[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1226 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 1226
To establish a Next Generation Entrepreneurship Corps program within
the Small Business Administration, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 23, 2021
Mr. Crow (for himself, Mr. Balderson, Miss Rice of New York, Mr. San
Nicolas, Mr. Phillips, Mr. Trone, Ms. Norton, Mr. Case, and Ms. Titus)
introduced the following bill; which was referred to the Committee on
Small Business, and in addition to the Committee on Education and
Labor, 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 establish a Next Generation Entrepreneurship Corps program within
the Small Business Administration, 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 ``Next Generation Entrepreneurship
Corps Act''.
SEC. 2. SENSE OF CONGRESS.
It is the sense of Congress that--
(1) the United States has a successful fellowship for
building the next generation of public servants; and
(2) with the devastation facing small businesses in the
United States as a result of the novel 2019 Coronavirus (COVID-
19), rebuilding Main Street will require a new generation of
entrepreneurial talent with the backing of the Federal
Government.
SEC. 3. NEXT GENERATION ENTREPRENEURSHIP CORPS PROGRAM.
The Small Business Act (15 U.S.C. 631 et seq.) is amended--
(1) by redesignating section 49 (15 U.S.C. 631 note) as
section 50; and
(2) by inserting after section 48 (15 U.S.C. 657u) the
following:
``SEC. 49. NEXT GENERATION ENTREPRENEURSHIP CORPS PROGRAM.
``(a) Definitions.--In this section--
``(1) the term `Committee' means the selection committee
established under subsection (k);
``(2) the term `community development financial
institution' has the meaning given the term in section 103 of
the Riegle Community Development and Regulatory Improvement Act
of 1994 (12 U.S.C. 4702);
``(3) the term `distressed region' means any census tract
or other area that is treated as a low-income community for
purposes of section 45D of the Internal Revenue Code of 1986;
``(4) the term `equity investment'--
``(A) means an investment for an ownership interest
in an entity, the financial return with respect to
which is principally aligned with the financial return
of the plurality of ownership interests in the entity;
and
``(B) includes a debt instrument that can be
converted to an equity ownership interest in an entity
based on future events;
``(5) the term `fellow' means an individual participating
as a fellow under the Program;
``(6) the term `minority depository institution' has the
meaning given the term in section 308 of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 (12
U.S.C. 1463 note);
``(7) the term `Program' means the Next Generation
Entrepreneurship Corps Program established under subsection
(b);
``(8) the term `qualified investor' means a person that--
``(A) invests equity in a small business concern
owned and operated under the Program by a fellow; and
``(B) has not more than $250,000,000 in assets;
``(9) the term `SCORE' means the Service Corps of Retired
Executives established under section 8(b)(1)(B);
``(10) the term `State' means any State of the United
States, the District of Columbia, and any territory of the
United States;
``(11) the term `veteran business outreach center' means a
veteran business outreach center described in section 32; and
``(12) the term `women's business center' means a women's
business center operating pursuant to section 29.
``(b) Establishment.--
``(1) In general.--There is established within the
Administration an independent fellowship pilot program to be
known as the `Next Generation Entrepreneurship Corps Program'
to foster entrepreneurship in the most distressed regions of
the United States, including distressed regions affected by the
COVID-19 pandemic.
``(2) Administration.--The Program shall be administered by
the Office of Entrepreneurial Development of the
Administration.
``(3) Authorization.--
``(A) In general.--Under the Program, there shall
be 1 group of fellows selected each year for 5 years of
the Program, with each group serving for a 2-year
period.
``(B) Reports.--Not later than 1 year after the
second group of fellows is selected under the Program,
and every 2 years thereafter, the Committee shall
submit to Congress an evaluation of the Program, along
with any recommendations and options to expand the
Program and make the Program permanent.
``(4) Third party contracts.--
``(A) In general.--The Office of Entrepreneurial
Development of the Administration may contract with
third party nonprofit organizations that--
``(i) do or plan to do service work to
execute the Program; and
``(ii) the Committee determines have
relevant experience to carry out the Program.
``(B) Report.--Not later than 90 days after the
date of enactment of the Next Generation
Entrepreneurship Corps Act, the Administrator shall
submit to Congress a report on--
``(i) the requirements and plans relating
to third party contractors described in
subparagraph (A); and
``(ii) how those third party contractors
will begin to carry out the Program.
