II 

109TH CONGRESS 

2D SESSION S. 3680 

To amend the Small Business Investment Act of 1958 to reauthorize and 

expand the New Markets Venture Capital Program, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 18, 2006 

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 and expand the New Markets 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 ‘‘Securing Equity for 

5 the Economic Development of Low Income Areas Act of 

6 2006’’. 

7 SEC. 2. DEFINITIONS. 

8 In this Act— 


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1 (1) the terms ‘‘Administration’’ and ‘‘Adminis2 trator’’ mean the Small Business Administration 

3 and the Administrator thereof, respectively; 

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

5 the same meaning as in section 351 of the Small 

6 Business Investment Act of 1958 (15 U.S.C. 689), 

7 as amended by this Act; 

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

9 company’’ has the same meaning as in section 351 

10 of the Small Business Investment Act of 1958 (15 

11 U.S.C. 689); and 

12 (4) the term ‘‘New Markets Venture Capital 

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

14 III of the Small Business Investment Act of 1958 

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

16 SEC. 3. EXPANSION OF NEW MARKETS VENTURE CAPITAL 

17 PROGRAM. 

18 (a) SELECTION OF COMPANIES IN EACH GEO19 GRAPHIC REGION.—Section 354 of the Small Business In20 vestment Act of 1958 (15 U.S.C. 689c) is amended by 

21 adding at the end the following: 

22 ‘‘(f) GEOGRAPHIC REQUIREMENT.—In selecting com23 panies to participate as New Markets Venture Capital 

24 companies in the program established under this part, the 

25 Administrator shall select, to the extent practicable, from 


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1 among companies submitting applications under sub2 section (b), not fewer than 1 company from each geo3 graphic region of the Administration.’’. 

4 (b) PARTICIPATION IN NEW MARKETS VENTURE

5 CAPITAL PROGRAM.— 

6 (1) ADMINISTRATION PARTICIPATION RE7 QUIRED.—Section 353 of the Small Business Invest8 ment Act of 1958 (15 U.S.C. 689b) is amended in 

9 the matter preceding paragraph (1), by striking 

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

11 ‘‘under which the Administrator shall’’. 

12 (2) SMALL MANUFACTURER PARTICIPATION

13 AGREEMENTS REQUIRED.—Section 353 of the Small 

14 Business Investment Act of 1958 (15 U.S.C. 689b) 

15 is amended— 

16 (A) by striking ‘‘In accordance with this 

17 part,’’ and inserting the following: 

18 ‘‘(a) IN GENERAL.—In accordance with this part,’’; 

19 (B) in subsection (a)(1), as so designated 

20 by this paragraph, by inserting after ‘‘section 

21 352’’ the following: ‘‘(with not fewer than 1 

22 such agreement to be with a company engaged 

23 primarily in development of and investment in 

24 small manufacturers, to the extent prac25 ticable)’’; and 


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1 (C) by adding at the end the following: 

2 ‘‘(b) RULE OF CONSTRUCTION.—Subsection (a)(1) 

3 shall not be construed to authorize the Administrator to 

4 decline to enter into a participation agreement with a com5 pany solely on the basis that the company is not engaged 

6 primarily in development of and investment in small man7 ufacturers.’’. 

8 SEC. 4. REPORT TO CONGRESS. 

9 Not later than 1 year after the date of enactment 

10 of this Act, the Administrator shall submit to Congress 

11 a report evaluating the success of the New Markets Ven12 ture Capital Program in promoting economic development 

13 and creating wealth and job opportunities in low-income 

14 geographic areas, among individuals living in such areas, 

15 by encouraging developmental venture capital investments 

16 in smaller enterprises. 

17 SEC. 5. ESTABLISHMENT OF OFFICE OF NEW MARKETS 

18 VENTURE CAPITAL. 

19 Title II of the Small Business Investment Act of 

20 1958 (15 U.S.C. 671) is amended by adding at the end 

21 the following: 

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

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

24 Investment Division of the Administration, the ‘Office of 

25 New Markets Venture Capital’. 


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1 ‘‘(b) DIRECTOR.—The Office of New Markets Ven2 ture Capital shall be headed by a Director, who shall be 

3 appointed by the Administrator. 

4 ‘‘(c) RESPONSIBILITIES OF DIRECTOR.—Subject to 

5 the direction and control of the Administrator, the respon6 sibilities of the Director of the Office of New Markets Ven7 ture Capital are— 

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

9 Capital Program under part B of title III; 

10 ‘‘(2) to periodically assess the nature and scope 

11 of the New Markets Venture Capital Program and 

12 to advise the Administrator on recommended 

13 changes to the program, based on such assessment; 

14 ‘‘(3) to work to expand the number of small 

15 business concerns participating in the New Markets 

16 Venture Capital Program; 

17 ‘‘(4) to encourage investment in small manufac18 turing; and 

19 ‘‘(5) to perform such other duties relating to 

20 such responsibilities as the Administrator may pro21 vide.’’. 

