II

107TH CONGRESS

1ST SESSION S. 1335

To support business incubation in academic settings.

IN THE SENATE OF THE UNITED STATES

AUGUST 2, 2001

Mr. KENNEDY (for himself, Mr. DEWINE, Mr. DASCHLE, Ms. SNOWE, Mr.

DURBIN, Mr. CORZINE, Ms. STABENOW, Mr. BAUCUS, Mr. BINGAMAN,

Mr. LIEBERMAN, Ms. LANDRIEU, Mr. JOHNSON, and Mr. CONRAD) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To support business incubation in academic settings.

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; FINDINGS.

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

5 ‘‘Linking Educators and Developing Entrepreneurs for

6 Reaching Success Act of 2001’’.

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

9 (1) Business incubators housed in academic set10 tings provide unique educational opportunities for
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1 students, provide entrepreneurs with enhanced ac2 cess to a skilled workforce, and bring a wealth of re3 sources to business, academia, and communities.

4 (2) Academic affiliated incubators bridge the

5 missions of academic institutions by bringing to6 gether education, economic development, and tech7 nology commercialization efforts.

8 (3) Studies have shown that incubator tenant

9 companies have an average success rate of 87 per10 cent, and 90 percent for technology-based incubator

11 tenant companies. These success rates are dramati12 cally higher than the success rates for companies in

13 the general economy.

14 (4) Incubator companies are also more likely to

15 remain in the same communities as they grow and

16 to provide high paying jobs and benefits to their em17 ployees.

18 (5) Business incubators help academic institu19 tions contribute to local goals of sustaining economic

20 development in their surrounding communities.

21 (6) Education in entrepreneurship and other

22 business formation skills is essential to business suc23 cess and sustainable economic development.
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1 SEC. 2. PURPOSE.

2 The purpose of this Act is to encourage entrepreneur3 ship by increasing the role for academia in entrepreneur4 ship by providing space and expertise in an academic set5 ting to house and support new and emerging small busi6 nesses.

7 SEC. 3. DEFINITIONS.

8 In this Act:

9 (1) DEGREE-GRANTING INSTITUTION.—The

10 term ‘‘degree-granting institution’’ means an institu11 tion of higher education, as defined in section 101

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

13 1001), that awards an associate or baccalaureate de14 gree.

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

16 an entity affiliated with or housed in a degree-grant17 ing institution that provides space and coordinated

18 and specialized services to entrepreneurial businesses

19 which meet selected criteria during the businesses’

20 startup phase, including providing services such as

21 shared office space and services, access to equip22 ment, access to telecommunications and technology

23 services, flexible leases, specialized management as24 sistance, access to financing, and other coordinated

25 business or technical support services.
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1 (3) SECRETARY.—The term ‘‘Secretary’’ means

2 the Secretary of Education.

3 SEC. 4. PROGRAM AUTHORIZED.

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

5 support the establishment and development of incubators.

6 (b) ALLOCATION OF FUNDS.—From the amount ap7 propriated under section 9, the Secretary—

8 (1) shall reserve 80 percent of the amount to—

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

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

11 acquire or renovate space for incubators; and

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

13 in amounts of $50,000 to $150,000, for devel14 oping curricula, providing services, or providing

15 programming for entrepreneurs housed in an

16 incubator;

17 (2) shall reserve 10 percent of the amount to

18 make awards, on a competitive basis, in amounts of

19 $50,000 to $150,000, for feasibility studies for de20 termining the need for or siting of incubators; and

21 (3) shall reserve 10 percent for research regard22 ing best practices for incubator programs, including

23 the development of a benchmarking system based on

24 uniform measures, and for dissemination of informa25 tion regarding such practices.
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1 (c) CONTRACTS.—The Secretary is authorized to con2 tract with organizations with expertise in business incuba3 tion practices for the purposes of carrying out subsection

4 (b)(3).

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

6 award—

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

8 entity that has a strong affiliation with a degree9 granting institution and manages or provides tech10 nical assistance to the degree-granting institution’s

11 affiliated incubator, or if no nonprofit entity man12 ages or provides technical assistance to the incu13 bator, to the degree-granting institution managing

14 the incubator; and

15 (2) described in subsection (b)(2) to a degree16 granting institution, or a nonprofit municipality,

17 city, township, or community development organiza18 tion.

19 SEC. 5. USES OF FUNDS.

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

21 used for—

22 (1) curriculum, training, or technical assistance

23 developed by academic faculty with participation

24 from entrepreneurship experts and local government

25 leaders;
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1 (2) programming that contributes to a coordi2 nated set of business assistance tools, such as devel3 oping management teams, providing workforce devel4 opment, forming strategic alliances, developing cap5 ital formation networks, and developing customized

6 plans to help entrepreneurs meet the challenges of

7 doing business in their specific communities; and

8 (3) hiring staff to coordinate the activities de9 scribed in paragraph (1) or (2) or for curriculum de10 velopment.

11 SEC. 6. APPLICATIONS.

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

13 under this Act shall submit an application to the Secretary

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

15 information as the Secretary may require.

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

17 assurance that the activities to be assisted—

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

19 or township in which the incubator is housed or pro20 posed to be housed; and

21 (2) are consistent with the local economic devel22 opment or strategic master plan.

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

24 funding applications under this Act that provide strong

25 educational opportunities to students in entrepreneurship,
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1 and that require significant collaboration between busi2 nesses, academia, and local government and economic de3 velopment leaders.

4 (d) CONSIDERATION.—

5 (1) IN GENERAL.—The Secretary may give con6 sideration to funding applications under this Act

7 that support—

8 (A) the building of new incubators;

9 (B) incubators located in economically dis10 tressed areas;

11 (C) incubators with successful graduation

12 rates for tenant companies;

13 (D) incubators that have shown demon14 strable economic benefits in their surrounding

15 communities; or

16 (E) incubators that work with faculty en17 trepreneurs or university-based research.

18 (2) DEFINITION OF CONSIDERATION.—In this

19 subsection the term ‘‘consideration’’ means thought

20 and does not mean priority.

21 SEC. 7. MATCHING FUNDS.

22 Each entity receiving Federal assistance under sec23 tion 4(b)(1) shall contribute matching funds, in an

24 amount equal to the amount of Federal assistance received
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1 under this Act, toward the costs of the activities assisted

2 under this Act.

3 SEC. 8. REPORT.

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

5 assistance is provided under this Act, shall prepare and

6 submit to Congress a report that—

7 (1) describes the most effective or innovative

8 additions to curricula developed under this Act;

9 (2) contains a comparison of small business

10 survival rates for small businesses that started up in

11 incubators versus small businesses that did not so

12 start;

13 (3) describes factors leading to success of incu14 bator businesses (if any);

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

16 institutions in business incubation; and

17 (5) contains a comparison of academic-affiliated

18 incubators of specific missions and ages supported

19 under this Act with incubators with similar missions

20 and ages that are not supported under this Act.

21 SEC. 9. AUTHORIZATION OF APPROPRIATIONS.

22 There are authorized to be appropriated to carry out

23 this Act $20,000,000 for each of the fiscal years 2002,

24 2003, and 2004.

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