``(5) Implementation plan.--Not later than 90 days after
the date of enactment of the Next Generation Entrepreneurship
Corps Act, the Administrator shall submit to Congress a report
discussing the plan of the Administrator to implement this
section, which shall include a discussion of--
``(A) how the Administrator will provide
administrative support to the Committee;
``(B) the plan of the Administrator to coordinate
the implementation of the Program with the Committee;
and
``(C) the status of the appointment of members of
the Committee.
``(c) Stipends.--
``(1) In general.--Each fiscal year, the Committee may
select not more than 320 fellows to participate in the Program
and receive a 2-year stipend of $120,000 to start and grow a
new small business concern.
``(2) Authority to reject.--The Assistant Administrator of
the Office of Entrepreneurial Development of the Administration
shall have the authority to reject any fellow selected by the
Committee to participate in the Program.
``(3) Allowable uses.--The Committee shall determine the
allowable uses of a stipend awarded under this subsection.
``(4) Stipend amount.--The amount of a stipend made under
this subsection shall be adjusted every 3 years to reflect
increases in the Consumer Price Index for All Urban Consumers
during that period.
``(5) Applications.--Each applicant for a stipend under
this subsection shall--
``(A) propose a small business concern idea that
will be located in a distressed region; and
``(B) submit to the Committee a small business
concern plan that demonstrates--
``(i) that the applicant will have primary
decision making authority in the small business
concern;
``(ii) a need for the small business
concern of the applicant in the community or
how the small business concern solves an
economic or social problem in the area to be
served by the small business concern or the
United States;
``(iii) how the applicant plans to build
their small business concern to employ local
talent in entry-level and mid-level positions
to ensure quality job growth;
``(iv) a vision for long-term growth in the
area to be served by the small business
concern; and
``(v) that the applicant does not, at the
time of application, have the resources to
start and grow a small business concern on
their own without assistance.
``(6) Requirements.--To receive a stipend under this
subsection, the applicant shall--
``(A) live or be willing to relocate to live in the
distressed region in which the small business concern
of the applicant is located, as determined by the
Committee;
``(B) indicate that the applicant intends to
provide products or services to such distressed region
through such small business concern; and
``(C) agree to make a good faith effort to, if the
applicant is hiring employees during the period of
participation in the Program or the 3 years following
such participation, hire--
``(i) locally from distressed regions in
the area served by the business of the
applicant;
``(ii) racial or ethnic minorities;
``(iii) persons with criminal convictions;
or
``(iv) the hard to employ.
``(7) Preference.--
``(A) In general.--The Committee shall give
preference to applicants for a stipend under this
subsection that are--
``(i) individuals moving to a distressed
region to encourage new small business concern
owners in those areas post-COVID-19;
``(ii) individuals who can demonstrate a
connection to the State or locality in which
the proposed small business concern will be
located;
``(iii) owners of small business concerns
whose businesses were closed or who had to
significant change their business model or
services due to the COVID-19 public health
crisis;
``(iv) entrepreneurs within populations
underrepresented among small business concern
owners in the United States, including women
and racial and ethnic minority groups;
``(v) veterans;
``(vi) individuals who can demonstrate
residence of not less than 2 years in a low-
income census tract;
``(vii) individuals who have taken non-
traditional pathways for professional
development, including individuals without a
bachelor's degree or who received Federal Pell
Grants under section 401 of the Higher
Education Act of 1965 (20 U.S.C. 1070a), who
shall not be required to establish a small
business concern in a distressed region; or
``(viii) individuals with business plans
that have potential, if successful, to be
eligible for any contracting assistance program
of the Administration, including the business
development program under section 8(a), the
Women Owned Small Business Federal contracting
program under section 8(m), the service-
disabled veteran-owned small business program
under section 36, and the HUBZone program under
section 31.
``(B) Considerations.--When evaluating applicants
for a stipend under this subsection, the Committee--
``(i) shall differentiate between
applicants for a stipend under this subsection
that aim to be a high-growth startup and a
traditional small business concern;
``(ii) shall consider similar categories of
applicants concurrently;
``(iii) should seek to encourage both high-
growth and traditional startups across all
geographic areas; and
``(iv) shall--
``(I) not prioritize applicants
with prior experience with starting and
growing a small business concern over
applications without that experience;
and
``(II) give equal consideration to
applicants with and without the
experience described in subclause (I).
``(C) Additional metrics.--The Committee shall
establish additional metrics by which to evaluate
applicants for a stipend under this subsection,
including by creating local and State level applicant
competitions.
