II 

112TH CONGRESS 

1ST SESSION S. 753 

To require the Assistant Secretary of Commerce for Economic Development 

to establish an early-stage business investment and incubation grant 

program, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 6 (legislative day, APRIL 5), 2011 

Mrs. GILLIBRAND introduced the following bill; which was read twice and 

referred to the Committee on Commerce, Science, and Transportation 

A BILL 

To require the Assistant Secretary of Commerce for Economic Development to establish an early-stage business 

investment and incubation grant 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 ‘‘Early-Stage Business 

5 Investment and Incubation Act of 2011’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 


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1 (1) COVERED BUSINESS INCUBATOR.—The 

2 term ‘‘covered business incubator’’ means a public or 

3 private not-for-profit organization, including an aca4 demic institution, that— 

5 (A) operates a program providing assist6 ance to early-stage businesses in targeted in7 dustries to support the development of those 

8 businesses; 

9 (B) has a physical location and on-site 

10 management for the program described in sub11 paragraph (A); and 

12 (C) has procedures for selecting businesses 

13 for, and graduating businesses from, the pro14 gram described in subparagraph (A). 

15 (2) DUE DILIGENCE ACTIVITIES.—The term 

16 ‘‘due diligence activities’’ means activities carried 

17 out to analyze and assess the desirability, value, and 

18 potential of an opportunity to provide assistance to 

19 an early-stage business in a targeted industry. 

20 (3) EARLY-STAGE BUSINESS IN A TARGETED

21 INDUSTRY.—The term ‘‘early-stage business in a 

22 targeted industry’’ means a small business concern 

23 that— 

24 (A) is located in the United States; 


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1 (B) has not generated gross annual reve2 nues exceeding $15,000,000 in any of the most 

3 recent 3 years; and 

4 (C) is engaged primarily in researching, 

5 developing, manufacturing, producing, or bring6 ing to market goods or services with respect 

7 to— 

8 (i) agricultural technology; 

9 (ii) energy technology; 

10 (iii) environmental technology; 

11 (iv) life science technology; 

12 (v) biotechnology; 

13 (vi) information technology; 

14 (vii) digital media; 

15 (viii) clean technology; 

16 (ix) defense technology; 

17 (x) photonics technology; 

18 (xi) electronic technology; 

19 (xii) semiconductor technology; 

20 (xiii) material science technology; 

21 (xiv) aerospace; 

22 (xv) communications; or 

23 (xvi) transportation. 

24 (4) OPERATIONAL EXPENSES.—The term 

25 ‘‘operational expenses’’ means the costs of operating 


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1 a covered business incubator, including overhead and 

2 management expenses. 

3 (5) PURCHASED SERVICES.—The term ‘‘pur4 chased services’’ means any training, counseling, or 

5 other assistance provided to an early-stage business 

6 in a targeted industry by a covered business incu7 bator through an agreement with another entity, and 

8 not by the incubator directly. 

9 (6) SMALL BUSINESS CONCERN.—The term 

10 ‘‘small business concern’’ has the meaning given 

11 that term in section 3 of the Small Business Act (15 

12 U.S.C. 632). 

13 SEC. 3. EARLY-STAGE BUSINESS INVESTMENT AND INCUBA14 TION GRANT PROGRAM. 

15 (a) ESTABLISHMENT.—Not later than 60 days after 

16 the date of the enactment of this Act, the Assistant Sec17 retary of Commerce for Economic Development (in this 

18 section referred to as the ‘‘Assistant Secretary’’) shall es19 tablish an early-stage business investment and incubation 

20 grant program (in this section referred to as the ‘‘Pro21 gram’’) to support the development of early-stage busi22 nesses in targeted industries. 

23 (b) GRANT AUTHORITY.— 


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1 (1) IN GENERAL.—The Assistant Secretary 

2 may make grants to covered business incubators 

3 under the Program. 

4 (2) AMOUNT OF GRANTS.— 

5 (A) NON-FEDERAL CAPITAL LIMITATION.— 

6 The amount of a grant made to a covered busi7 ness incubator under the Program may not ex8 ceed the amount of the incubator’s capital 

9 that— 

10 (i) is not from a Federal source; and 

11 (ii) is available for investment and in12 cubation services on the day before the 

13 grant is awarded. 

14 (B) AGGREGATE AMOUNT LIMITATION.—A 

15 covered business incubator may receive not 

16 more than $5,000,000 in grants under the Pro17 gram. 

18 (c) USE OF GRANT FUNDS.— 

19 (1) IN GENERAL.—Subject to paragraph (2), a 

20 grant made to a covered business incubator under 

21 the Program may be used by the incubator— 

22 (A) to make an investment in an early23 stage business in a targeted industry; 

24 (B) to provide training, counseling, and 

25 other assistance to an early-stage business in a 


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1 targeted industry to support the development of 

2 the business; 

3 (C) to provide purchased services to an 

4 early-stage business in a targeted industry; 

5 (D) to conduct due diligence activities; or 

6 (E) to meet operational expenses of the in7 cubator. 

