II 

Calendar No. 422 

110TH CONGRESS 

1ST SESSION S. 1662 

[Report No. 110–199] 

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 

JUNE 19, 2007 

Mr. KERRY (for himself and Ms. SNOWE) introduced the following bill; which 

was read twice and referred to the Committee on Small Business and Entrepreneurship 

OCTOBER 16, 2007 

Reported by Mr. KERRY, with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

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 2007’’. 


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1 SEC. 2. REAUTHORIZATION. 

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

3 note) is amended by inserting after subsection (e) the fol4 lowing: 

5 ‘‘(f) SMALL BUSINESS VENTURE CAPITAL.—For the 

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

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

8 the Administrator is authorized to make— 

9 ‘‘(1) $500,000,000 in purchases of participating 

10 securities for each of fiscal years 2007 through 

11 2010; and 

12 ‘‘(2)(A) $2,000,000,000 in guarantees of deben13 tures for fiscal year 2007; 

14 ‘‘(B) $2,250,000,000 in guarantees of deben15 tures for fiscal year 2008; 

16 ‘‘(C) $2,500,000,000 in guarantees of deben17 tures for fiscal year 2009; and 

18 ‘‘(D) $2,775,000,000 in guarantees of deben19 tures for fiscal year 2010.’’. 

20 SEC. 3. LEVERAGE. 

21 (a) IN GENERAL.—Section 303(b)(2) of the Small 

22 Business Investment Act of 1958 (15 U.S.C. 683(b)(2)) 

23 is amended to read as follows: 

24 ‘‘(2) MAXIMUM LEVERAGE.— 

25 ‘‘(A) IN GENERAL.—The maximum 

26 amount of outstanding leverage made available 


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1 to any 1 company licensed under section 301(c) 

2 may not exceed the lesser of— 

3 ‘‘(i) 300 percent of private capital; or 

4 ‘‘(ii) $150,000,000. 

5 ‘‘(B) MULTIPLE LICENSES UNDER COM6 MON CONTROL.—The maximum amount of out7 standing leverage made available to 2 or more 

8 companies licensed under section 301(c) that 

9 are commonly controlled (as determined by the 

10 Administrator) may not exceed $225,000,000. 

11 ‘‘(C) INVESTMENTS IN WOMEN-OWNED

12 AND MINORITY-OWNED BUSINESSES AND IN

13 LOW-INCOME GEOGRAPHIC AREAS.— 

14 ‘‘(i) IN GENERAL.—The maximum 

15 amount of outstanding leverage made 

16 available to— 

17 ‘‘(I) any 1 company described in 

18 clause (ii) may not exceed the lesser 

19 of— 

20 ‘‘(aa) 300 percent of private 

21 capital; or 

22 ‘‘(bb) $175,000,000; and 

23 ‘‘(II) 2 or more companies de24 scribed in clause (ii) that are com25 monly controlled (as determined by 


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1 the Administrator) may not exceed 

2 $250,000,000. 

3 ‘‘(ii) APPLICABILITY.—A company de4 scribed in this clause is a company licensed 

5 under section 301(c) that certifies in writ6 ing that not less than 50 percent of the 

7 dollar amount of investments of that com8 pany shall be made in companies that, 

9 prior to that investment, are owned by 

10 women or minorities (as determined by the 

11 Administrator) or are located in a low-in12 come geographic area (as that term is de13 fined in section 351). 

14 ‘‘(iii) EXCEPTION.—The Adminis15 trator may, on a case-by-case basis, impose 

16 such additional terms and conditions as 

17 the Administrator determines to be appro18 priate to minimize the risk of loss to the 

19 Administration in the event of a default.’’. 

20 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

21 Section 303(b) of the Small Business Investment Act of 

22 1958 (15 U.S.C. 683(b)) is amended by striking para23 graph (4). 


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1 SEC. 4. INVESTMENTS IN SMALLER ENTERPRISES. 

2 Section 303(d) of the Small Business Investment Act 

3 of 1958 (15 U.S.C. 683(d)) is amended to read as follows: 

4 ‘‘(d) INVESTMENTS IN SMALLER ENTERPRISES.— 

5 The Administrator shall require each licensee, as a condi6 tion of an application for leverage, to certify in writing 

7 that not less than 25 percent of the aggregate dollar 

8 amount of financings of that licensee shall be provided to 

9 smaller enterprises.’’. 