22 SEC. 6. LOW-INCOME GEOGRAPHIC AREAS. 

23 (a) MODIFICATION OF DEFINITION OF LOW-INCOME

24 GEOGRAPHIC AREA FOR PURPOSES OF NEW MARKETS

25 VENTURE CAPITAL PROGRAM.— 


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1 (1) IN GENERAL.—Section 351 of the Small 

2 Business Investment Act of 1958 (15 U.S.C. 689) is 

3 amended— 

4 (A) by striking paragraphs (2) and (3) and 

5 inserting the following: 

6 ‘‘(2) LOW-INCOME GEOGRAPHIC AREA.—The 

7 term ‘low-income geographic area’ has the meaning 

8 given the term ‘low-income community’ in section 

9 45D of the Internal Revenue Code of 1986 (relating 

10 to the new markets tax credit).’’; and 

11 (B) by redesignating paragraphs (4) 

12 through (8) as paragraphs (3) through (7), re13 spectively. 

14 (2) RETROACTIVE APPLICATION OF AMENDED

15 DEFINITION TO CAPITAL REQUIREMENT.—The defi16 nition of a low-income geographic area in section 

17 351(2) of the Small Business Investment Act of 

18 1958, as amended by paragraph (1), shall apply to 

19 private capital raised under section 354(d)(1) of the 

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

21 689c(d)(1)) before, on, or after the date of enact22 ment of this Act. 

23 (b) STUDY ON AVAILABILITY OF EQUITY CAPITAL.— 

24 (1) STUDY REQUIRED.—Not later than the end 

25 of the 180-day period beginning on the date of enVerDate Aug 31 2005 02:15 Jul 20, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3680.IS S3680

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1 actment of this Act, the Chief Counsel for Advocacy 

2 of the Administration shall conduct a study on the 

3 availability of equity capital in low-income geo4 graphic areas. 

5 (2) REPORT.—Not later than 90 days after the 

6 completion of the study under paragraph (1) the Ad7 ministrator shall submit to Congress a report con8 taining the findings of the study required under 

9 paragraph (1) and any recommendations of the Ad10 ministrator based on such study. 

11 SEC. 7. LIMITATION ON TIME FOR FINAL APPROVAL OF 

12 COMPANIES. 

13 Section 354(d) of the Small Business Investment Act 

14 of 1958 (15 U.S.C. 689c(d)) is amended by striking ‘‘a 

15 period of time, not to exceed 2 years,’’ and inserting ‘‘2 

16 years’’. 

17 SEC. 8. APPLICATIONS FOR NEW MARKETS VENTURE CAP18 ITAL PROGRAM. 

19 Not later than 60 days after the date of enactment 

20 of this Act, the Administrator shall prescribe standard 

21 documents for an application for final approval by a New 

22 Markets Venture Capital company under section 354(e) 

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

24 689c(e)). The Administrator shall ensure that such docu25 ments are designed to substantially reduce the cost burden 


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1 of the application process on a company making such an 

2 application. 

3 SEC. 9. OPERATIONAL ASSISTANCE GRANTS. 

4 Section 358(a)(4)(A) of the Small Business Invest5 ment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) is amended 

6 to read as follows: 

7 ‘‘(A) NEW MARKETS VENTURE CAPITAL

8 COMPANIES.—Notwithstanding section 

9 354(d)(2), the amount of a grant made under 

10 this subsection to a New Markets Venture Cap11 ital company shall be equal to the lesser of— 

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

13 raised by the company; or 

14 ‘‘(ii) $1,000,000.’’. 

15 SEC. 10. AUTHORIZATION OF APPROPRIATIONS. 

16 (a) REAUTHORIZATION OF NEW MARKETS VENTURE

17 CAPITAL PROGRAM.—Section 368(a) of the Small Busi18 ness Investment Act of 1958 (15 U.S.C. 689q(a)) is 

19 amended in the matter preceding paragraph (1), by strik20 ing ‘‘fiscal years 2001 through 2006’’ and inserting ‘‘fiscal 

21 years 2006 through 2009’’. 

22 (b) OFFICE OF NEW MARKETS VENTURE CAP23 ITAL.—There is authorized to be appropriated to carry out 


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1 section 202 of the Small Business Investment Act of 1958, 

2 as added by this Act, $1,000,000. 

Æ 


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