I 

112TH CONGRESS 

1ST SESSION H. R. 2872 

To amend the Small Business Investment Act of 1958 to improve the New 

Markets Venture Capital Program, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 8, 2011 

Ms. VELA ́ZQUEZ introduced the following bill; which was referred to the 

Committee on Small Business 

A BILL 

To amend the Small Business Investment Act of 1958 to 

improve 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Job Creation and Urban Revitalization Act of 2011’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Increased investment in job creating small business concerns. 

Sec. 3. Updating definition of low-income geographic area. 

Sec. 4. Expanded uses for operational assistance for small business concerns located in areas of high unemployment. 


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Sec. 5. Definition of area of high unemployment. 

Sec. 6. Nationwide distribution of companies to generate new employment opportunities. 

Sec. 7. Limitation on time for final approval. 

Sec. 8. Elimination of matching requirement for areas with high unemployment 

and areas designated as an urban manufacturing revitalization 

area. 

Sec. 9. Urban manufacturing revitalization areas. 

Sec. 10. Simplified formula for operational assistance grants. 

Sec. 11. Expanding operational assistance to conditionally approved companies. 

Sec. 12. Authorization of appropriations. 

Sec. 13. Streamlined application for New Markets Venture Capital Program. 

1 SEC. 2. INCREASED INVESTMENT IN JOB CREATING SMALL 

2 BUSINESS CONCERNS. 

3 (a) DEVELOPMENTAL VENTURE CAPITAL AND PAR4 TICIPATION AGREEMENTS.—Section 351 of the Small 

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

6 amended— 

7 (1) in paragraph (1) by inserting after ‘‘geo8 graphic areas’’ the following: ‘‘or encouraging the 

9 growth or continuation of small business concerns 

10 located in areas of high unemployment’’; and 

11 (2) in paragraph (6)(B) by inserting after ‘‘geo12 graphic areas’’ the following: ‘‘or in small business 

13 concerns located in areas of high unemployment’’. 

14 (b) PURPOSES.—Section 352 of the Small Business 

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

16 (1) by striking paragraph (1) and inserting the 

17 following: 

18 ‘‘(1) to promote economic development in low19 income geographic areas and to create job opportu20 nities in areas of high unemployment by encouraging 


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1 developmental venture capital investments in smaller 

2 enterprises and small business concerns primarily lo3 cated in such areas; and’’; and 

4 (2) in paragraph (2)— 

5 (A) in the matter preceding subparagraph 

6 (A) by inserting after ‘‘geographic areas’’ the 

7 following: ‘‘and small business concerns located 

8 in areas of high unemployment’’; 

9 (B) in subparagraph (B) by inserting after 

10 ‘‘geographic areas’’ the following: ‘‘or in small 

11 business concerns located in areas of high un12 employment’’; and 

13 (C) in subparagraph (C) by inserting after 

14 ‘‘smaller enterprises’’ the following: ‘‘and small 

15 business concerns’’. 

16 (c) ELIGIBILITY, APPLICATIONS, AND REQUIRE17 MENTS FOR FINAL APPROVAL.—Section 354 of the Small 

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

19 amended— 

20 (1) in subsection (a)(3) by inserting after ‘‘geo21 graphic areas’’ the following: ‘‘or investing in small 

22 business concerns located in areas of high unemploy23 ment’’; 

24 (2) in subsection (b)— 


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1 (A) in paragraph (1) by inserting after 

2 ‘‘geographic areas’’ the following: ‘‘or in small 

3 business concerns located in areas of high un4 employment’’; and 

5 (B) in paragraph (4) by inserting after 

6 ‘‘smaller enterprises’’ the following: ‘‘or small 

7 business concerns’’; and 

8 (3) in subsection (d)— 

9 (A) in paragraph (1)— 

10 (i) by striking ‘‘Each’’ and inserting 

11 the following: 

12 ‘‘(A) IN GENERAL.—Except as provided in 

13 subparagraphs (B) and (C), each’’; and 

14 (ii) by adding at the end the fol15 lowing: 

16 ‘‘(B) SMALL BUSINESS CONCERNS LO17 CATED IN AREAS OF HIGH UNEMPLOYMENT.— 

18 Each conditionally approved company engaged 

19 primarily in development of and investment in 

20 small business concerns located in areas of high 

21 unemployment shall raise not less than 

22 $3,000,000 of private capital or binding capital 

23 commitments from one or more investors (other 

24 than agencies or departments of the Federal 


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1 Government) who met criteria established by 

2 the Administrator.’’; and 

3 (B) in paragraph (2)(A) by inserting after 

4 ‘‘smaller enterprises’’ the following: ‘‘or small 

5 business concerns’’. 

6 (d) OPERATIONAL ASSISTANCE GRANTS.—Section 

7 358 of the Small Business Investment Act of 1958 (15 

8 U.S.C. 689g) is amended— 

9 (1) in subsection (a)(1) by inserting after 

10 ‘‘smaller enterprises’’ the following: ‘‘and small busi11 ness concerns’’; and 

12 (2) in subsection (b)(1) by inserting after 

13 ‘‘smaller enterprises’’ the following: ‘‘and small busi14 ness concerns’’. 

