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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 1831 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                S. 1831

 To amend the Small Business Investment Act of 1958 to reauthorize the 
            venture capital program, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            October 21, 2009

   Mr. Kerry introduced the following bill; which was read twice and 
    referred to the Committee on Small Business and Entrepreneurship

_______________________________________________________________________

                                 A BILL

 
 To amend the Small Business Investment Act of 1958 to reauthorize the 
            venture capital program, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Business Venture Capital Act 
of 2009''.

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 ``New Markets Venture Capital company'' has 
        the meaning given that term in section 351 of the Small 
        Business Investment Act of 1958 (15 U.S.C. 689); and
            (3) 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. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

Sec. 1. Short title.
Sec. 2. Definitions.
Sec. 3. Table of contents.
           TITLE I--SMALL BUSINESS INVESTMENT COMPANY PROGRAM

Sec. 101. Reauthorization.
Sec. 102. Leverage.
Sec. 103. Private capital.
Sec. 104. Maximum investment in a company.
             TITLE II--NEW MARKETS VENTURE CAPITAL PROGRAM

Sec. 201. Diversification of New Markets Venture Capital Program.
Sec. 202. Establishment of Office of New Markets Venture Capital.
Sec. 203. Low-income geographic areas.
Sec. 204. Applications for New Markets Venture Capital Program.
Sec. 205. Operational assistance grants.
Sec. 206. Authorization.

           TITLE I--SMALL BUSINESS INVESTMENT COMPANY PROGRAM

SEC. 101. REAUTHORIZATION.

    Section 20 of the Small Business Act (15 U.S.C. 631 note) is 
amended--
            (1) by redesignating subsection (j) as subsection (f); and
            (2) by adding at the end the following:
    ``(g) Small Business Venture Capital.--For the programs authorized 
under part A of title III of the Small Business Investment Act of 1958 
(15 U.S.C. 681 et seq.), the Administrator is authorized to make--
            ``(1) $500,000,000 in purchases of participating securities 
        for each of fiscal years 2010 through 2013; and
            ``(2)(A) $2,000,000,000 in guarantees of debentures for 
        fiscal year 2010;
            ``(B) $2,250,000,000 in guarantees of debentures for fiscal 
        year 2011;
            ``(C) $2,500,000,000 in guarantees of debentures for fiscal 
        year 2012; and
            ``(D) $2,750,000,000 in guarantees of debentures for fiscal 
        year 2013.''.

SEC. 102. LEVERAGE.

    Section 303(b)(2) of the Small Business Investment Act of 1958 (15 
U.S.C. 683(b)(2)) is amended by adding at the end the following:
                    ``(E) Investments in small business concerns owned 
                and controlled by women and socially and economically 
                disadvantaged small business concerns.--
                            ``(i) In general.--The maximum amount of 
                        outstanding leverage made available to--
                                    ``(I) any 1 small business 
                                investment company described in clause 
                                (ii) may not exceed the lesser of--
                                            ``(aa) 300 percent of 
                                        private capital; or
                                            ``(bb) $175,000,000; and
                                    ``(II) 2 or more small business 
                                investment companies described in 
                                clause (ii) that are commonly 
                                controlled (as determined by the 
                                Administrator) may not exceed 
                                $250,000,000.
                            ``(ii) Applicability.--A small business 
                        investment company described in this clause is 
                        a small business investment company that 
                        certifies in writing that not less than 50 
                        percent of the dollar amount of investments of 
                        the small business investment company are or 
                        will be made in small business concerns owned 
                        and controlled by women, as defined in section 
                        3 of the Small Business Act (15 U.S.C. 632), or 
                        socially and economically disadvantaged small 
                        business concerns, as defined in section 
                        8(a)(4)(A) of the Small Business Act (15 U.S.C. 
                        637(a)(4)(A)).''.

SEC. 103. PRIVATE CAPITAL.

    Section 103(9)(A)(ii) of the Small Business Investment Act of 1958 
(15 U.S.C. 662(9)(A)(ii)) is amended by inserting ``, except for any 
company licensed under section 301(c) on or before September 30, 2004, 
that holds commitments from the Administration for participating 
security leverage,'' before ``leverage shall not be funded based on 
such commitments''.

SEC. 104. MAXIMUM INVESTMENT IN A COMPANY.

    Section 306(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 686(a)) is amended by striking ``10 percent'' and inserting ``30 
percent''.

