I 
111TH CONGRESS 
2D SESSION 
H. R. 5411 
To direct the Secretary of Commerce to establish an early-stage business 
investment and incubation grant program, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 26, 2010 
Ms. KOSMAS introduced the following bill; which was referred to the Com-
mittee on Transportation and Infrastructure, and in addition to the Com-
mittee on Financial Services, for a period to be subsequently determined 
by the Speaker, in each case for consideration of such provisions as fall 
within the jurisdiction of the committee concerned 
A BILL 
To direct the Secretary of Commerce to establish an early- 
stage business investment and incubation grant program, 
and for other purposes. 
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 ‘‘Early-Stage Business 
Investment and Incubation Act of 2010’’. 
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SEC. 2. EARLY-STAGE BUSINESS INVESTMENT AND INCUBA-
TION GRANT PROGRAM. 
(a) ESTABLISHMENT.—Not later than 60 days after 
the date of enactment of this Act, the Secretary of Com-
merce shall establish an early-stage business investment 
and incubation grant program (in this section referred to 
as the ‘‘program’’) to support the development of early- 
stage businesses in targeted industries. 
(b) GRANT AUTHORITY.— 
(1) IN GENERAL.—In carrying out the program, 
the Secretary is authorized to make grants to cov-
ered business incubators. 
(2) GRANT AMOUNTS.— 
(A) NON-FEDERAL CAPITAL LIMITATION.— 
A grant made to a covered business incubator 
under the program may not be in an amount 
that exceeds the amount of the incubator’s cap-
ital that— 
(i) is not from a Federal source; and 
(ii) is available for investment and in-
cubation services on or before the date on 
which a grant is drawn upon. 
(B) AGGREGATE
AMOUNT
LIMITATION.— 
The aggregate amount of all grants made to a 
covered business incubator under the program 
may not exceed $5,000,000. 
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(c) GRANT AWARD PROCESS.—In making a grant 
under the program, the Secretary shall commit a grant 
amount to a covered business incubator and the amount 
of each such commitment shall remain available to be 
drawn upon by such incubator during the 5-year period 
beginning on the date on which each such commitment 
is first drawn upon. 
(d) USE OF GRANT.— 
(1) IN
GENERAL.—A grant made under the 
program may be used by a covered business incu-
bator for the following: 
(A) Making an investment in an early- 
stage business in a targeted industry. 
(B) Providing training, counseling, and 
other assistance to an early-stage business in a 
targeted industry to support the development of 
the business. 
(C) Providing purchased services to an 
early-stage business in a targeted industry. 
(D) Conducting due diligence activities. 
(E) Meeting operational expenses. 
(2) LIMITATIONS.— 
(A) PURCHASED
SERVICES.—Not more 
than 20 percent of the amount of a grant made 
to a covered business incubator under the pro-
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gram may be used by the incubator to provide 
purchased services to an early-stage business in 
a targeted industry. 
(B) DUE
DILIGENCE
ACTIVITIES.—Not 
more than 6 percent of the amount of a grant 
made to a covered business incubator under the 
program may be used by the incubator to con-
duct due diligence activities. 
(C) OPERATIONAL EXPENSES.—Not more 
than 5 percent of the amount of a grant made 
to a covered business incubator under the pro-
gram may be used by the incubator to meet 
operational expenses. 
(3) DESIGNATION OF GRANT USES.—In the ap-
plication of a covered business incubator for a grant 
under the program, the incubator shall notify the 
Secretary of the percentage of the grant amount 
that will be used for each of the activities described 
in subparagraphs (A) through (E) of paragraph (1) 
and provide a detailed description of the activities to 
be undertaken. 
(e) GRANT CONDITIONS.— 
(1) FUND MANAGER.—As a condition of receiv-
ing a grant under the program, a covered business 
incubator shall designate an individual as the fund 
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manager for the grant amount, who shall administer 
and be responsible to the Secretary for information 
with respect to the grant amounts received. 
