Title: Incubator Network and Startup Success Act
Policy area: Commerce

Summary:
Incubator Network and Startup Success Act
This bill requires the Department of Commerce to establish an incubator network and startup success program to award grants to networks of organizations that provide resources and services to accelerate the growth and success of startups. The bill places certain requirements on grant applicants to certify that their resources and services benefit entrepreneurs who are socially or economically disadvantaged individuals, women, veterans, or disabled individuals.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3329 Introduced in Senate (IS)]

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116th CONGRESS
  2d Session
                                S. 3329

To establish an incubator network and startup success program, and for 
                            other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 25, 2020

Ms. Hassan (for herself and Mr. Hawley) introduced the following bill; 
    which was read twice and referred to the Committee on Commerce, 
                      Science, and Transportation

_______________________________________________________________________

                                 A BILL


 
To establish an incubator network and startup success program, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Incubator Network and Startup 
Success Act''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Startup incubator.--The term ``startup incubator'' 
        means a business or a nonprofit organization that--
                    (A) provides resources and services designed to 
                accelerate the growth and success of businesses, which 
                may include--
                            (i) physical workspace and facilities, 
                        including affordable or shared office space;
                            (ii) access to capital, business education, 
                        and counseling;
                            (iii) networking and mentorship 
                        opportunities;
                            (iv) access to advanced tools and other 
                        technology; and
                            (v) other services intended to aid in 
                        developing a business; and
                    (B) serves businesses, of which not less than 90 
                percent are startups.
            (2) Startup incubator network.--The term ``startup 
        incubator network'' means a group of startup incubators with an 
        agreement to--
                    (A) share resources among network members, which 
                may include--
                            (i) reciprocal facility privileges to an 
                        incubator member of a network member; and
                            (ii) common access to capital raising, 
                        business education, and networking programs;
                    (B) share information and best practices among 
                network members;
                    (C) designate not less than 1 employee of a network 
                member to be the official point of contact for the 
                network members; and
                    (D) establish a public website for the startup 
                incubator network.
            (3) Category 1 startup incubator network.--The term 
        ``category 1 startup incubator network'' means a startup 
        incubator network with a good faith estimate that not less than 
        50 percent of the incubator members of the startup incubator 
        network have disadvantaged entrepreneur ownership.
            (4) Category 2 startup incubator network.--The term 
        ``category 2 startup incubator network'' means a startup 
        incubator network with a good faith estimate that not less than 
        25 percent and less than 50 percent of the incubator members of 
        the startup incubator network have disadvantaged entrepreneur 
        ownership.
            (5) Category 3 startup incubator network.--The term 
        ``category 3 startup incubator network'' means a startup 
        incubator network with a good faith estimate that less than 25 
        percent of the incubator members of the startup incubator 
        network have disadvantaged entrepreneur ownership.
            (6) Director.--The term ``Director'' means the Director of 
        the Office of Innovation and Entrepreneurship of the Department 
        of Commerce.
            (7) Disadvantaged entrepreneur.--The term ``disadvantaged 
        entrepreneur'' means an entrepreneur who is--
                    (A) a socially disadvantaged individual or an 
                economically disadvantaged individual, as those terms 
                are described in paragraphs (5) and (6)(A) of section 
                8(a) of the Small Business Act (15 U.S.C. 637(a)(5), 
                637(a)(6)(A));
                    (B) a woman;
                    (C) a veteran, as defined in section 101 of title 
                38, United States Code; or
                    (D) an individual with a disability, as defined in 
                section 3 of the Americans with Disabilities Act of 
                1990 (42 U.S.C. 12102).
            (8) Disadvantaged entrepreneur ownership.--The term 
        ``disadvantaged entrepreneur ownership'' means--
                    (A) in the case of--
                            (i) a business, not less than 51 percent 
                        ownership by one or more disadvantaged 
                        entrepreneurs; or
                            (ii) a publicly owned business, not less 
                        than 51 percent ownership of the stock by one 
                        or more disadvantaged entrepreneurs; and
                    (B) control of the management and daily operations 
                of the business by one or more disadvantaged 
                entrepreneurs.
            (9) Eligible entity.--The term ``eligible entity''--
                    (A) means--
                            (i) a category 1 startup incubator network;
                            (ii) a category 2 or category 3 startup 
                        incubator network that has submitted a formal 
                        plan under section 3(f)(2) or 3(f)(3), 
                        respectively; or
                            (iii) a planned startup incubator network 
                        that has submitted a formal plan to establish a 
                        startup incubator network under section 
                        3(f)(1);
                    (B) includes a startup incubator network that has 
                received funding under--
                            (i) the Small Business Act (15 U.S.C. 631 
                        et seq.);
                            (ii) the Public Works and Economic 
                        Development Act of 1965 (42 U.S.C. 3121 et 
                        seq.); and
                            (iii) other Federal programs; and
                    (C) does not include a startup incubator network 
                that has received a grant under section 3(a) during the 
                3-year period ending on the date on which an 
                application is submitted under section 3(g).
            (10) Incubator member.--The term ``incubator member'' means 
        a business that is served by a startup incubator.
            (11) Network member.--The term ``network member'' means a 
        startup incubator that is a part of a startup incubator network 
        or planned startup incubator network.
            (12) Planned startup incubator network.--The term ``planned 
        startup incubator network'' means a startup incubator network 
        that multiple startup incubators intend to create.
            (13) Rural area.--The term ``rural area'' has the meaning 
        given the term in section 343(a) of the Consolidated Farm and 
        Rural Development Act (7 U.S.C. 1991(a)).
            (14) Startup.--The term ``startup'' means a business that--
                    (A) has less than $10,000,000 in annual gross 
                receipts;
                    (B) has not more than 5 years of gross receipts; 
                and
                    (C) has been an active trade or business for less 
                than 10 years.
            (15) State.--The term ``State'' means each of the several 
        States, the District of Columbia, and any other territory or 
        possession of the United States.

