Teacher:In this task, you are given text for US Congressional and California state bills, your task is to generate a summary for this bill.
Teacher: Now, understand the problem? Solve this instance: SECTION 1. SHORT TITLE.

This Act may be cited as the ''Small Business Early-Stage
Investment Act of 2009''.

SEC. 2. SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM.

Title III of the Small Business Investment Act of 1958 (15 U.S.C.
681 et seq.) is amended by adding at the end the following:

''PART D--SMALL BUSINESS EARLY-STAGE INVESTMENT PROGRAM

''SEC. 399A. ESTABLISHMENT OF PROGRAM.

''The Administrator shall establish and carry out an early-stage
investment program (hereinafter referred to in this part as the
'program') to provide equity investment financing to support early-
stage small businesses in targeted industries in accordance with this
part.

''SEC. 399B. ADMINISTRATION OF PROGRAM.

''The program shall be administered by the Administrator acting
through the Associate Administrator described under section 201.

''SEC. 399C. APPLICATIONS.

''(a) In General.--Any incorporated body, limited liability
company, or limited partnership organized and chartered or otherwise
existing under Federal or State law for the purpose of performing the
functions and conducting the activities contemplated under the program
and any small business investment company may submit to the
Administrator an application to participate in the program.
''(b) Requirements for Application.--An application to participate
in the program shall include the following:
''(1) A business plan describing how the applicant intends
to make successful venture capital investments in early-stage
small businesses in targeted industries.
''(2) Information regarding the relevant venture capital
investment qualifications and backgrounds of the individuals
responsible for the management of the applicant.
''(3) A description of the extent to which the applicant
meets the selection criteria under section 399D.
''(c) Applications From Small Business Investment Companies.--The
Administrator shall establish an abbreviated application process for
small business investment companies that have received a license under
section 301 and that are applying to participate in the program. Such
abbreviated process shall incorporate a presumption that such small
business investment companies satisfactorily meet the selection
criteria under paragraphs (3) and (5) of section 399D(b).

''SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT COMPANIES.

''(a) In General.--Not later than 90 days after the date on which
the Administrator receives an application from an applicant under
section 399C, the Administrator shall make a final determination to
approve or disapprove such applicant to participate in the program and
shall transmit such determination to the applicant in writing.
''(b) Selection Criteria.--In making a determination under
subsection (a), the Administrator shall consider each of the following:
''(1) The likelihood that the applicant will meet the goals
specified in the business plan of the applicant.
''(2) The likelihood that the investments of the applicant
will create or preserve jobs, both directly and indirectly.
''(3) The character and fitness of the management of the
applicant.
''(4) The experience and background of the management of
the applicant.
''(5) The extent to which the applicant will concentrate
investment activities on early-stage small businesses in
targeted industries.
''(6) The likelihood that the applicant will achieve
profitability.
''(7) The experience of the management of the applicant
with respect to establishing a profitable investment track
record.

''SEC. 399E. GRANTS.

''(a) In General.--The Administrator may make one or more grants to
a participating investment company.
''(b) Grant Amounts.--
''(1) Non-federal capital.--A grant made to a participating
investment company under the program may not be in an amount
that exceeds the amount of the capital of such company that is
not from a Federal source and that is available for investment
on or before the date on which a grant is drawn upon. Such
capital may include legally binding commitments with respect to
capital for investment.
''(2) Limitation on aggregate amount.--The aggregate amount
of all grants made to a participating investment company under
the program may not exceed $100,000,000.
''(c) Grant Process.--In making a grant under the program, the
Administrator shall commit a grant amount to a participating investment
company and the amount of each such commitment shall remain available
to be drawn upon by such company--
''(1) for new-named investments during the 5-year period
beginning on the date on which each such commitment is first
drawn upon; and
''(2) for follow-on investments and management fees during
the 10-year period beginning on the date on which each such
commitment is first drawn upon, with not more than 2 additional
1-year periods available at the discretion of the
Administrator.

''SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSINESSES IN TARGETED
INDUSTRIES.

''(a) In General.--As a condition of receiving a grant under the
program, a participating investment company shall make all of the
investments of such company in small business concerns, of which at
least 50 percent shall be early-stage small businesses in targeted
industries.
''(b) Evaluation of Compliance.--With respect to a grant amount
committed to a participating investment company under section 399E, the
Administrator shall evaluate the compliance of such company with the
requirements under this section if such company has drawn upon 50
percent of such commitment.

''SEC. 399G. PRO RATA INVESTMENT SHARES.

''Each investment made by a participating investment company under
the program shall be treated as comprised of capital from grants under
the program according to the ratio that capital from grants under the
program bears to all capital available to such company for investment.

''SEC. 399H. GRANT INTEREST.