(2) INVESTMENT COMMITTEE.—As a condition 
of receiving a grant under the program, a covered 
business incubator shall establish an investment 
committee composed of not less than 5 individuals 
(3 of whom may not be employed by or related to 
the incubator or an affiliate of the incubator) that 
shall— 
(A) review proposals for and advise the in-
cubator on the use of grant funds; 
(B) provide letters of support and ref-
erence to the Secretary with respect to pro-
posals for the use of grant funds by the incu-
bator; and 
(C) submit periodic reports to the Sec-
retary on the results of activities carried out 
with grant funds. 
(3) COLLABORATOR.—As a condition of receiv-
ing a grant under the program, a covered business 
incubator shall assign to each early-stage business in 
a targeted industry that is assisted with grant 
amounts a collaborator who shall be an individual 
not employed by or related to the incubator or an af-
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filiate of the incubator and who shall assist the incu-
bator in providing support to the business. 
(f) FEDERAL SHARE OF ACTIVITIES.—The Federal 
share of the cost of an activity carried out by a covered 
business incubator with the assistance of a grant under 
the program shall not exceed 75 percent of such cost. 
(g) MONITORING AND EVALUATION.— 
(1) IN GENERAL.—The Secretary shall assess 
the effectiveness of covered business incubators that 
receive a grant under the program. 
(2) DATA FROM INCUBATORS.—Not later than 
120 days after the date of receiving a grant under 
the program, a covered business incubator shall pro-
vide to the Secretary information on the activities of 
the incubator and on the businesses assisted under 
the grant, including— 
(A) the number of jobs created by the 
businesses; 
(B) the amount of taxes paid by the busi-
nesses and the employees of the businesses; and 
(C) other data that, as determined by the 
Secretary, may be used to measure the value of 
assistance under the program. 
(h) AUTHORIZATION OF APPROPRIATIONS.— 
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(1) IN GENERAL.—There is authorized to be 
appropriated to carry out the program— 
(A) $250,000,000 for the first full fiscal 
year beginning after the date of enactment of 
this Act; and 
(B) such sums as may be necessary for 
subsequent fiscal years. 
(2) PROHIBITION ON EARMARKS.—None of the 
funds appropriated for the program may be used for 
a congressional earmark as defined in clause 9(e) of 
rule XXI of the Rules of the House of Representa-
tives. 
(i) DEFINITIONS.—In this Act, the following defini-
tions apply: 
(1) 
COVERED
BUSINESS
INCUBATOR.—The 
term ‘‘covered business incubator’’ means a public or 
private not-for-profit organization, including an aca-
demic institution, that— 
(A) operates a program providing assist-
ance to early-stage business in targeted indus-
tries to support the development of those busi-
nesses; 
(B) has a physical location and on-site 
management for the program described under 
subparagraph (A); and 
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(C) has procedures for selecting businesses 
for and graduating businesses from the pro-
gram described under subparagraph (A). 
(2) DUE
DILIGENCE
ACTIVITIES.—The term 
‘‘due diligence activities’’ means activities under-
taken to analyze and assess the desirability, value, 
and potential of an opportunity to provide assistance 
to an early-stage business in a targeted industry. 
(3) EARLY-STAGE
BUSINESS
IN
A
TARGETED 
INDUSTRY.—The term ‘‘early-stage business in a 
targeted industry’’ means a small business concern 
that— 
(A) is domiciled in a State; 
(B) has not generated gross annual reve-
nues exceeding $15,000,000 in any of the pre-
vious 3 years; and 
(C) is engaged primarily in researching, 
developing, manufacturing, producing, or bring-
ing to market goods or services with respect to 
any of the following business sectors: 
(i) Agricultural technology. 
(ii) Energy technology. 
(iii) Environmental technology. 
(iv) Life science technology. 
(v) Biotechnology. 
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