``(8) New entrepreneurs.--The Committee may award stipends
under this subsection to applicants both at the beginning
stages of building their small business concern as well as to
applicants who have had limited prior business experience.
``(9) Number of fellows per score chapter.--
``(A) In general.--Each year, the Committee shall,
to the maximum extent practicable, designate 1 fellow
per SCORE chapter in the United States, provided that
the selection process under this subsection remains
competitive.
``(B) Distribution.--The Committee shall ensure a
fair geographic distribution of fellows selected under
this subsection, including between urban and rural
areas, and may create a process for ensuring that
distribution if the Committee determines necessary.
``(d) Benefits.--
``(1) Student loan deferment.--For each fellow who notifies
the Committee that the fellow has a loan made, insured, or
guaranteed under part B, D, or E of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1071 et seq.; 1087a et seq.;
1087aa et seq.) that is in repayment--
``(A) the Committee shall--
``(i) inform the Secretary of Education
that the fellow is participating in a
fellowship through the Program; and
``(ii) provide any additional information
requested by the Secretary of Education
regarding the fellow and the loan; and
``(B) the Secretary of Education shall, for the
period of the fellowship--
``(i) in the case of a loan made under part
B or E of title IV of the Higher Education Act
of 1965 (20 U.S.C. 1071 et seq.; 1087aa et
seq.), require that the holder of the loan
place the loan in deferment, in which interest
shall accrue and be paid by the Secretary, in
the same manner as a deferment made under
section 428(b)(1)(M) of the Higher Education
Act of 1965 (20 U.S.C. 1078(b)(1)(M)); and
``(ii) in the case of a loan made under
part D of such Act (20 U.S.C. 1087a et seq.),
place the loan in deferment, during which
interest shall not accrue, in the same manner
as a deferment made under section 455(f)(1) of
such Act (20 U.S.C. 1087e(f)(1)) for a Federal
Direct Stafford Loan under such part.
``(2) Health care.--With respect to any fellow that is not
otherwise covered under a health care policy, the Administrator
shall provide or make available a basic health care policy in
accordance with section 140(d) of the National and Community
Service Act of 1990 (42 U.S.C. 12594(d)) for the 2-year period
during which the fellow serves under the Program.
``(e) Mentor Support.--
``(1) In general.--Each fellow--
``(A) shall be assigned by the designated SCORE
chapter of the fellow a local mentor, and the
designated SCORE chapter may work in partnership with a
small business development center, a veteran business
outreach center, a women's business center, or other
local resources to pair the fellow with a mentor and
provide mentorship;
``(B) following completion of the Program is
encouraged to join SCORE, a small business development
center, a veteran business outreach center, or a
women's business center to contribute back to the
Program and facilitate partnerships with local resource
partners of the Administration; and
``(C) shall be assigned by the Committee a mentor
from the Next Generation Entrepreneurship Corps Board,
which shall be created by the Committee and consist of
notable chief executive officers of companies and
venture capitalists from across the United States to
help advise fellows.
``(2) Partnership.--The Committee shall develop a
partnership with the mentor-protege program for small business
concerns eligible to receive contracts pursuant to section 8(a)
to assign a mentor during the second year of the fellowship to
any fellow that has proposed a small business concern that may
be eligible to receive contracts pursuant to section 8(a).
``(3) Resources.--In providing mentorship under paragraph
(1), each resource partner described in that paragraph shall
engage the resources of the Administration in each State,
including through partnerships with community organizations.
``(4) Sense of congress.--It is the sense of Congress
that--
``(A) in addition to the mentor assigned under
paragraph (1)(A), the Committee should make a good
faith effort to pair each fellow with a mentor located
in the region in which the designated SCORE chapter of
the fellow is located; and
``(B) fellows should be encouraged to become
mentors under the Program after completion of their
participation in the Program.
``(f) Immersive Initial Training.--
``(1) In general.--Each fellow shall attend an immersive
training course designed by the Committee at the beginning of
the fellowship, which shall--
``(A) provide distinct education materials,
including resources and information, for all fellows on
high-growth startups and distinct education materials
for all fellows on traditional small business concerns;
``(B) incorporate skills building, transfer of
business know-how when beginning a small business
concern, and a discussion of resources of the
Administration; and
``(C) include information on local resources
available from SCORE, small business development
centers, veteran business outreach centers, and women's
business centers.
