and 

17 (2) described in subsection (b)(2) to a degree18 granting institution, or a nonprofit municipality, 

19 city, township, or community development organiza20 tion.

21 SEC. 5. USES OF FUNDS. 

22 Funds awarded under section 4(b)(1)(B) may be 

23 used for—

24 (1) curriculum, training, or technical assistance 

25 developed by academic faculty with participation 
6

•HR 2314 IH 

1 from entrepreneurship experts and local government 

2 leaders; 

3 (2) programming that contributes to a coordi4 nated set of business assistance tools, such as devel5 oping management teams, providing workforce devel6 opment, forming strategic alliances, developing cap7 ital formation networks, and developing customized 

8 plans to help entrepreneurs meet the challenges of 

9 doing business in their specific communities; and 

10 (3) hiring staff to coordinate the activities de11 scribed in paragraph (1) or (2) or for curriculum de12 velopment. 

13 SEC. 6. APPLICATIONS. 

14 (a) IN GENERAL.—Each entity desiring assistance 

15 under this Act shall submit an application to the Secretary 

16 at such time, in such manner, and accompanied by such 

17 information as the Secretary may require. 

18 (b) CONTENTS.—Each application shall contain an 

19 assurance that the activities to be assisted—

20 (1) have the support of the municipality, city, 

21 or township in which the incubator is housed or pro22 posed to be housed; and 

23 (2) are consistent with the local economic devel24 opment plan or strategic master plan. 
7

•HR 2314 IH 

1 (c) PRIORITY.—The Secretary shall give priority to 

2 funding applications under this Act that provide strong 

3 educational opportunities to students in entrepreneurship, 

4 and that require significant collaboration between busi5 nesses, academia, and local government and economic de6 velopment leaders. 

7 (d) CONSIDERATION.—

8 (1) IN GENERAL.—In addition to applications 

9 from other appropriate sources, the Secretary may 

10 give consideration to funding applications under this 

11 Act that support—

12 (A) the building of new incubators; 

13 (B) incubators located in economically dis14 tressed areas; 

15 (C) incubators with successful graduation 

16 rates for tenant companies; 

17 (D) incubators that have shown demon18 strable economic benefits in their surrounding 

19 communities; 

20 (E) incubators that work with faculty en21 trepreneurs or university-based research; or 

22 (F) incubators located in rural, inner-city 

23 areas, or Indian reservations or pueblos where 

24 the presence of an incubator may enhance and 
8

•HR 2314 IH 

1 diversify the area’s economy through expanded 

2 technology commercialization. 

3 (2) DEFINITION OF CONSIDERATION.—In this 

4 subsection, the term ‘‘consideration’’ does not mean 

5 priority. 

6 SEC. 7. MATCHING FUNDS. 

7 Each entity receiving Federal assistance under sec8 tion 4(b)(1) shall contribute matching funds, in an 

9 amount equal to the amount of Federal assistance received 

10 under this Act, toward the costs of the activities assisted 

11 under this Act. The non-Federal share required under this 

12 section may be provided in the form of in-kind contribu13 tions. 

14 SEC. 8. REPORT. 

15 The Secretary, at the end of the third year for which 

16 assistance is provided under this Act, shall prepare and 

17 submit to Congress a report that—

18 (1) describes the most effective or innovative 

19 additions to curricula developed under this Act; 

20 (2) contains a comparison of small business 

21 survival rates for small businesses that started up in 

22 incubators versus small businesses that did not so 

23 start; 

24 (3) describes factors leading to any success of 

25 incubator businesses; 
9

•HR 2314 IH 

1 (4) describes the best role for degree-granting 

2 institutions in business incubation; and 

3 (5) contains a comparison of academic-affiliated 

4 incubators of specific missions and ages supported 

5 under this Act with incubators with similar missions 

6 and ages that are not supported under this Act. 

7 SEC. 9. AUTHORIZATION OF APPROPRIATIONS. 

8 There are authorized to be appropriated to carry out 

9 this Act $20,000,000 for each of fiscal years 2004, 2005, 

10 and 2006.

Æ