I
106TH CONGRESS
1ST SESSION
H. R. 2812
To provide for a community development venture capital program.
IN THE HOUSE OF REPRESENTATIVES
SEPTEMBER 8, 1999
Mr. MCGOVERN (for himself, Mr. DAVIS of Illinois, Ms. EDDIE BERNICE
JOHNSON of Texas, Mr. HINCHEY, Mr. FROST, Mr. FATTAH, Mr. MAR-
TINEZ, Ms. LEE, and Ms. MILLENDER-MCDONALD) introduced the fol-
lowing bill; which was referred to the Committee on Small Business
A BILL
To provide for a community development venture capital
program.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Community Develop-
ment Venture Capital Assistance Act of 1999’’.
SEC. 2. FINDINGS.
Congress finds that—
(1) there is a need for the development and ex-
pansion of organizations that provide private equity
capital to smaller businesses in areas in which eq-
uity-type capital is scarce, such as inner cities and
rural areas, in order to create and retain jobs for
low-income residents of those areas;
(2) to invest successfully in smaller businesses,
particularly in inner cities and rural areas, requires
highly specialized investment and management skills;
(3) there is a shortage of professionals who pos-
sess such skills and there are few training grounds
for individuals to obtain those skills;
(4) providing assistance to organizations that
provide specialized technical assistance and training
to individuals and organizations seeking to enter or
expand in this segment of the market would stimu-
late small business development and entrepreneur-
ship in economically distressed communities; and
(5) assistance from the Federal Government
could act as a catalyst to attract investment from
the private sector and would help to develop a spe-
cialized venture capital industry focused on creating
jobs, increasing business ownership, and generating
wealth in low-income communities.
SEC. 3. COMMUNITY DEVELOPMENT VENTURE CAPITAL AC-
TIVITIES.
The Small Business Act (15 U.S.C. 631 et seq.) is
amended—
(1) by redesignating section 32 as section 33;
and
(2) by inserting after section 31 the following:
‘‘SEC. 32. COMMUNITY DEVELOPMENT VENTURE CAPITAL
ACTIVITIES.
‘‘(a) DEFINITIONS.—In this section:
‘‘(1) COMMUNITY
DEVELOPMENT
VENTURE
CAPITAL ORGANIZATION.—The term ‘community de-
velopment venture capital organization’ means a pri-
vately-controlled organization that—
‘‘(A) has a primary mission of promoting
community development in low-income commu-
nities, as defined by the Administrator, through
investment in private business enterprises; or
‘‘(B) administers or is in the process of es-
tablishing a community development venture
capital fund for the purpose of making equity
investments in private business enterprises in
such communities.
‘‘(2) DEVELOPMENTAL
ORGANIZATION.—The
term ‘developmental organization’—
‘‘(A) means a public or private entity, in-
cluding a college or university, that provides
technical assistance to community development
venture capital organizations or that conducts
‘‘(2) make grants in accordance with this
section—
‘‘(A) to developmental organizations to
carry out training and research activities under
subsection (c); and
‘‘(B) to intermediary organizations to pro-
vide training and assistance under subsection
(d) to community development venture capital
organizations.
‘‘(c) TRAINING AND RESEARCH ACTIVITIES OF DE-
VELOPMENTAL ORGANIZATIONS.—
‘‘(1) IN GENERAL.—Subject to paragraph (2), a
developmental organization that receives a grant
under subsection (b)(2)(A) shall use the funds made
available through the grant for 1 or more of the fol-
lowing training and research activities:
‘‘(A) ENHANCEMENT
OF
PROFESSIONAL
SKILLS.—Creating and operating training pro-
grams to enhance the professional skills for in-
dividuals in community development venture
capital organizations or operating private com-
munity development venture capital funds.
‘‘(B) INCREASING
INTEREST
IN
COMMU-
NITY DEVELOPMENT VENTURE CAPITAL.—Cre-
ating and operating a program to select and
place students and recent graduates from busi-
ness and related professional schools as interns
with community development venture capital or-
ganizations and intermediary organizations for
a period of up to 1 year, and to provide sti-
pends for such interns during the internship pe-
riod.
‘‘(C) PROMOTING ‘BEST PRACTICES’.—Or-
ganizing an annual national conference for com-
munity development venture capital organiza-
tions to discuss and share information on the
best practices regarding issues relevant to the
creation and operation of community develop-
ment venture capital organizations.
‘‘(D) 
MOBILIZING
ACADEMIC
RE-
SOURCES.—Encouraging the formation of 1 or
more centers for the study of community devel-
opment venture capital at graduate schools of
business and management, providing funding
for the development of materials for courses on
topics in this area, and providing funding for
research on economic, operational, and policy
issues relating to community development ven-
ture capital.
‘‘(2) LIMITATION.—The Administrator shall en-
sure that not more than 25 percent of the amount
made available to carry out this section is used for
activities described in paragraph (1).
‘‘(d) USE OF GRANT FUNDS BY INTERMEDIARY OR-
GANIZATIONS.—An intermediary organization that re-
ceives a grant under subsection (b)(2)(B) shall use the
funds made available through the grant to provide training
and assistance with respect to marketing, management,
and technical issues to promote the development of com-
munity development venture capital organizations, which
assistance may include grants to community development
venture capital organizations for the start up costs and
operating support of those organizations.
‘‘(e) MATCHING REQUIREMENT.—The Administrator
shall require, as a condition of any grant made to an inter-
mediary organization under section (b)(2)(B), that a
matching amount equal to the amount of such grant be
provided from sources other than the Federal Govern-
ment.
‘‘(f) REGULATIONS.—The Administrator may pro-
mulgate such regulations as may be necessary to carry out
this section, which regulations may take effect upon
issuance.
‘‘(g) AUTHORIZATION OF APPROPRIATIONS.—There
is authorized to be appropriated to carry out this section
a total of $20,000,000 for fiscal years 2000 through
2003.’’.
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