SEC. 202. IMPROVED NATIONWIDE DISTRIBUTION. 
Section 354 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689c) is amended by adding at the 
end the following: 
‘‘(f) GEOGRAPHIC EXPANSION.—From among com-
panies submitting applications under subsection (b), the 
Administrator shall consider the selection criteria and na-
tionwide distribution under subsection (c) and shall, to the 
maximum extent practicable, approve at least one com-
pany from each geographic region of the Small Business 
Administration.’’. 
SEC. 203. INCREASED INVESTMENT IN SMALL MANUFAC-
TURERS. 
Section 354(d)(1) of the Small Business Investment 
Act of 1958 (15 U.S.C. 689c(d)(1)) is amended— 
(1) by striking ‘‘Each’’ and inserting the fol-
lowing: 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), each’’; and 
(2) by adding at the end the following: 
‘‘(B) SMALL MANUFACTURER INVESTMENT 
CAPITAL
REQUIREMENTS.—Each conditionally 
approved company engaged primarily in devel-
opment of and investment in small manufactur-
ers shall raise not less than $3,000,000 of pri-
vate capital or binding capital commitments
from one or more investors (other than agencies 
or departments of the Federal Government) 
who meet criteria established by the Adminis-
trator.’’. 
SEC. 204. UPDATING DEFINITION OF LOW-INCOME GEO-
GRAPHIC AREA. 
Section 351 of the Small Business Investment Act 
of 1958 (15 U.S.C. 689) is amended— 
(1) by striking paragraphs (2) and (3); 
(2) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) LOW-INCOME
GEOGRAPHIC
AREA.—The 
term ‘low-income geographic area’ has the same 
meaning given the term ‘low-income community’ in 
section 45D(e) of the Internal Revenue Code of 
1986 (26 U.S.C. 45D(e)).’’; and 
(3) by redesignating paragraphs (4) through 
(8) as (3) through (7), respectively. 
SEC. 205. STUDY ON AVAILABILITY OF EQUITY CAPITAL. 
(a) STUDY REQUIRED.—Before the expiration of the 
180-day period that begins on the date of the enactment 
of this Act, the Chief Counsel for Advocacy of the Small 
Business Administration shall conduct a study on the 
availability of equity capital in low-income urban and rural 
areas.
(b) REPORT.—Not later than 90 days after the com-
pletion of the study under subsection (a) the Adminis-
trator of the Small Business Administration shall submit 
to Congress a report containing the findings of the study 
required under subsection (a) and any recommendations 
of the Administrator based on such study. 
SEC. 206. EXPANDING OPERATIONAL ASSISTANCE TO CON-
DITIONALLY APPROVED COMPANIES. 
(a) OPERATIONAL ASSISTANCE GRANTS TO CONDI-
TIONALLY APPROVED COMPANIES.—Section 358(a) of the 
Small Business Investment Act of 1958 (15 U.S.C. 
689(a)) is amended by adding at the end the following 
new paragraph: 
‘‘(6) GRANTS
TO
CONDITIONALLY
APPROVED 
COMPANIES.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (A) and (B), upon the request of a com-
pany 
conditionally-approved 
under 
section 
354(c), the Administrator shall make a grant to 
the company under this subsection. 
‘‘(B) REPAYMENT BY COMPANIES NOT AP-
PROVED.—If a company receives a grant under 
paragraph (6) and does not enter into a partici-
pation agreement for final approval, the com-
pany shall repay the amount of the grant to the 
Administrator. 
‘‘(C) DEDUCTION
FROM
GRANT
TO
AP-
PROVED
COMPANY.—If a company receives a 
grant under paragraph (6) and receives final 
approval under section 354(e), the Adminis-
trator shall deduct the amount of the grant 
under that paragraph from the total grant 
amount that the company receives for oper-
ational assistance. 
‘‘(D) AMOUNT
OF
GRANT.—No company 
may receive a grant of more than $50,000 
under this paragraph.’’. 