SEC. 3. INCUBATOR NETWORK AND STARTUP SUCCESS PROGRAM.

    (a) In General.--Not later than 1 year after the date of enactment 
of this Act, the Director shall establish in the Office of Innovation 
and Entrepreneurship of the Department of Commerce an incubator network 
and startup success program with the purpose of carrying out the grants 
described in subsection (b).
    (b) Grants Authorized.--The Director is authorized to award grants 
under this section on a competitive basis in the amount of $50,000 to 
each network member of an eligible entity selected based on the 
application submitted under subsection (g) and the criteria described 
in subsection (h).
    (c) Maximum Amount.--The total amount of grants made by the 
Director under subsection (b) in a fiscal year shall not exceed 
$2,000,000.
    (d) Matching Requirement.--The Director may not make a grant to the 
network members of an eligible entity under this section unless each 
network member demonstrates the ability to raise or plans to raise non-
Federal contributions in an amount equal to the amount of Federal funds 
provided to each network member under the grant.
    (e) Announcement.--The Director shall widely announce the incubator 
network and startup success program established under subsection (a), 
including on the website of the Office of Innovation and 
Entrepreneurship of the Department of Commerce.
    (f) Formal Plans for Preliminary Eligibility.--To be eligible to 
receive a grant under this section--
            (1) a planned startup incubator network shall submit to the 
        Director a formal plan to form a startup incubator network 
        within 1 year of the receipt of a grant under subsection (b) at 
        such time, in such manner, and containing such information as 
        the Director may require;
            (2) a category 2 startup incubator network shall submit to 
        the Director at such time, in such manner, and containing such 
        information as the Director may require--
                    (A) a formal plan detailing planned efforts to 
                increase access to the startup incubator network for 
                businesses with disadvantaged entrepreneur ownership; 
                and
                    (B) evidence relating to the likelihood of the 
                successful implementation of the plan described in 
                subparagraph (A), including evidence of past success in 
                increasing access to the startup incubator network for 
                businesses with disadvantaged entrepreneur ownership; 
                and
            (3) a category 3 startup incubator network shall submit to 
        the Director at such time, in such manner, and containing such 
        information as the Director may require--
                    (A) a formal plan to increase the percentage of 
                disadvantaged entrepreneur-owned incubator members by 5 
                percent within 5 years of the receipt of a grant under 
                subsection (b); and
                    (B) evidence relating to the likelihood of the 
                successful implementation of the plan described in 
                subparagraph (A), including evidence of past success in 
                increasing access to the startup incubator network for 
                businesses with disadvantaged entrepreneur ownership.
    (g) Application.--
            (1) In general.--Each eligible entity that desires the 
        network members of the eligible entity to receive a grant under 
        subsection (b) shall submit an application on behalf of the 
        network members of the eligible entity to the Director, at such 
        time, in such manner, and accompanied by such additional 
        information as the Director may require.
            (2) Contents.--Each application submitted pursuant to 
        paragraph (1) shall include--
                    (A) a report that--
                            (i) specifies whether the eligible entity 
                        is a category 1, category 2, or category 3 
                        startup incubator network; and
                            (ii) provides a good faith estimate of the 
                        percentage of incubator members of the eligible 
                        entity with disadvantaged entrepreneur 
                        ownership;
                    (B) the contact information of the official point 
                of contact for the eligible entity to coordinate with 
                the Director on behalf of network members; and
                    (C) a plan that demonstrates that the receipt of a 
                grant under subsection (b) would increase certain 
                measures of success for the eligible entity, which may 
                include an increase in--
                            (i) access to startup incubator network 
                        activities in the geographical region of the 
                        startup incubator network;
                            (ii) access to startup incubator network 
                        activities in rural areas;