15 SEC. 3. UPDATING DEFINITION OF LOW-INCOME GEO16 GRAPHIC AREA. 

17 Section 351 of the Small Business Investment Act 

18 of 1958 (15 U.S.C. 689), as amended by section 2 of this 

19 Act, is further amended— 

20 (1) by striking paragraphs (2) and (3); 

21 (2) by inserting after paragraph (1) the fol22 lowing: 

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

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

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


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1 45D(e) of the Internal Revenue Code of 1986, ex2 cept that, without regard to that meaning, the term 

3 includes an area of high unemployment.’’; and 

4 (3) by redesignating paragraphs (4) through 

5 (8) as paragraphs (3) through (7), respectively. 

6 SEC. 4. EXPANDED USES FOR OPERATIONAL ASSISTANCE 

7 FOR SMALL BUSINESS CONCERNS LOCATED 

8 IN AREAS OF HIGH UNEMPLOYMENT. 

9 Section 351 of the Small Business Investment Act 

10 of 1958 (15 U.S.C. 689), as amended by this Act, is fur11 ther amended in paragraph (4) (as so redesignated by sec12 tion 3 of this Act) by inserting after ‘‘business develop13 ment’’ the following: ‘‘and, with respect to a small busi14 ness concern located in an area of high unemployment, 

15 assistance that assists the concern with retooling, updat16 ing, or replacing machinery or equipment’’. 

17 SEC. 5. DEFINITION OF AREA OF HIGH UNEMPLOYMENT. 

18 Section 351 of the Small Business Investment Act 

19 of 1958 (15 U.S.C. 689), as amended by this Act, is fur20 ther amended by adding at the end the following: 

21 ‘‘(8) AREA OF HIGH UNEMPLOYMENT.—The 

22 term ‘area of high unemployment’ means a geo23 graphic area that the Administrator determines has 

24 an unemployment rate that exceeds the national un25 employment rate.’’. 


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1 SEC. 6. NATIONWIDE DISTRIBUTION OF COMPANIES TO 

2 GENERATE NEW EMPLOYMENT OPPORTUNI3 TIES. 

4 Paragraph (3) of section 354(c) of the Small Busi5 ness Investment Act of 1958 (15 U.S.C. 689c(c)) is 

6 amended to read as follows: 

7 ‘‘(3) GEOGRAPHIC EXPANSION.—In selecting 

8 companies under paragraph (1), the Administrator 

9 shall consider the need to promote investment na10 tionwide and shall, to the extent practicable, select 

11 at least 1 company from each geographic region of 

12 the Small Business Administration.’’. 

13 SEC. 7. LIMITATION ON TIME FOR FINAL APPROVAL. 

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

15 of 1958 (15 U.S.C. 689c(d)) is amended in the matter 

16 preceding paragraph (1) by striking ‘‘a period of time, not 

17 to exceed 2 years,’’ and inserting ‘‘2 years’’. 

18 SEC. 8. ELIMINATION OF MATCHING REQUIREMENT FOR 

19 AREAS WITH HIGH UNEMPLOYMENT AND 

20 AREAS DESIGNATED AS AN URBAN MANUFAC21 TURING REVITALIZATION AREA. 

22 Section 354(d)(2)(A)(i)(III) of the Small Business 

23 Investment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)(III)) 

24 is amended by inserting after ‘‘under paragraph (1)’’ the 

25 following: ‘‘, except that this subclause shall not apply to 

26 a company the Administrator determines is primarily servVerDate Mar 15 2010 04:24 Sep 09, 2011 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2872.IH H2872

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1 ing small business concerns located in an area of high un2 employment or in an area designated as an urban manu3 facturing revitalization area under subsection (f)’’. 

4 SEC. 9. URBAN MANUFACTURING REVITALIZATION AREAS. 

5 (a) IN GENERAL.—Section 354 of the Small Business 

6 Investment Act of 1958 (15 U.S.C. 689c), as amended 

7 by this Act, is further amended by adding at the end the 

8 following: 

9 ‘‘(f) URBAN MANUFACTURING REVITALIZATION

10 AREAS.— 

11 ‘‘(1) IN GENERAL.—In approving companies 

12 under this section to participate in the New Markets 

13 Venture Capital Program, the Administrator may 

14 approve a company to serve, throughout all States, 

15 solely small business concerns located in areas des16 ignated as an urban manufacturing revitalization 

17 area under paragraph (2). 

18 ‘‘(2) DESIGNATION.—For purposes of para19 graph (1), the Administrator may designate an area 

20 as an urban manufacturing revitalization area if— 

21 ‘‘(A) the area is a low-income geographic 

22 area; 

23 ‘‘(B) the Administrator determines the 

24 area is an urban area; and 


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1 ‘‘(C) the Administrator determines there 

2 is, or was during the preceding 10-year period, 

3 a substantial presence of businesses in the area 

4 the primary business of which is classified in 

5 sector 31, 32, or 33 of the North American In6 dustrial Classification System. 