10 SEC. 5. PRIVATE CAPITAL. 

11 (a) IN GENERAL.—Section 103(9)(A)(ii) of the Small 

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

13 662(9)(A)(ii)) is amended by inserting ‘‘, for any company 

14 licensed under section 301(c) on or after October 1, 

15 2004,’’ before ‘‘leverage shall not be funded based on such 

16 commitments’’. 

17 SECTION 1. SHORT TITLE. 

18 This Act may be cited as the ‘‘Small Business Venture 

19 Capital Act of 2007’’. 

20 SEC. 2. DEFINITIONS. 

21 In this Act— 

22 (1) the terms ‘‘Administration’’ and ‘‘Adminis23 trator’’ mean the Small Business Administration and 

24 the Administrator thereof, respectively; 

25 (2) the term ‘‘low-income geographic area’’ has 

26 the meaning given that term in section 351 of the 


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

2 689), as amended by this Act; 

3 (3) the term ‘‘New Markets Venture Capital com4 pany’’ has the meaning given that term in section 

5 351 of the Small Business Investment Act of 1958 (15 

6 U.S.C. 689); and 

7 (4) the term ‘‘New Markets Venture Capital Pro8 gram’’ means the program under part B of title III 

9 of the Small Business Investment Act of 1958 (15 

10 U.S.C. 689 et seq.). 

11 SEC. 3. TABLE OF CONTENTS. 

12 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. Investments in small er enterprises. 

Sec. 104. Private capital. 

Sec. 105. 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. 


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1 TITLE I—SMALL BUSINESS IN2 VESTMENT COMPANY PRO3 GRAM 

4 SEC. 101. REAUTHORIZATION. 

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

6 note) is amended by inserting after subsection (e) the fol7 lowing: 

8 ‘‘(f) SMALL BUSINESS VENTURE CAPITAL.—For the 

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

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

11 the Administrator is authorized to make— 

12 ‘‘(1) $500,000,000 in purchases of participating 

13 securities for each of fiscal years 2007 through 2010; 

14 and 

15 ‘‘(2)(A) $2,000,000,000 in guarantees of deben16 tures for fiscal year 2007; 

17 ‘‘(B) $2,250,000,000 in guarantees of debentures 

18 for fiscal year 2008; 

19 ‘‘(C) $2,500,000,000 in guarantees of debentures 

20 for fiscal year 2009; and 

21 ‘‘(D) $2,750,000,000 in guarantees of debentures 

22 for fiscal year 2010.’’. 


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1 SEC. 102. LEVERAGE. 

2 (a) IN GENERAL.—Section 303(b)(2) of the Small 

3 Business Investment Act of 1958 (15 U.S.C. 683(b)(2)) is 

4 amended to read as follows: 

5 ‘‘(2) MAXIMUM LEVERAGE.— 

6 ‘‘(A) IN GENERAL.—The maximum amount 

7 of outstanding leverage made available to any 1 

8 company licensed under section 301(c) may not 

9 exceed the lesser of— 

10 ‘‘(i) 300 percent of private capital; or 

11 ‘‘(ii) $150,000,000. 

12 ‘‘(B) MULTIPLE LICENSES UNDER COMMON

13 CONTROL.—The maximum amount of out14 standing leverage made available to 2 or more 

15 companies licensed under section 301(c) that are 

16 commonly controlled (as determined by the Ad17 ministrator) may not exceed $225,000,000. 

18 ‘‘(C) INVESTMENTS IN WOMEN-OWNED AND

19 MINORITY-OWNED BUSINESSES AND IN LOW-IN20 COME GEOGRAPHIC AREAS.— 

21 ‘‘(i) IN GENERAL.—The maximum 

22 amount of outstanding leverage made avail23 able to— 

24 ‘‘(I) any 1 company described in 

25 clause (ii) may not exceed the lesser 

26 of— 


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1 ‘‘(aa) 300 percent of private 

2 capital; or 

3 ‘‘(bb) $175,000,000; and 

4 ‘‘(II) 2 or more companies de5 scribed in clause (ii) that are com6 monly controlled (as determined by the 

7 Administrator) may not exceed 

8 $250,000,000. 

