II 

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. 

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. 

4 This Act may be cited as the ‘‘Small Business Ven5 ture Capital Act of 2009’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act— 

8 (1) the terms ‘‘Administration’’ and ‘‘Adminis9 trator’’ mean the Small Business Administration 

10 and the Administrator thereof, respectively; 


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1 (2) the term ‘‘New Markets Venture Capital 

2 company’’ has the meaning given that term in sec3 tion 351 of the Small Business Investment Act of 

4 1958 (15 U.S.C. 689); and 

5 (3) the term ‘‘New Markets Venture Capital 

6 Program’’ means the program under part B of title 

7 III of the Small Business Investment Act of 1958 

8 (15 U.S.C. 689 et seq.). 

9 SEC. 3. TABLE OF CONTENTS. 

10 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. 

11 TITLE I—SMALL BUSINESS IN12 VESTMENT COMPANY PRO13 GRAM 

14 SEC. 101. REAUTHORIZATION. 

15 Section 20 of the Small Business Act (15 U.S.C. 631 

16 note) is amended— 


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1 (1) by redesignating subsection (j) as sub2 section (f); and 

3 (2) by adding at the end the following: 

4 ‘‘(g) SMALL BUSINESS VENTURE CAPITAL.—For the 

5 programs authorized under part A of title III of the Small 

6 Business Investment Act of 1958 (15 U.S.C. 681 et seq.), 

7 the Administrator is authorized to make— 

8 ‘‘(1) $500,000,000 in purchases of participating 

9 securities for each of fiscal years 2010 through 

10 2013; and 

11 ‘‘(2)(A) $2,000,000,000 in guarantees of deben12 tures for fiscal year 2010; 

13 ‘‘(B) $2,250,000,000 in guarantees of deben14 tures for fiscal year 2011; 

15 ‘‘(C) $2,500,000,000 in guarantees of deben16 tures for fiscal year 2012; and 

17 ‘‘(D) $2,750,000,000 in guarantees of deben18 tures for fiscal year 2013.’’. 

19 SEC. 102. LEVERAGE. 

20 Section 303(b)(2) of the Small Business Investment 

21 Act of 1958 (15 U.S.C. 683(b)(2)) is amended by adding 

22 at the end the following: 

23 ‘‘(E) INVESTMENTS IN SMALL BUSINESS

24 CONCERNS OWNED AND CONTROLLED BY

25 WOMEN AND SOCIALLY AND ECONOMICALLY


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1 DISADVANTAGED SMALL BUSINESS CON2 CERNS.— 

3 ‘‘(i) IN GENERAL.—The maximum 

4 amount of outstanding leverage made 

5 available to— 

6 ‘‘(I) any 1 small business invest7 ment company described in clause (ii) 

8 may not exceed the lesser of— 

9 ‘‘(aa) 300 percent of private 

10 capital; or 

11 ‘‘(bb) $175,000,000; and 

12 ‘‘(II) 2 or more small business 

13 investment companies described in 

14 clause (ii) that are commonly con15 trolled (as determined by the Adminis16 trator) may not exceed $250,000,000. 

17 ‘‘(ii) APPLICABILITY.—A small busi18 ness investment company described in this 

19 clause is a small business investment com20 pany that certifies in writing that not less 

21 than 50 percent of the dollar amount of in22 vestments of the small business investment 

23 company are or will be made in small busi24 ness concerns owned and controlled by 

25 women, as defined in section 3 of the 


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1 Small Business Act (15 U.S.C. 632), or 

2 socially and economically disadvantaged 

3 small business concerns, as defined in sec4 tion 8(a)(4)(A) of the Small Business Act 

5 (15 U.S.C. 637(a)(4)(A)).’’. 

6 SEC. 103. PRIVATE CAPITAL. 

7 Section 103(9)(A)(ii) of the Small Business Invest8 ment Act of 1958 (15 U.S.C. 662(9)(A)(ii)) is amended 

9 by inserting ‘‘, except for any company licensed under sec10 tion 301(c) on or before September 30, 2004, that holds 

11 commitments from the Administration for participating 

12 security leverage,’’ before ‘‘leverage shall not be funded 

13 based on such commitments’’. 