(b) LIMITATION ON TIME FOR FINAL APPROVAL.— 
Section 354(d) of the Small Business Investment Act of 
1958 (15 U.S.C. 689c(d)) is amended in the matter pre-
ceding paragraph (1) by striking ‘‘a period of time, not 
to exceed 2 years,’’ and inserting ‘‘2 years’’. 
(c) EXPANDED DEFINITION OF OPERATIONAL AS-
SISTANCE.—Section 351(5) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 689(5)) is amended by in-
serting before the period at the end the following: ‘‘, in-
cluding assistance on how to implement energy efficiency 
and sustainable practices that reduce the use of non-re-
newable resources or minimize environmental impact and 
reduce overall costs and increase health of employees’’. 
SEC. 207. STREAMLINED APPLICATION FOR NEW MARKETS 
VENTURE CAPITAL PROGRAM. 
Not later than 60 days after the date of the enact-
ment of this section, the Administrator of the Small Busi-
ness Administration shall prescribe standard documents 
for final New Markets Venture Capital Company approval 
application under section 354(e) of the Small Business In-
vestment Act of 1958 (15 U.S.C. 689c(e)). The Adminis-
trator shall assure that the standard documents shall be 
designed to substantially reduce the cost burden of the ap-
plication process on the companies involved. 
SEC. 208. ELIMINATION OF MATCHING REQUIREMENT. 
Section 354(d)(2)(A)(i) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 689c(d)(2)(A)(i)) is amend-
ed— 
(1) in subclause (I) by adding ‘‘and’’ at the 
end; 
(2) in subclause (II) by striking ‘‘and’’ at the 
end; and 
(3) by striking subclause (III).
SEC. 209. SIMPLIFIED FORMULA FOR OPERATIONAL AS-
SISTANCE GRANTS. 
Section 358(a)(4)(A) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 689g(a)(4)(A)) is amend-
ed— 
(1) by striking ‘‘shall be equal to’’ and all that 
follows through the period at the end and by insert-
ing ‘‘shall be equal to the lesser of—’’; and 
(2) by adding at the end the following: 
‘‘(i) 10 percent of the resources (in 
cash or in kind) raised by the company 
under section 354(d)(2); or 
‘‘(ii) $1,000,000.’’. 
SEC. 210. AUTHORIZATION OF APPROPRIATIONS AND DEDI-
CATION TO SMALL MANUFACTURING. 
Section 368(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 689q(a)) is amended— 
(1) by striking ‘‘fiscal years 2001 through 
2006’’ and inserting ‘‘fiscal years 2008 through 
2010’’; 
(2) in paragraph (1)— 
(A) by striking ‘‘$150,000,000’’ and in-
serting ‘‘$30,000,000’’; and 
(B) by inserting before the period at the 
end the following: ‘‘, of which not less than one- 
quarter shall be used to guarantee debentures
of companies engaged primarily in development 
of and investment in small manufacturers’’; and 
(3) in paragraph (2)— 
(A) by striking ‘‘$30,000,000’’ and insert-
ing ‘‘$5,000,000’’; and 
(B) by inserting before the period at the 
end the following: ‘‘, of which not less than one- 
quarter shall be used to make grants to compa-
nies engaged primarily in development of and 
investment in small manufacturers’’. 
TITLE III—ANGEL INVESTMENT 
PROGRAM 
SEC. 301. ESTABLISHMENT OF ANGEL INVESTMENT PRO-
GRAM. 
(a) ESTABLISHMENT.—Title III of the Small Busi-
ness Investment Act of 1958 (15 U.S.C. 681 et seq.) is 
amended by adding at the end the following new part: 
‘‘PART C—ANGEL INVESTMENT PROGRAM 
‘‘SEC. 380. OFFICE OF ANGEL INVESTMENT. 
‘‘(a) ESTABLISHMENT.—There is established, in the 
Investment Division of the Small Business Administra-
tion, the Office of Angel Investment. 
‘‘(b) DIRECTOR.—The head of the Office of Angel In-
vestment is the Director of Angel Investment.