9 ‘‘(ii) APPLICABILITY.—A company de10 scribed in this clause is a company licensed 

11 under section 301(c) that certifies in writ12 ing that not less than 50 percent of the dol13 lar amount of investments of that company 

14 shall be made in companies that, prior to 

15 that investment, are owned by women or 

16 minorities (as determined by the Adminis17 trator) or are located in a low-income geo18 graphic area (as that term is defined in sec19 tion 351). 

20 ‘‘(D) EXCEPTION.—The Administrator may, 

21 on a case-by-case basis, impose such additional 

22 terms and conditions relating to the maximum 

23 amount of outstanding leverage made available 

24 as the Administrator determines to be approVerDate Aug 31 2005 00:17 Oct 17, 2007 Jkt 069200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\S1662.RS S1662

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1 priate to minimize the risk of loss to the Admin2 istration in the event of a default.’’. 

3 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

4 Section 303(b) of the Small Business Investment Act of 

5 1958 (15 U.S.C. 683(b)) is amended by striking paragraph 

6 (4). 

7 SEC. 103. INVESTMENTS IN SMALLER ENTERPRISES. 

8 Section 303(d) of the Small Business Investment Act 

9 of 1958 (15 U.S.C. 683(d)) is amended to read as follows: 

10 ‘‘(d) INVESTMENTS IN SMALLER ENTERPRISES.—The 

11 Administrator shall require each licensee, as a condition of 

12 an application for leverage, to certify in writing that not 

13 less than 25 percent of the aggregate dollar amount of 

14 financings of that licensee shall be provided to smaller en15 terprises.’’. 

16 SEC. 104. PRIVATE CAPITAL. 

17 Section 103(9)(A)(ii) of the Small Business Invest18 ment Act of 1958 (15 U.S.C. 662(9)(A)(ii)) is amended by 

19 inserting ‘‘, except for any company licensed under section 

20 301(c) on or before September 30, 2004, that holds commit21 ments from the Administration for participating security 

22 leverage,’’ before ‘‘leverage shall not be funded based on such 

23 commitments’’. 


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1 SEC. 105. MAXIMUM INVESTMENT IN A COMPANY. 

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

3 of 1958 (15 U.S.C. 686(a)) is amended by striking ‘‘20 per 

4 centum’’ and inserting ‘‘30 percent’’. 

5 TITLE II—NEW MARKETS 

6 VENTURE CAPITAL PROGRAM 

7 SEC. 201. DIVERSIFICATION OF NEW MARKETS VENTURE 

8 CAPITAL PROGRAM. 

9 (a) SELECTION OF COMPANIES IN EACH GEOGRAPHIC

10 REGION.—Section 354 of the Small Business Investment 

11 Act of 1958 (15 U.S.C. 689c) is amended by adding at the 

12 end the following: 

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

14 participate as New Markets Venture Capital companies in 

15 the program established under this part, the Administrator 

16 shall have as a goal to select, from among companies sub17 mitting applications under subsection (b), at least 1 com18 pany from each geographic region of the Administration.’’. 

19 (b) PARTICIPATION IN NEW MARKETS VENTURE CAP20 ITAL PROGRAM.— 

21 (1) ADMINISTRATION PARTICIPATION RE22 QUIRED.—Section 353 of the Small Business Invest23 ment Act of 1958 (15 U.S.C. 689b) is amended in the 

24 matter preceding paragraph (1), by striking ‘‘under 

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

26 which the Administrator shall’’. 


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1 (2) SMALL MANUFACTURER PARTICIPATION.— 

2 Section 353(1) of the Small Business Investment Act 

3 of 1958 (15 U.S.C. 689b(1)) is amended by inserting 

4 after ‘‘section 352’’ the following: ‘‘(with a goal of at 

5 least 1 such agreement to be with a company engaged 

6 primarily in the development of and investment in 

7 small manufacturers, to the extent practicable)’’. 

8 SEC. 202. ESTABLISHMENT OF OFFICE OF NEW MARKETS 

9 VENTURE CAPITAL. 

10 Title II of the Small Business Investment Act of 1958 

11 (15 U.S.C. 671) is amended by adding at the end the fol12 lowing: 

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

14 ‘‘(a) ESTABLISHMENT.—There is established in the In15 vestment Division of the Administration, the Office of New 

16 Markets Venture Capital. 

17 ‘‘(b) DIRECTOR.—The head of the Office of New Mar18 kets Venture Capital shall be an individual appointed in 

19 the competitive service or excepted service. 