             TITLE II--NEW MARKETS VENTURE CAPITAL PROGRAM

SEC. 201. DIVERSIFICATION 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 Goal.--In selecting companies to participate as 
New Markets Venture Capital companies in the program established under 
this part, the Administrator shall, to the maximum extent practicable, 
select at least 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.--Section 353(1) of 
        the Small Business Investment Act of 1958 (15 U.S.C. 689b(1)) 
        is amended by inserting ``, and shall set a goal of entering 
        into at least 1 such agreement each fiscal year with a company 
        that is engaged primarily in development of, and investment in, 
        small manufacturers, as that term is defined in section 
        501(e)(6)'' after ``section 352''.

SEC. 202. 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 Small Business 
Investment Division of the Administration, the Office of New Markets 
Venture Capital.
    ``(b) Director.--The head of the Office of New Markets Venture 
Capital shall be an individual appointed by the Administrator in the 
competitive service or the excepted service.
    ``(c) Responsibilities of Director.--The head of the Office of New 
Markets Venture Capital shall--
            ``(1) administer the New Markets Venture Capital Program 
        under part B of title III;
            ``(2) assess, not less frequently than once every 2 years, 
        the nature and scope of the New Markets Venture Capital Program 
        and advise the Administrator on recommended changes to the 
        program;
            ``(3) make efforts to expand the number of small-business 
        concerns that participate in the New Markets Venture Capital 
        Program; and
            ``(4) encourage investment in small manufacturers, as that 
        term is defined in section 501(e)(6).''.

SEC. 203. LOW-INCOME GEOGRAPHIC AREAS.

    (a) In General.--Section 351 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689) is amended--
            (1) by striking paragraph (2);
            (2) by redesignating paragraphs (3) through (8) as 
        paragraphs (2) through (7), respectively; and
            (3) in paragraph (2), as so redesignated--
                    (A) in the matter preceding subparagraph (A)--
                            (i) by striking ``the term'' and inserting 
                        ``The term''; and
                            (ii) by striking ``means'';
                    (B) by striking subparagraph (A) and inserting the 
                following:
                    ``(A) means a `low-income community' within the 
                meaning of section 45D(e) of the Internal Revenue Code 
                of 1986 (relating to the new markets tax credit); 
                and''; and
                    (C) in subparagraph (B), in the matter preceding 
                clause (i), by inserting ``includes'' before ``any 
                area''.
    (b) Application of Amended Definition to Capital Requirement.--The 
definition of the term ``low-income geographic area'' under section 351 
of the Small Business Investment Act of 1958, as amended by subsection 
(a), shall apply to capital raised by a New Markets Venture Capital 
company before, on, or after the date of enactment of this Act.

SEC. 204. APPLICATIONS FOR NEW MARKETS VENTURE CAPITAL PROGRAM.

    Not later than 1 year after the date of enactment of this Act, the 
Administrator shall prescribe standard documents for an application by 
a New Markets Venture Capital company for final approval 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 of the application process 
for a company making such an application.

SEC. 205. OPERATIONAL ASSISTANCE GRANTS.

    (a) In General.--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), 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.''.
    (b) Requirements To Be Met for Final Approval.--Section 354(d) of 
the Small Business Investment Act of 1958 (15 U.S.C. 689c(d)) is 
amended to read as follows:
    ``(d) Requirements To Be Met for Final Approval.--Not later than 2 
years after the date on which a company is conditionally approved by 
the Administrator under subsection (c)(1), the company shall raise not 
less than $5,000,000 of private capital, or binding capital 
commitments, from 1 or more investors that--
            ``(1) are not agencies or departments of the Federal 
        Government; and
            ``(2) meet criteria established by the Administrator.''.
    (c) Technical and Conforming Amendments.--Section 358(a)(4) of the 
Small Business Investment Act of 1958 (15 U.S.C. 689g(a)(4)) is amended 
by striking ``section 354(d)(2)'' each place it appears and inserting 
``section 354(d)''.

SEC. 206. AUTHORIZATION.

    Section 368(a) of the Small Business Investment Act of 1958 (15 
U.S.C. 689q(a)) is amended--
            (1) in the matter preceding paragraph (1), by striking 
        ``fiscal years 2001 through 2006'' and inserting ``fiscal years 
        2010 through 2013''; and
            (2) in paragraph (2), by striking ``$30,000,000'' and 
        inserting ``$20,000,000''.
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