14 SEC. 104. MAXIMUM INVESTMENT IN A COMPANY. 

15 Section 306(a) of the Small Business Investment Act 

16 of 1958 (15 U.S.C. 686(a)) is amended by striking ‘‘10 

17 percent’’ and inserting ‘‘30 percent’’. 

18 TITLE II—NEW MARKETS 

19 VENTURE CAPITAL PROGRAM 

20 SEC. 201. DIVERSIFICATION OF NEW MARKETS VENTURE 

21 CAPITAL PROGRAM. 

22 (a) SELECTION OF COMPANIES IN EACH GEO23 GRAPHIC REGION.—Section 354 of the Small Business In24 vestment Act of 1958 (15 U.S.C. 689c) is amended by 

25 adding at the end the following: 


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1 ‘‘(f) GEOGRAPHIC GOAL.—In selecting companies to 

2 participate as New Markets Venture Capital companies in 

3 the program established under this part, the Adminis4 trator shall, to the maximum extent practicable, select at 

5 least 1 company from each geographic region of the Ad6 ministration.’’. 

7 (b) PARTICIPATION IN NEW MARKETS VENTURE

8 CAPITAL PROGRAM.— 

9 (1) ADMINISTRATION PARTICIPATION RE10 QUIRED.—Section 353 of the Small Business Invest11 ment Act of 1958 (15 U.S.C. 689b) is amended in 

12 the matter preceding paragraph (1), by striking 

13 ‘‘under which the Administrator may’’ and inserting 

14 ‘‘under which the Administrator shall’’. 

15 (2) SMALL MANUFACTURER PARTICIPATION.— 

16 Section 353(1) of the Small Business Investment 

17 Act of 1958 (15 U.S.C. 689b(1)) is amended by in18 serting ‘‘, and shall set a goal of entering into at 

19 least 1 such agreement each fiscal year with a com20 pany that is engaged primarily in development of, 

21 and investment in, small manufacturers, as that 

22 term is defined in section 501(e)(6)’’ after ‘‘section 

23 352’’. 


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1 SEC. 202. ESTABLISHMENT OF OFFICE OF NEW MARKETS 

2 VENTURE CAPITAL. 

3 Title II of the Small Business Investment Act of 

4 1958 (15 U.S.C. 671) is amended by adding at the end 

5 the following: 

6 ‘‘SEC. 202. OFFICE OF NEW MARKETS VENTURE CAPITAL. 

7 ‘‘(a) ESTABLISHMENT.—There is established in the 

8 Small Business Investment Division of the Administra9 tion, the Office of New Markets Venture Capital. 

10 ‘‘(b) DIRECTOR.—The head of the Office of New 

11 Markets Venture Capital shall be an individual appointed 

12 by the Administrator in the competitive service or the ex13 cepted service. 

14 ‘‘(c) RESPONSIBILITIES OF DIRECTOR.—The head of 

15 the Office of New Markets Venture Capital shall— 

16 ‘‘(1) administer the New Markets Venture Cap17 ital Program under part B of title III; 

18 ‘‘(2) assess, not less frequently than once every 

19 2 years, the nature and scope of the New Markets 

20 Venture Capital Program and advise the Adminis21 trator on recommended changes to the program; 

22 ‘‘(3) make efforts to expand the number of 

23 small-business concerns that participate in the New 

24 Markets Venture Capital Program; and 

25 ‘‘(4) encourage investment in small manufactur26 ers, as that term is defined in section 501(e)(6).’’. 


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1 SEC. 203. LOW-INCOME GEOGRAPHIC AREAS. 