20 ‘‘(c) RESPONSIBILITIES OF DIRECTOR.—The respon21 sibilities of the head of the Office of New Markets Venture 

22 Capital include— 

23 ‘‘(1) to administer the New Markets Venture 

24 Capital Program under part B of title III; 


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

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

3 Venture Capital Program and to advise the Adminis4 trator on recommended changes to the program, based 

5 on such assessment; 

6 ‘‘(3) to work to expand the number of small busi7 ness concerns participating in the New Markets Ven8 ture Capital Program; and 

9 ‘‘(4) to encourage investment in small manufac10 turing.’’. 

11 SEC. 203. LOW-INCOME GEOGRAPHIC AREAS. 

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

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

14 (1) by striking paragraph (2); 

15 (2) by redesignating paragraphs (3) through (8) 

16 as paragraphs (2) through (7), respectively; and 

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

18 (A) in the matter preceding subparagraph 

19 (A)— 

20 (i) by striking ‘‘the term’’ and insert21 ing ‘‘The term’’; and 

22 (ii) by striking ‘‘means’’; 

23 (B) by striking subparagraph (A) and in24 serting the following: 


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

2 within the meaning of section 45D(e) of the In3 ternal Revenue Code of 1986 (relating to the new 

4 markets tax credit); and’’; and 

5 (C) in subparagraph (B), in the matter pre6 ceding clause (i), by inserting ‘‘includes’’ before 

7 ‘‘any area’’. 

8 (b) APPLICATION OF AMENDED DEFINITION TO CAP9 ITAL REQUIREMENT.—The definition of a low-income geo10 graphic area in section 351 of the Small Business Invest11 ment Act of 1958, as amended by subsection (a), shall apply 

12 to capital raised by a New Markets Venture Capital com13 pany before, on, or after the date of enactment of this Act. 

14 SEC. 204. APPLICATIONS FOR NEW MARKETS VENTURE CAP15 ITAL PROGRAM. 

16 Not later than 1 year after the date of enactment of 

17 this Act, the Administrator shall prescribe standard docu18 ments for an application for final approval by a New Mar19 kets Venture Capital company under section 354(e) of the 

20 Small Business Investment Act of 1958 (15 U.S.C. 689c(e)). 

21 The Administrator shall ensure that such documents are de22 signed to substantially reduce the cost burden of the appli23 cation process on a company making such an application. 


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1 SEC. 205. OPERATIONAL ASSISTANCE GRANTS. 

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

3 Business Investment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) 

4 is amended to read as follows: 

5 ‘‘(A) NEW MARKETS VENTURE CAPITAL

6 COMPANIES.—Notwithstanding section 354(d)(2), 

7 the amount of a grant made under this sub8 section to a New Markets Venture Capital com9 pany shall be equal to the lesser of— 

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

11 raised by the company; or 

12 ‘‘(ii) $1,000,000.’’. 

13 (b) CONFORMING AMENDMENT AND LIMITATION ON

14 TIME FOR FINAL APPROVAL OF COMPANIES.—Section 

15 354(d) of the Small Business Investment Act of 1958 (15 

16 U.S.C. 689c(d)) is amended to read as follows: 

17 ‘‘(d) REQUIREMENTS TO BE MET FOR FINAL AP18 PROVAL.—The Administrator shall grant each conditionally 

19 approved company 2 years to raise not less than $5,000,000 

20 of private capital or binding capital commitments from one 

21 or more investors (other than agencies or departments of 

22 the Federal Government) who met criteria established by 

23 the Administrator.’’. 

24 SEC. 206. AUTHORIZATION. 

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

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


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

2 striking ‘‘fiscal years 2001 through 2006’’ and insert3 ing ‘‘fiscal years 2007 through 2010’’; and 

4 (2) in paragraph (2), by striking ‘‘$30,000,000’’ 

5 and inserting ‘‘$20,000,000’’. 


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Calendar No. 422 

110TH CONGRESS 

1ST SESSION S. 1662 

[Report No. 110

–199] 

A BILL 

To amend the Small Business Investment Act of 

and for other purposes. 1958 to reauthorize the venture capital program, 

OCTOBER 16, 2007 

Reported with an amendment 


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