                            (iii) the variety of startup incubator 
                        network activities available to incubator 
                        members;
                            (iv) the number of businesses applying to 
                        become incubator members of network members;
                            (v) the number of incubator members 
                        retained by network members; and
                            (vi) the number of incubator members that 
                        complete the incubation program of the network 
                        member, including the number of incubator 
                        members that exceed the criteria of a startup 
                        established under section 2.
    (h) Criteria.--In making grants under this section, the Director 
shall evaluate eligible entities based upon--
            (1) the likelihood that the eligible entity will 
        successfully implement the plan described in subsection 
        (g)(2)(C);
            (2) in the case of a planned startup incubator network, a 
        category 2 incubator network, or a category 3 incubator 
        network, the likelihood that the eligible entity will 
        successfully implement a plan described in subsection (f);
            (3) in the case of a category 2 incubator network or a 
        category 3 incubator network, the evidence of past success 
        submitted under subsection (f)(2)(B) or (f)(3)(B), 
        respectively;
            (4) the likely economic impact of successfully implementing 
        the plan described in subsection (g)(2)(C) or a plan described 
        in subsection (f), including the potential for creating jobs;
            (5) the likelihood that the eligible entity will remain a 
        startup incubator network following the receipt of an award; 
        and
            (6) other competitive criteria that the Director may 
        develop.
    (i) Use of Funds.--
            (1) In general.--A network member receiving an award under 
        subsection (b) shall use not less than 25 percent of the award 
        and not less than 25 percent of the matching funds raised 
        pursuant to subsection (d) to--
                    (A) create a new startup incubator network; or
                    (B) support and expand existing startup incubator 
                network activities.
            (2) Category 3 startup incubator networks.--In addition to 
        the requirements for the use of funds under paragraph (1), a 
        network member of a category 3 startup incubator network 
        receiving an award under subsection (b) shall--
                    (A) use not less than 5 percent of the award and 
                not less than 5 percent of the matching funds raised 
                pursuant to subsection (d) to implement the appropriate 
                formal plan the category 3 startup incubator network 
                submitted pursuant to subsection (f)(3); and
                    (B) satisfy any additional requirements for the use 
                of funds determined by the Director, which may include 
                requirements that reflect demographic data for the area 
                served by the category 3 startup incubator network.

SEC. 4. PERSONNEL TO SUPPORT STARTUP INCUBATOR NETWORKS.

    (a) Hiring Authority of the Director.--The Assistant Secretary of 
Commerce is authorized to hire 2 additional employees in the Office of 
Innovation and Entrepreneurship of the Department of Commerce, who 
shall be charged with duties, which may include--
            (1) administering the incubator network and startup success 
        program established under section 3(a);
            (2) facilitating existing and new startup incubator network 
        activities;
            (3) facilitating the planning and formation of new startup 
        incubator networks;
            (4) facilitating--
                    (A) the development and implementation of plans of 
                startup incubator networks to increase services to 
                businesses with disadvantaged entrepreneur ownership; 
                and
                    (B) the design of inclusive programming; and
            (5) coordinating with the State designees described in 
        subsection (c).
    (b) State Assignments.--The Director shall assign to not less than 
one of the additional employees hired under subsection (a) a list of 
States in which the employee shall take primary responsibility for 
startup incubator network activities, so that each of the States has 1 
employee assigned to the State.
    (c) State Designees.--The governor of a State may designate an 
employee of an agency of the State that is responsible for economic 
development as the State designee to coordinate with the employee of 
the Office of Innovation and Entrepreneurship of the Department of 
Commerce assigned to the State under subsection (b).

SEC. 5. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated to carry out this Act 
$2,300,000 for fiscal year 2020 and each fiscal year thereafter.
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