‘‘(c) DUTIES.—Subject to the direction of the Sec-
retary, the Director shall perform the following functions: 
‘‘(1) Provide support for the development of 
angel investment opportunities for small business 
concerns. 
‘‘(2) Administer the Angel Investment Program 
under section 382 of this Act. 
‘‘(3) Administer the Federal Angel Network 
under section 383 of this Act. 
‘‘(4) Administer the grant program for the de-
velopment of angel groups under section 384 of this 
Act. 
‘‘(5) Perform such other duties consistent with 
this section as the Administrator shall prescribe. 
‘‘SEC. 381. DEFINITIONS. 
‘‘In this part: 
‘‘(1) The term ‘angel group’ means 10 or more 
angel investors organized for the purpose of making 
investments in local or regional small business con-
cerns that— 
‘‘(A) consists primarily of angel investors; 
‘‘(B) requires angel investors to be accred-
ited investors; and
‘‘(C) actively involves the angel investors in 
evaluating and making decisions about making 
investments. 
‘‘(2) The term ‘angel investor’ means an indi-
vidual who— 
‘‘(A) qualifies as an accredited investor (as 
that term is defined under Rule 501 of Regula-
tion D of the Securities and Exchange Commis-
sion (17 CFR 230.501)); 
‘‘(B) provides capital to or makes invest-
ments in a small business concern. 
‘‘(3) The term ‘small business concern owned 
and controlled by veterans’ has the meaning given 
that term under section 3(q)(3) of the Small Busi-
ness Act (15 U.S.C. 632(q)(3)). 
‘‘(4) The term ‘small business concern owned 
and controlled by women’ has the meaning given 
that term under section 8(d)(3)(D) of such Act (15 
U.S.C. 637(d)(3)(D)). 
‘‘(5) The term ‘socially and economically dis-
advantaged small business concern’ has the meaning 
given that term under section 8(a)(4)(A) of such Act 
(15 U.S.C. 637(a)(4)(A)).
‘‘SEC. 382. ANGEL INVESTMENT PROGRAM. 
‘‘(a) IN GENERAL.—The Director of Angel Invest-
ment shall establish and carry out a program, to be known 
as the Angel Investment Program, to provide financing to 
approved angel groups for the purpose of providing ven-
ture capital investment in small businesses in their com-
munities. 
‘‘(b) ELIGIBILITY.—To be eligible to receive financ-
ing under this section, an angel group shall— 
‘‘(1) have demonstrated experience making in-
vestments in local or regional small business con-
cerns; 
‘‘(2) have established protocols and a due dili-
gence process for determining its investment strat-
egy; 
‘‘(3) have an established code of ethics; and 
‘‘(4) submit an application to the Director of 
Angel Investment at such time and containing such 
information and assurances as the Director may re-
quire. 
‘‘(c) USE OF FUNDS.—An angel group that receives 
financing under this section shall use the amounts received 
to make investments in small business concerns— 
‘‘(1) that have been in existence for less than 
5 years as of the date on which the investment is 
made;
‘‘(2) that have fewer than 75 employees as of 
the date on which the investment is made; 
‘‘(3) more than 50 percent of the employees of 
which perform substantially all of their services in 
the United States as of the date on which the invest-
ment is made; and 
‘‘(4) within the geographic area determined by 
the Director under subsection (e). 
‘‘(d) LIMITATION ON AMOUNT.—No angel group re-
ceiving financing under this section shall receive more 
than $2,000,000. 
‘‘(e) LIMITATION ON GEOGRAPHIC AREA.—For each 
angel group receiving financing under this section, the Di-
rector shall determine the geographic area in which a 
small business concern must be located to receive an in-
vestment from that angel group. 
‘‘(f) PRIORITY IN PROVIDING FINANCING.—In pro-
viding financing under this section, the Director shall give 
priority to angel groups that invest in small business con-
cerns owned and controlled by veterans, small business 
concerns owned and controlled by women, and socially and 
economically disadvantaged small business concerns. 
‘‘(g) NATIONWIDE DISTRIBUTION OF FINANCING.— 
In providing financing under this section, the Director
shall, to the extent practicable, provide financing to angel 
groups that are located in a variety of geographic areas. 