7 ‘‘(3) CONSIDERATION.—In approving a com8 pany under paragraph (1), the Administrator shall 

9 give priority to a company that demonstrates a 

10 strong commitment to and experience in revitalizing 

11 and redeveloping urban areas through investment in 

12 and the provision of management and technical as13 sistance to small business concerns in those areas. 

14 ‘‘(4) COORDINATION.—The Administrator shall 

15 work to coordinate and make available to small busi16 ness concerns served by a company approved under 

17 paragraph (1) the resources provided under the en18 trepreneurial development, contracting, and financ19 ing programs of the Administration. 

20 ‘‘(5) INCREASING PROCUREMENT OPPORTUNI21 TIES.—The Administrator shall designate at least 1 

22 procurement center representative or commercial 

23 market representative to identify procurement op24 portunities for small business concerns served by a 

25 company approved under paragraph (1).’’. 


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1 (b) CAPITAL REQUIREMENT.—Section 354(d)(1) of 

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

3 689c(d)(1)) is amended by adding at the end the fol4 lowing: 

5 ‘‘(C) SMALL BUSINESS CONCERNS LO6 CATED IN URBAN MANUFACTURING REVITAL7 IZATION AREAS.—Each conditionally approved 

8 company engaged primarily in development of 

9 and investment in small business concerns lo10 cated in areas designated as urban manufac11 turing revitalization areas under subsection (f) 

12 shall raise not less than $2,000,000 of private 

13 capital or binding capital commitments from 

14 one or more investors (other than agencies or 

15 departments of the Federal Government) who 

16 met criteria established by the Administrator.’’. 

17 SEC. 10. SIMPLIFIED FORMULA FOR OPERATIONAL ASSIST18 ANCE GRANTS. 

19 Subparagraph (A) of section 358(a)(4) of the Small 

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

21 is amended— 

22 (1) by striking ‘‘shall be equal to’’ and all that 

23 follows through the period at the end and inserting 

24 ‘‘shall be equal to the lesser of—’’; and 

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


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1 ‘‘(i) 10 percent of the resources (in 

2 cash or in kind) raised by the company 

3 under section 354(d)(2); or 

4 ‘‘(ii) $1,000,000.’’. 

5 SEC. 11. EXPANDING OPERATIONAL ASSISTANCE TO CONDI6 TIONALLY APPROVED COMPANIES. 

7 Section 358(a) of the Small Business Investment Act 

8 of 1958 (15 U.S.C. 689g(a)) is amended by adding at the 

9 end the following: 

10 ‘‘(6) GRANTS TO CONDITIONALLY APPROVED

11 COMPANIES.— 

12 ‘‘(A) IN GENERAL.—Subject to the provi13 sions of this paragraph, upon the request of a 

14 company conditionally approved under section 

15 354(c), the Administrator is authorized to make 

16 a grant to the company under this subsection. 

17 ‘‘(B) REPAYMENT BY COMPANIES NOT AP18 PROVED.—If a company receives a grant under 

19 this paragraph and does not receive final ap20 proval under section 354(e), the company shall 

21 repay the amount of the grant to the Adminis22 trator. 

23 ‘‘(C) DEDUCTION FROM GRANT TO AP24 PROVED COMPANY.—If a company receives a 

25 grant under this paragraph and receives final 


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1 approval under section 354(e), the Adminis2 trator shall deduct the amount of such grant 

3 from the amount of any immediately succeeding 

4 grant the company receives for operational as5 sistance. 

6 ‘‘(D) AMOUNT OF GRANT.—No company 

7 may receive a grant of more than $50,000 

8 under this paragraph.’’. 

9 SEC. 12. AUTHORIZATION OF APPROPRIATIONS. 

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

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

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

13 striking ‘‘fiscal years 2001 through 2006’’ and in14 serting ‘‘fiscal years 2012 and 2013’’; 

15 (2) in paragraph (1)— 

16 (A) by striking ‘‘$150,000,000’’ and in17 serting ‘‘$75,000,000’’; and 

18 (B) by inserting before the period at the 

19 end the following: ‘‘, of which not less than 50 

20 percent shall be used to guarantee debentures 

21 of companies primarily serving small business 

22 concerns located in areas of high unemploy23 ment’’; and 

24 (3) in paragraph (2)— 


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1 (A) by striking ‘‘$30,000,000’’ and insert2 ing ‘‘$15,000,000’’; and 

3 (B) by inserting before the period at the 

4 end the following: ‘‘, of which not less than 50 

5 percent shall be used to make grants to compa6 nies primarily serving small business concerns 

7 located in areas of high unemployment’’. 

8 SEC. 13. STREAMLINED APPLICATION FOR NEW MARKETS 

9 VENTURE CAPITAL PROGRAM. 

10 Not later than 60 days after the date of enactment 

11 of this Act, the Administrator of the Small Business Ad12 ministration shall prescribe standard documents for a New 

13 Markets Venture Capital company final approval applica14 tion with respect to section 354(e) of the Small Business 

15 Investment Act of 1958 (15 U.S.C. 689c(e)). The Admin16 istrator shall ensure that the standard documents are de17 signed to substantially reduce the cost burden of the appli18 cation process for companies. 

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