``(2) Selection of hosts.--Each year, the Committee shall
select not more than 1 small business resource partner to host
the immersive training course described in paragraph (1).
``(g) Network Building.--
``(1) In general.--To foster connections across the United
States with other innovators, each fellow--
``(A) shall attend not less than 1 small business
concern-related conference per year of the fellowship;
and
``(B) is encouraged to attend regional small
business concern-related conferences.
``(2) Committee.--The Committee--
``(A) is encouraged to--
``(i) introduce and foster relationships
between Federal, State, and local
entrepreneurial support organizations and the
fellows; and
``(ii) work to build a peer to peer network
among the fellows by providing resources for
events for fellows in order to build community
among fellows; and
``(B) may use funds received by the organization
described in subsection (k)(5)(D) for purposes
described in subparagraph (A)(ii).
``(h) Access to Capital Strategy.--
``(1) Establishment.--
``(A) In general.--The Committee shall establish a
strategy for access to capital, insurance, and other
core small business concern services and products, for
use both during and after the Program, for fellows that
provides for the needs of both traditional small
business concerns and high-growth startups.
``(B) Requirements.--Under the strategy established
under subparagraph (A), the Committee shall--
``(i) provide to each fellow information
regarding the program under section 8(a) and
assistance in submitting the information
required for the small business concern of the
fellow to be certified to participate in the
program; and
``(ii) at the end of each fellowship,
provide follow-up assistance to facilitate the
certification of the small business concern of
the fellow to participate in the program under
section 8(a).
``(2) Matching.--Under the strategy established under
paragraph (1), the Committee shall match fellows with a full
range of lenders, investors, and insurers, including both local
and national resources.
``(3) Preference.--The Administrator may give preference to
fellows with respect to loans under section 7(a), microloans
under section 7(m), and assistance provided under title V of
the Small Business Investment Act of 1958 (15 U.S.C. 695 et
seq.) to facilitate quick and affordable access to credit
during the period of the fellowship and during the 5-year
period after the end of the fellowship, including by--
``(A) waiving the credit elsewhere requirement; and
``(B) expediting the application timeline for that
assistance.
``(4) Waiver of personal guarantee.--With respect to high
growth startup small business concerns established by fellows,
the Administrator shall waive the personal guarantee
requirement for those small business concerns that apply for
loans under section 7(a), microloans under section 7(m), or
assistance provided under title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.).
``(5) Assistance with access to the 8(a) program.--For
purposes of participation in the program under section 8(a)--
``(A) a small business concern of a fellow shall be
eligible to seek certification to participate in the
program under section 8(a) if the small business
concern has been in business in the primary industry
classification of the small business concern for at
least 18 months; and
``(B) the Administrator--
``(i) shall evaluate whether to establish
an expedited process for certification of a
small business concern of a fellow to
participate in the program under section 8(a);
and
``(ii) may implement a process described in
clause (i) for fellows during the period of the
fellowship and during the 5-year period after
the end of the fellowship.
``(i) Program Fund for Capital.--
``(1) In general.--There is established in the Treasury a
fund, which shall be available to the Administrator to provide
loans to qualified investors.
``(2) Amount of loans.--
``(A) In general.--A loan to a qualified investor
under this subsection shall be not more than 66.6
percent of the amount of equity the qualified investor
invested in the applicable small business concern owned
and operated under the Program by a fellow.
``(B) Establishment of loan limits.--The
Administrator may establish additional limits on the
maximum amount of loans to qualified investors under
this subsection if the Administrator determines the
limits are necessary to ensure that the Administrator
may make such loans during the full period of the
Program, using the amounts made available for such
loans.
``(3) Loan term.--A loan under this subsection shall have a
maturity of not longer than 30 years.
``(4) Rate of interest.--The rate of interest on a loan
under this subsection shall be equal to the discount window
primary credit interest rate most recently published on the
Federal Reserve Statistical Release on selected interest rates
(daily or weekly), commonly referred to as the `H.15 release'
or the `Federal funds rate'.
``(5) Funding.--
``(A) Appropriations.--Out of funds in the Treasury
not otherwise appropriated, there is appropriated to
the fund established under paragraph (1) $30,000,000,
to remain available until expended.
``(B) Reinvestment of repayments.--Any amounts
received from the repayment of a loan under this
subsection shall be deposited in the fund established
under paragraph (1) and shall remain available until
expended.