‘‘(h) MATCHING REQUIREMENT.—As a condition of 
receiving financing under this section, the Director shall 
require that for each small business concern in which the 
angel group receiving such financing invests, the angel 
group shall invest an amount that is equal to or greater 
than the amount of financing received under this section 
from a source other than the Federal Government that 
is equal to the amount of the financing provided under 
this section that the angel group invests in that small busi-
ness concern. 
‘‘(i) REPAYMENT OF FINANCING.—As a condition of 
receiving financing under this section, the Director shall 
require an angel group to repay the Director for any in-
vestment on which the angel group makes a profit an 
amount equal to the percentage of the returns that is 
equal to the percentage of the total amount invested by 
the angel group that consisted of financing received under 
this section. 
‘‘(j) ANGEL INVESTMENT FUND.— 
‘‘(1) ESTABLISHMENT.—There is in the Treas-
ury a fund to be known as the Angel Investment 
Fund.
‘‘(2) 
DEPOSIT
OF
CERTAIN
AMOUNTS.— 
Amounts collected under subsection (i) shall be de-
posited in the fund. 
‘‘(3) USE OF DEPOSITS.—Deposits in the fund 
shall be available for the purpose of providing fi-
nancing under this section in the amounts specified 
in annual appropriation laws without regard to fiscal 
year limitations. 
‘‘(k) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to carry out this section— 
‘‘(1) $10,000,000 for fiscal year 2008; 
‘‘(2) $20,000,000 for fiscal year 2009; and 
‘‘(3) $20,000,000 for fiscal year 2010. 
‘‘SEC. 383. FEDERAL ANGEL NETWORK. 
‘‘(a) IN GENERAL.—Subject to the succeeding provi-
sions of this subsection, the Director of the Office of Angel 
Investment shall establish and maintain a searchable data-
base, to be known as the Federal Angel Network, to assist 
small business concerns in identifying angel investors. 
‘‘(b) NETWORK CONTENTS.—The Federal Angel Net-
work shall include— 
‘‘(1) a list of the names and addresses of angel 
groups and angel investors; 
‘‘(2) information about the types of investments 
each angel group or angel investor has made; and
‘‘(3) information about other public and private 
resources and registries that provide information 
about angel groups or angel investors. 
‘‘(c) COLLECTION OF INFORMATION.— 
‘‘(1) IN GENERAL.—The Director shall collect 
the information to be contained in the Federal Angel 
Network and shall ensure that such information is 
updated regularly. 
‘‘(2) REQUEST FOR EXCLUSION OF INFORMA-
TION.—The Director shall not include such informa-
tion concerning an angel investor if that investor 
contacts the Director to request that such informa-
tion be excluded from the Network. 
‘‘(d) AVAILABILITY.—The Director shall make the 
Federal Angel Network available on the Internet website 
of the Administration and shall do so in a manner that 
permits others to download, distribute, and use the infor-
mation contained in the Federal Angel Network. 
‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to carry out this section 
$1,000,000, to remain available until expended. 
‘‘SEC. 384. GRANT PROGRAM FOR DEVELOPMENT OF ANGEL 
GROUPS. 
‘‘(a) IN GENERAL.—The Director of the Office of 
Angel Investment shall establish and carry out a grant
program to make grants to eligible entities for the develop-
ment of new or existing angel groups and to increase 
awareness and education about angel investing. 
‘‘(b) ELIGIBLE ENTITIES.—In this section, the term 
‘eligible entity’ means— 
‘‘(1) a State or unit of local government; 
‘‘(2) a nonprofit organization; 
‘‘(3) a state mutual benefit corporation; 
‘‘(4) a Small Business Development Center es-
tablished pursuant to section 21 of the Small Busi-
ness Act (15 U.S.C. 648); or 
‘‘(5) a women’s business center established pur-
suant to section 29 of the Small Business Act (15 
U.S.C. 656). 
