Republic of the Philippines
HOUSE OF REPRESENTATIVES,
Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

House BiLLNo._ 2475

INTRODUCED BY REP. MARCELINO “MARCY” R. TEODORO

EXPLANATORY NOTE

Business incubators housed in academic settings provide unique educational
opportunities for students, provide entrepreneurs with enhanced access to a skilled
workforce, and bring a wealth of resources to business, academia, and communities.

Academic affiliated incubators bridge the missions of academic institutions by
bringing together education, economic development, and technology commercialization
efforts.

Studies in the United States have shown that incubator tenant companies have
an average success rate of 87 percent, and 90 percent for technology-based incubator
tenant companies. These success rates are dramatically higher than the success rates
for companies in the general economy. Incubator companies are also more likely to
remain in the same communities as they grow and provide high paying jobs and benefits
to their employees.

Business incubators help academic institutions contribute to the local goals of
sustaining economic development in their surrounding communities, Education in
entrepreneurship and other business formation skills is essential to business success
and sustainable economic development

The purpose of this Act is to encourage entrepreneurship by increasing the role
for academia in entrepreneurship by providing space and expertise in an academic
setting to house and support new and emerging small businesses:

MARCELINO “MARCY” R. TEODORO

Representative
Ast District, City of Marikina


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Philippines

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILL NO.

INTRODUCED BY REP. MARCELINO “MARCY” R. TEODORO

AN ACT TO SUPPORT BUSINESS INCUBATION IN ACADEMIC SETTINGS

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. — This Act shall be known as the "Linking Educators and
Developing Entrepreneurs for Reaching Success (LEADERS) Act.”

SEC. 2. Definition of Terms. — As used in this Act unless the context indicates
otherwise, the following definition of terms shall be adopted:

a) "Degree-Granting Institution” means all institutions for higher learning with
teaching and research facilities constituting a graduate school and professional
schools that award master's degrees and doctorates and an undergraduate
division that awards bachelor's degrees.

b) "Incubator" means an entity affiliated with or housed in a degree-granting
institution that provides space and cootdinated and specialized services to
entrepreneurial businesses which meet selected criteria during the businesses’
start-up phase, including providing services such as shared office space and
services, access to equipment, access to telecommunications and technology
services, flexible leases, specialized management assistance, access to
financing, and other coordinated business or technical support services.

c) "CHED" means the Commission on Higher Education.

SEC. 3. Program Authorized.-
a) In General. - The CHED is authorized to support the establishment and
development of incubators

b) Allocation of Funds. - From the amount appropriated under Section 8, the CHED
1) Shall use eighty percent (80%) of the amount to:
i, Make awards, on a competitive basis, in amounts of Twenty
Million Pesos (P20,000,000,00) to help acquire or renovate space
for incubators; and

ii, Make awards, on a competitive basis, in amounts of Twenty
Million Pesos (P20,000,000.00) to Fifty Million Pesos
(60,000,000.00), for developing curricula, providing services,
including preparing corporate charters, partnership agreements,
and basic contracts, assistance with patents, trademarks, and
copyrights, and technology acquisition services, or providing
programming for entrepreneurs housed in an incubator;

2) Shall use ten percent (10%) of the amount to make awards, on a
competitive basis, in amounts of P20,000,000,00 to P50,000,000.00, for
feasibility studies for determining the need for or siting of incubators; and


3) Shall use ten percent (10%) for research regarding best practices for
incubator programs, including the development of a benchmarking
system based on uniform measures, and for dissemination of information
regarding such practices.

¢) Contracts. - The CHED is authorized to contract with organizations with expertise
in business incubation practices for the purposes of carrying out subsection (b)
(3),

d) Recipients. - The CHED shall make an award-

1) Described in paragraph (b)(1) to| a nonprofit entity that has a strong
affiliation with a degree-granting institution and manages or provides
technical assistance to the degree-granting institution's affiliated
incubator, or if no non-profit entity manages or provides technical
assistance to the incubator, to the degree-granting institution managing
the incubator; and

2) Described in paragraph (b)(2) to a degree-granting institution, or a non-
profit municipality, city, township, or community development
organization

SEC. 4. Uses of Funds. - Funds awarded under section 3(b)(1) may be used for-
a) Curriculum, training, or technical assistance developed by academic faculty with
Participation from entrepreneurship experts and local government leaders;

b) Programming that contributes to a coordinated set of business assistance tools,
such as developing management teams, providing workforce development,
forming strategic alliances, developing capital formation networks, and
developing customized plans to help entrepreneurs meet the challenges of doing
business in their specific communities; and

¢) Hiring staff to coordinate the activities described in paragraph (a) or (b) or for
curriculum development

SEC. 5. Applications. -

a) In General. — Each entity desiring assistance under this Act shall submit an

application to the CHED at such time, in such manner, and accompanied by such
information as the CHED may require.

b) Contents. - Each application shall contain an assurance that the activities to be
assisted —
1) Have the support of the municipality or city, in which the incubator is
housed or proposed to be housed; and

2) Are consistent with the local economic development plan or strategic
master plan.

©) Priority. - The CHED shall give priority to funding applications under this Act that
provide strong educational opportunities to students in entrepreneurship, and that
fequire significant collaboration between businesses, academia, and local
government and economic development leaders

d) Consideration. —
1) In General. In addition to applications from other appropriate sources,
the CHED may give consideration to funding applications under this Act
that support —

i. The building of pew incubators;
ii, Incubators located in economically distressed areas;
il, Incubators with successful graduation rates for tenant companies;


iv. Incubators that have shown demonstrable economic benefits in
their surrounding communities;

vy. Incubators that work with faculty entrepreneurs or university-
based research; or

vi. Incubators located in rural areas where the presence of an
incubator may enhance and diversify the area's economy through
expanded technology commercialization

2) Definition of Consideration. - In this subsection, the term "consideration"
does not mean priority

SEC. 6. Matching Funds. - Each entity receiving government assistance under Section
3(b)(1) shall contribute matching funds, in an amount equal to the amount of government
assistance received under this Act, toward the costs of the activities assisted under this
Act. The non-government share required under this section may be provided in the form
of in-kind contributions.

SEC. 7. Report. - The CHED, at the end of the third year for which assistance is
provided under this Act, shall prepare and submit to Congress a report that —

a) Describes the most effective or innovative additions to curricula developed under
this Act;

b) Contains a comparison of small business survival rates for small businesses that
started up in incubators versus small businesses that did not so start;

©) Describes factors leading to any success of incubator businesses;

d) Describes the best role for degree-granting institutions in business incubation:
and

e) Contains a comparison of academic-affiliated incubators of specific missions and
‘ages supported under this Act with incubators with similar missions and ages that
are not supported under this Act.

SEC. 8, Authorization of Appropriations. - For the purpose of carrying out this Act,
‘such sums, as may be deemed appropriate by the CHED, are hereby authorized to be
appropriated from the National Treasury.

SEC. 9. Separability Clause. - Should any provision of this Act be declared invalid or
unconstitutional, the validity or constitutionality of the other provisions shall not be
affected thereby,

SEC. 10. Repealing Clause. - All laws, decrees, executive orders, rules and
regulations, and other issuances or parts theteof which are inconsistent with the
provisions of this Act are hereby repealed, amended or modified accordingly.

SEC. 11. Effectivity. - This Act shall take effect fifteen (15) days after its publication in
at least two (2) newspapers of general circulation

Approved,