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Problem:SECTION 1. SHORT TITLE.

This Act may be cited as the ''Early-Stage Business Investment and
Incubation Act of 2010''.

SEC. 2. EARLY-STAGE BUSINESS INVESTMENT AND INCUBATION GRANT PROGRAM.

(a) Establishment.--Not later than 60 days after the date of
enactment of this Act, the Secretary of Commerce 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 covered 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 capital that--
(i) is not from a Federal source; and
(ii) is available for investment and
incubation 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.
(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 incubator 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 program 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 conduct 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 program may be used by the
incubator to meet operational expenses.
(3) Designation of grant uses.--In the application 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 receiving a grant
under the program, a covered business incubator shall designate
an individual as the fund 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 incubator
on the use of grant funds;
(B) provide letters of support and reference to the
Secretary with respect to proposals for the use of
grant funds by the incubator; and
(C) submit periodic reports to the Secretary on the
results of activities carried out with grant funds.
(3) Collaborator.--As a condition of receiving 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
affiliate of the incubator and who shall assist the incubator
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 provide 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 businesses 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.--
(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 Representatives.
(i) Definitions.--In this Act, the following definitions apply:
(1) Covered business incubator.--The term ''covered
business incubator'' means a public or private not-for-profit
organization, including an academic institution, that--
(A) operates a program providing assistance to
early-stage business in targeted industries to support
the development of those businesses;
(B) has a physical location and on-site management
for the program described under subparagraph (A); and
(C) has procedures for selecting businesses for and
graduating businesses from the program described under
subparagraph (A).
(2) Due diligence activities.--The term ''due diligence
activities'' means activities undertaken 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 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 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.
(vi) Information technology.
(vii) Digital media.
(viii) Clean technology.
(ix) Defense technology.
(x) Photonics technology.
(xi) Electronic technology.
(xii) Semiconductor technology.
(xiii) Material science technology.
(xiv) Aerospace.
(xv) Communications.
(xvi) Transportation.
(4) Operational expenses.--The term ''operational
expenses'' means the costs of operating an incubator, including
overhead and management expenses.
(5) Purchased services.--The term ''purchased services''
means any training, counseling, or other assistance provided to
an early-stage business in a targeted industry that is provided
by a covered business incubator through an agreement with
another entity, and not by the incubator directly.
(6) Secretary.--The terms ''Secretary'' and ''Secretary of
Commerce'' mean the Secretary of Commerce acting through the
Assistant Secretary of Commerce for Economic Development.
(7) Small business concern.--The term ''small business
concern'' has the meaning given that term in section 3 of the
Small Business Act (15 U.S.C. 632).
Solution:
Early-Stage Business Investment and Incubation Act of 2010 - Directs the Secretary of Commerce to establish an early-stage business investment and incubation grant program (program) to support the development of early-stage businesses engaged primarily in the research, development, manufacturing, production, or marketing of specified technologies, aerospace, communications, or transportation. Limits individual grants to $5 million. Requires each grant recipient under the program to: (1) designate an individual as the grant fund manager; (2) establish a grant investment committee; and (3) assign to each assisted business a grant collaborator. Directs the Secretary to monitor and evaluate program effectiveness.