8 (2) LIMITATIONS.— 

9 (A) PURCHASED SERVICES.—A covered 

10 business incubator may use not more than 20 

11 percent of the amount of a grant made to the 

12 incubator under the Program to provide pur13 chased services to an early-stage business in a 

14 targeted industry. 

15 (B) DUE DILIGENCE ACTIVITIES.—A cov16 ered business incubator may use not more than 

17 6 percent of the amount of a grant made to the 

18 incubator under the Program to conduct due 

19 diligence activities. 

20 (C) OPERATIONAL EXPENSES.—A covered 

21 business incubator may use not more than 5 

22 percent of the amount of a grant made to the 

23 incubator under the Program to meet oper24 ational expenses of the incubator. 


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1 (d) APPLICATIONS.—A covered business incubator 

2 seeking a grant under the Program shall submit to the 

3 Assistant Secretary an application— 

4 (1) at such time and in such manner as the As5 sistant Secretary may require; 

6 (2) describing in detail the activities the incu7 bator intends to carry out using the grant; and 

8 (3) setting forth the percentage of the grant 

9 funds that the incubator intends to use for each of 

10 the activities described in subparagraphs (A) 

11 through (E) of subsection (c)(1). 

12 (e) GRANT CONDITIONS.—As a condition of receiving 

13 a grant under the program, a covered business incubator 

14 shall do the following: 

15 (1) FUND MANAGER.—Designate an individual 

16 as the fund manager for the grant funds, who shall 

17 administer and be responsible to the Assistant Sec18 retary for information with respect to the grant 

19 funds received by the incubator. 

20 (2) INVESTMENT COMMITTEE.—Establish an 

21 investment committee, composed of not fewer than 5 

22 individuals (3 of whom may not be employed by the 

23 incubator or an affiliate of the incubator or be re24 lated to an individual who owns or is otherwise reVerDate Mar 15 2010 06:19 Apr 07, 2011 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S753.IS S753

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1 sponsible for the operations of the incubator or an 

2 affiliate of the incubator), that shall— 

3 (A) review proposals for and advise the in4 cubator on the use of grant funds; 

5 (B) provide letters of support and ref6 erence to the Assistant Secretary with respect 

7 to proposals for the use of grant funds by the 

8 incubator; and 

9 (C) submit periodic reports to the Assist10 ant Secretary on the results of activities carried 

11 out with grant funds. 

12 (3) COLLABORATOR.—Assign to each early13 stage business in a targeted industry that the incu14 bator assists with grant funds a collaborator who 

15 shall— 

16 (A) be an individual not employed by the 

17 incubator or an affiliate of the incubator or be 

18 related to an individual who owns or is other19 wise responsible for the operations of the incu20 bator or an affiliate of the incubator; and 

21 (B) shall assist the incubator in providing 

22 support to the business. 

23 (f) FEDERAL SHARE OF ACTIVITIES.—The Federal 

24 share of the cost of an activity carried out by a covered 


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1 business incubator using a grant under the Program may 

2 not exceed 75 percent of the cost of that activity. 

3 (g) MONITORING AND EVALUATION.— 

4 (1) IN GENERAL.—The Assistant Secretary 

5 shall assess the effectiveness of covered business in6 cubators that receive grants under the Program in 

7 supporting the development of early-stage businesses 

8 in targeted industries using the data provided by 

9 covered business incubators under paragraph (2) 

10 and such other information as the Assistant Sec11 retary considers appropriate. 

12 (2) DATA FROM INCUBATORS.—Not later than 

13 120 days after the date on which a covered business 

14 incubator receives a grant under the Program, the 

15 incubator shall provide to the Assistant Secretary in16 formation on the activities of the incubator and on 

17 the businesses assisted using the grant, including— 

18 (A) the number of jobs created by those 

19 businesses; 

20 (B) the amount of taxes paid by those 

21 businesses and the employees of those busi22 nesses; and 

23 (C) other data that the Assistant Secretary 

24 considers appropriate to determine the effectiveVerDate Mar 15 2010 06:19 Apr 07, 2011 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S753.IS S753

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1 ness of assistance provided using grants made 

2 under the Program. 

3 (h) AUTHORIZATION OF APPROPRIATIONS.—There 

4 are authorized to be appropriated to carry out the Pro5 gram— 

6 (1) $250,000,000 for the first fiscal year that 

7 begins after the date of the enactment of this Act; 

8 and 

9 (2) such sums as may be necessary for each fis10 cal year thereafter. 

Æ 


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