2 (a) IN GENERAL.—Section 351 of the Small Business 

3 Investment Act of 1958 (15 U.S.C. 689) is amended— 

4 (1) by striking paragraph (2); 

5 (2) by redesignating paragraphs (3) through 

6 (8) as paragraphs (2) through (7), respectively; and 

7 (3) in paragraph (2), as so redesignated— 

8 (A) in the matter preceding subparagraph 

9 (A)— 

10 (i) by striking ‘‘the term’’ and insert11 ing ‘‘The term’’; and 

12 (ii) by striking ‘‘means’’; 

13 (B) by striking subparagraph (A) and in14 serting the following: 

15 ‘‘(A) means a ‘low-income community’ 

16 within the meaning of section 45D(e) of the In17 ternal Revenue Code of 1986 (relating to the 

18 new markets tax credit); and’’; and 

19 (C) in subparagraph (B), in the matter 

20 preceding clause (i), by inserting ‘‘includes’’ be21 fore ‘‘any area’’. 

22 (b) APPLICATION OF AMENDED DEFINITION TO CAP23 ITAL REQUIREMENT.—The definition of the term ‘‘low-in24 come geographic area’’ under section 351 of the Small 

25 Business Investment Act of 1958, as amended by sub26 section (a), shall apply to capital raised by a New Markets 


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1 Venture Capital company before, on, or after the date of 

2 enactment of this Act. 

3 SEC. 204. APPLICATIONS FOR NEW MARKETS VENTURE 

4 CAPITAL PROGRAM. 

5 Not later than 1 year after the date of enactment 

6 of this Act, the Administrator shall prescribe standard 

7 documents for an application by a New Markets Venture 

8 Capital company for final approval under section 354(e) 

9 of the Small Business Investment Act of 1958 (15 U.S.C. 

10 689c(e)). The Administrator shall ensure that such docu11 ments are designed to substantially reduce the cost of the 

12 application process for a company making such an applica13 tion. 

14 SEC. 205. OPERATIONAL ASSISTANCE GRANTS. 

15 (a) IN GENERAL.—Section 358(a)(4)(A) of the Small 

16 Business Investment Act of 1958 (15 U.S.C. 

17 689g(a)(4)(A)) is amended to read as follows: 

18 ‘‘(A) NEW MARKETS VENTURE CAPITAL

19 COMPANIES.—Notwithstanding section 354(d), 

20 the amount of a grant made under this sub21 section to a New Markets Venture Capital com22 pany shall be equal to the lesser of— 

23 ‘‘(i) 10 percent of the private capital 

24 raised by the company; or 

25 ‘‘(ii) $1,000,000.’’. 


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1 (b) REQUIREMENTS TO BE MET FOR FINAL AP2 PROVAL.—Section 354(d) of the Small Business Invest3 ment Act of 1958 (15 U.S.C. 689c(d)) is amended to read 

4 as follows: 

5 ‘‘(d) REQUIREMENTS TO BE MET FOR FINAL AP6 PROVAL.—Not later than 2 years after the date on which 

7 a company is conditionally approved by the Administrator 

8 under subsection (c)(1), the company shall raise not less 

9 than $5,000,000 of private capital, or binding capital com10 mitments, from 1 or more investors that— 

11 ‘‘(1) are not agencies or departments of the 

12 Federal Government; and 

13 ‘‘(2) meet criteria established by the Adminis14 trator.’’. 

15 (c) TECHNICAL AND CONFORMING AMENDMENTS.— 

16 Section 358(a)(4) of the Small Business Investment Act 

17 of 1958 (15 U.S.C. 689g(a)(4)) is amended by striking 

18 ‘‘section 354(d)(2)’’ each place it appears and inserting 

19 ‘‘section 354(d)’’. 

20 SEC. 206. AUTHORIZATION. 

21 Section 368(a) of the Small Business Investment Act 

22 of 1958 (15 U.S.C. 689q(a)) is amended— 

23 (1) in the matter preceding paragraph (1), by 

24 striking ‘‘fiscal years 2001 through 2006’’ and in25 serting ‘‘fiscal years 2010 through 2013’’; and 


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1 (2) in paragraph (2), by striking 

2 ‘‘$30,000,000’’ and inserting ‘‘$20,000,000’’. 

Æ 


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