''(a) Grant Interest.--
''(1) In general.--As a condition of receiving a grant
under the program, a participating investment company shall
convey a grant interest to the Administrator in accordance with
paragraph (2).
''(2) Effect of conveyance.--The grant interest conveyed
under paragraph (1) shall have all the rights and attributes of
other investors attributable to their interests in the
participating investment company, but shall not denote control
or voting rights to the Administrator. The grant interest shall
entitle the Administrator to a pro rata portion of any
distributions made by the participating investment company
equal to the percentage of capital in the participating
investment company that the grant comprises. The Administrator
shall receive distributions from the participating investment
company at the same times and in the same amounts as any other
investor in the company with a similar interest. The investment
company shall make allocations of income, gain, loss,
deduction, and credit to the Administrator with respect to the
grant interest as if the Administrator were an investor.
''(b) Manager Profits.--As a condition of receiving a grant under
the program, the manager profits interest payable to the managers of a
participating investment company under the program shall not exceed 20
percent of profits, exclusive of any profits that may accrue as a
result of the capital contributions of any such managers with respect
to such company. Any excess of this amount, less taxes payable thereon,
shall be returned by the managers and paid to the investors and the
Administrator in proportion to the capital contributions and grants
paid in. No manager profits interest (other than a tax distribution)
shall be paid prior to the repayment to the investors and the
Administrator of all contributed capital and grants made.
''(c) Distribution Requirements.--As a condition of receiving a
grant under the program, a participating investment company shall make
all distributions to all investors in cash and shall make distributions
within a reasonable time after exiting investments, including following
a public offering or market sale of underlying investments.

''SEC. 399I. FUND.

''There is hereby created within the Treasury a separate fund for
grants which shall be available to the Administrator subject to annual
appropriations as a revolving fund to be used for the purposes of the
program. All amounts received by the Administrator, including any
moneys, property, or assets derived by the Administrator from
operations in connection with the program, shall be deposited in the
fund. All expenses and payments, excluding administrative expenses,
pursuant to the operations of the Administrator under the program shall
be paid from the fund.

''SEC. 399J. APPLICATION OF OTHER SECTIONS.

''To the extent not inconsistent with requirements under this part,
the Administrator may apply sections 309, 311, 312, 313, and 314 to
activities under this part and an officer, director, employee, agent,
or other participant in a participating investment company shall be
subject to the requirements under such sections.

''SEC. 399K. DEFINITIONS.

''In this part, the following definitions apply:
''(1) Early-stage small business in a targeted industry.--
The term 'early-stage small business in a targeted industry'
means a small business concern that--
''(A) is domiciled in a State;
''(B) has not generated gross annual sales revenues
exceeding $15,000,000 in any of the previous 3 years;
and
''(C) is engaged primarily in researching,
developing, manufacturing, producing, or bringing to
market goods, products, or services with respect to any
of the following business sectors:
''(i) Agricultural technology.
''(ii) Energy technology.
''(iii) Environmental technology.
''(iv) Life science.
''(v) Information technology.
''(vi) Digital media.
''(vii) Clean technology.
''(viii) Defense technology.
''(ix) Photonics technology.
''(2) Participating investment company.--The term
'participating investment company' means an applicant approved
under section 399D to participate in the program.
''(3) Small business concern.--The term 'small business
concern' has the same meaning given such term under section
3(a) of the Small Business Act (15 U.S.C. 632(a)).

''SEC. 399L. AUTHORIZATION OF APPROPRIATIONS.

''There is authorized to be appropriated to carry out the program
$200,000,000 for the first full fiscal year beginning after the date of
the enactment of this part.''.

SEC. 3. PROHIBITIONS ON EARMARKS.

None of the funds appropriated for the program established under
part D of title III of the Small Business Investment Act of 1958, as
added by this Act, may be used for a Congressional earmark as defined
in clause 9(d) of rule XXI of the Rules of the House of
Representatives.

SEC. 4. REGULATIONS.

Except as otherwise provided in this Act or in amendments made by
this Act, after an opportunity for notice and comment, but not later
than 180 days after the date of the enactment of this Act, the
Administrator shall issue

regulations to carry out this Act and the amendments made by this Act.

Passed the House of Representatives November 18, 2009.

Attest:

LORRAINE C. MILLER,

Clerk.
Student:
Small Business Early-Stage Investment Act of 2009 - Amends the Small Business Investment Act of 1958 to direct the Administrator of the Small Business Administration (SBA) to establish and carry out a program to provide equity investment financing to support early-stage small businesses in the following targeted industries: (1) agricultural technology; (2) energy technology; (3) environmental technology; (4) life science; (5) information technology; (6) digital media; (7) clean technology; (8) defense technology; and (9) photonics technology. Directs the Administrator to make grants to participating investment companies under the program and limits to $100 million the aggregate amount of all grants made to a participating investment company under the program. Requires, as a condition of receiving a grant under the program, all of the investments of participating investment companies to be in small businesses, and at least 50% to be in early-stage small businesses in the targeted industries. Directs the Administrator to monitory participant compliance with such requirements. Establishes a separate Treasury fund for such grants.

Authorizes appropriations.

Prohibits funds appropriated for such purpose from being used for a congressional earmark.