‘‘(c) MATCHING REQUIREMENT.—The Administrator 
shall require, as a condition of any grant made under this 
section, that the eligible entity receiving the grant provide 
from resources (in cash or in kind), other than those pro-
vided by the Administrator or any other Federal source, 
a matching contribution equal to 50 percent of the amount 
of the grant. 
‘‘(d) APPLICATION.—To receive a grant under this 
section, an eligible entity shall submit an application that 
contains—
‘‘(1) a proposal describing how the grant would 
be used; and 
‘‘(2) any other information or assurances as the 
Director may require. 
‘‘(e) REPORT.—Not later than 3 years after the date 
on which an eligible entity receives a grant under this sec-
tion, such eligible entity shall submit a report to the Ad-
ministrator describing the use of grant funds and evalu-
ating the success of the angel group developed using the 
grant funds. 
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—There 
is authorized to be appropriated to carry out this section 
$1,500,000, for each of fiscal years 2008 through 2010.’’. 
TITLE IV—SURETY BOND 
PROGRAM 
SEC. 401. STUDY AND REPORT. 
(a) STUDY.—The Administrator of the Small Busi-
ness Administration shall conduct a study of the current 
funding structure of the surety bond program carried out 
under part B (15 U.S.C. 694a et seq.) of title IV of the 
Small Business Investment Act of 1958. The study shall 
include— 
(1) an assessment of whether the program’s 
current funding framework and program fees are in-
hibiting the program’s growth;
(2) an assessment of whether surety companies 
and small business concerns could benefit from an 
alternative funding structure; and 
(3) an assessment of whether permissible pre-
mium rates for surety companies participating in the 
program should be placed on parity with the rates 
authorized by appropriate State insurance regulators 
and how such a change would affect the program 
under the current funding framework. 
(b) REPORT.—Not later than 180 days after the date 
of the enactment of this Act, the Administrator shall sub-
mit to Congress a report on the results of the study. 
SEC. 402. PREFERRED SURETY BOND PROGRAM. 
(a) PROGRAM REQUIRED.—Part B (15 U.S.C. 694a 
et seq.) of title IV of the Small Business Investment Act 
of 1958 is amended by adding at the end the following: 
‘‘SEC. 413. PREFERRED SURETY BOND PROGRAM. 
‘‘(a) PROGRAM REQUIRED.—The Administrator shall 
carry out a program, to be known as the Preferred Surety 
Bond Program, under which the Administration, by a 
written agreement between the surety and the Administra-
tion, delegates to the surety complete authority to issue, 
monitor, and service bonds subject to guaranty from the 
Administration without obtaining the specific approval of
the Administration. Bonds made under the program shall 
carry a 70 percent guaranty. 
‘‘(b) TERM.—The term of a delegation of authority 
under such an agreement shall not exceed 2 years. 
‘‘(c) RENEWAL.—Such an agreement may be renewed 
one or more times, each such renewal providing one addi-
tional term. Before each renewal, the Administrator shall 
review the surety’s bonds, policies, and procedures for 
compliance with relevant rules and regulations. 
‘‘(d) 
APPLICATION.—The 
Administrator 
shall 
promptly act upon an application from a surety to partici-
pate in the program, in accordance with criteria and pro-
cedures established in regulations pursuant to section 
411(d). 
‘‘(e) REDUCTION OR TERMINATION OF PARTICIPA-
TION.—The Administrator is authorized to reduce the al-
lotment of bond guarantee authority or terminate the par-
ticipation of a surety in the program based on the rate 
of participation of such surety during the 4 most recent 
fiscal year quarters compared to the median rate of par-
ticipation by the other sureties in the program.’’. 
(b) CONFORMING AMENDMENTS.—Section 411 of the 
Small Business Investment Act of 1958 (15 U.S.C. 694b) 
is amended—
(1) in subsection (a), by striking paragraphs 
(3), (4), and (5); 
(2) in subsection (b)(2), by striking ‘‘the au-
thority of subsection (a)(3)’’ and inserting ‘‘the au-
thority of section 413’’; 
(3) in subsection (c)— 
(A) by striking paragraph (1); and 
(B) 
by 
redesignating 
paragraphs 
(2) 
through (4) as (1) through (3), respectively; 
and 
(4) in subsection (g)(3), by striking ‘‘the au-
thority of paragraph (3) of subsection (a)’’ and in-
serting ‘‘the authority of section 413’’. 
