[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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