SEC. 403. DENIAL OF LIABILITY. 
Section 411 of the Small Business Investment Act 
of 1958 (15 U.S.C. 694b) is amended by adding at the 
end the following: 
‘‘(k) For bonds made or executed with the prior ap-
proval of the Administration, the Administration shall not 
deny liability to a surety based upon information that was 
provided as part of the guaranty application.’’. 
SEC. 404. INCREASING THE BOND THRESHOLD. 
Section 411(a) of the Small Business Investment Act 
of 1958 (15 U.S.C. 694b(a)) is amended by striking 
‘‘$2,000,000’’ and inserting ‘‘$3,000,000’’.
SEC. 405. FEES. 
Section 411 of the Small Business Investment Act 
of 1958 (15 U.S.C. 694b) is amended by adding at the 
end the following: 
‘‘(l) To the extent that amounts are made available 
to the Administrator for the purpose of fee contributions, 
the Administrator shall use such funds to offset fees estab-
lished and assessed under this section. Each fee contribu-
tion shall be effective for one fiscal quarter and shall be 
adjusted as necessary to ensure that amounts made avail-
able are fully used.’’. 
TITLE V—VENTURE CAPITAL 
INVESTMENT STANDARDS 
SEC. 501. DETERMINING WHETHER BUSINESS CONCERN IS 
INDEPENDENTLY OWNED AND OPERATED. 
Section 3(a) of the Small Business Act (15 U.S.C. 
632(a)) is amended by adding at the end the following: 
‘‘(5) NON-AFFILIATION OF VENTURE CAPITAL 
FROM
CONSIDERATION
OF
SMALL
BUSINESS
CON-
CERN.—For purposes of determining whether a 
small business concern is independently owned and 
operated under paragraph (1) or meets the small 
business size standards instituted under paragraph 
(2), the Administrator shall not consider a business 
concern to be affiliated with a venture capital oper-
ating company (or with any other business that the
venture capital operating company has financed) 
if— 
‘‘(A) the venture capital operating com-
pany does not own 50 percent or more of the 
business concern; and 
‘‘(B) employees of the venture capital oper-
ating company do not constitute a majority of 
the board of directors of the business concern. 
‘‘(6) DEFINITION OF ‘INDEPENDENTLY OWNED 
AND OPERATED’.—For purposes of this section, a 
business concern shall be deemed to be ‘independ-
ently owned and operated’ if— 
‘‘(A) it is owned in majority part by one or 
more natural persons or venture capital oper-
ating companies; 
‘‘(B) there is no single venture capital op-
erating company that owns 50 percent or more 
of the business concern; and 
‘‘(C) there is no single venture capital op-
erating company the employees of which con-
stitute a majority of the board of directors of 
the business concern. 
‘‘(7) DEFINITION OF ‘VENTURE CAPITAL OPER-
ATING COMPANY’.—For purposes of this section, the
term ‘venture capital operating company’ means a 
business concern— 
‘‘(A) that— 
‘‘(i) is a Venture Capital Operating 
Company, as that term is defined in regu-
lations promulgated by the Secretary of 
Labor; or 
‘‘(ii) is an entity that— 
‘‘(I) is registered under the In-
vestment Company Act of 1940 (15 
U.S.C. 80a–51 et seq.); 
‘‘(II) is an investment company, 
as defined in section 3(c)(14) of such 
Act (15 U.S.C. 80a–3(c)(14)), which 
is not registered under such Act be-
cause it is beneficially owned by less 
than 100 persons; or 
‘‘(III) is a nonprofit organization 
affiliated with, or serving as a patent 
and licensing organization for, a uni-
versity or other institution of higher 
education and that invests primarily 
in small business concerns; and