``(j) Reporting by Fellows.--Each fellow shall submit to the
Committee and each mentor assigned to the fellow under subsection (e) a
progress report on the activities of the fellow with respect to each
year during which the fellow participates in the Program and each of
the 3 years after the fellow completes participation in the Program,
which shall include information regarding revenue, jobs created,
pursuit of external funding and other metrics determined by Committee.
``(k) Selection Committee.--
``(1) In general.--The Administration shall establish a
selection committee composed of experts from educational,
scientific, technical, and public service backgrounds to--
``(A) build the next generation of entrepreneurs
under the Program through a transparent, competitive,
fair, and rigorous process;
``(B) enable entrepreneurs each year under the
Program to successfully build small business concerns
in distressed regions by providing guidance, expertise,
and partnerships between the fellows and business
supports;
``(C) increase the diversity of entrepreneurship in
the United States;
``(D) increase entrepreneurship in distressed
regions;
``(E) increase talent retention and migration to
distressed regions;
``(F) increase investment and growth in communities
in distressed regions; and
``(G) ensure the transparent, efficient and
effective use of taxpayer funds.
``(2) Membership.--
``(A) Composition.--The Committee shall be composed
of 12 members appointed by the Administrator, of whom--
``(i) 1 member shall be a small business
concern investor such as a venture capitalist
or an angel investor;
``(ii) 1 member shall be a small business
concern banker, including--
``(I) a community development
financial institution; or
``(II) a minority depository
institution;
``(iii) 3 members shall be successful
entrepreneurs;
``(iv) 1 member shall be a SCORE
representative;
``(v) 1 member shall be a mentor in the
mentor-protege program for small business
concerns eligible to receive contracts pursuant
to section 8(a) who has relevant contracting
experience;
``(vi) 1 member shall be an expert on
economic development;
``(vii) 1 member shall be an expert on
distressed regions; and
``(viii) 3 members shall be individuals
from the private sector with relevant
experience as related to the mission and the
duties of the Committee.
``(B) Preference.--There shall be a preference for
the appointment of members of the Committee who are
within populations that are underrepresented among
small business concern owners in the United States,
including women and ethnic minority groups.
``(C) Chair.--The Administrator shall select the
chair of the Committee from among members of the
Committee.
``(D) Term; vacancies.--The term of office of each
member of the Committee shall be 6 years, except that--
``(i) of the members first serving on the
Committee--
``(I) 4 shall serve terms of 2
years;
``(II) 4 shall serve terms of 4
years; and
``(III) 4 shall serve terms of 6
years;
``(ii) any member appointed to fill a
vacancy shall serve for the remainder of the
term for which his predecessor was appointed
and shall be appointed in the same manner as
the original appointment for that vacancy was
made; and
``(iii) upon the expiration of their term
of office, any member of the Committee may
continue to serve until their successor is
appointed.
``(E) Political party.--Not more than 6 members of
the Committee shall be from the same political party.
``(F) Appointments.--Appointments to the Committee
shall be made not later than 30 days after the date of
enactment of the Next Generation Entrepreneurship Corps
Act.
``(3) Compensation.--Members of the Committee shall serve
without pay, but shall be entitled to reimbursement for travel,
subsistence, and other necessary expenses incurred in the
performance of their duties.
``(4) First meeting.--Not later than 30 days after the
appointment of a majority of Committee members, the Committee
shall hold its first meeting.
``(5) Duties and responsibilities.--The Committee--
``(A) shall provide for the conduct of a nationwide
competition for selecting fellows to participate in the
Program by--
``(i) issuing a request for applications
not later than 6 months after the date of
enactment of the Next Generation
Entrepreneurship Corps Act, with a deadline for
submissions that is not later than 12 months
after such date of enactment;
``(ii) partnering with private
organizations, including those with investment
experience or experience in the area of
investing in businesses, to provide educational
materials to educate the public about the
Program, help ensure that the Program is
competitive, and increase awareness of the
Program;
``(iii) partnering with organizations that
work with or provide programming for the K-20
entrepreneurship pipeline; and
``(iv) subject to subsection (c)(2),
selecting fellows, which shall include
selecting the first group of fellows not later
than 13 months after the date of enactment of
the Next Generation Entrepreneurship Corps Act;
``(B) shall carry out the duties described in this
section with respect to the Program;
``(C) may identify--
``(i) priority sectors that advance the
social and economic development of a geographic
area or the United States, including social
services, education, health and nutrition,
child care, manufacturing, technology, or any
industry sector that supports the economic
development strategy of an area; and
``(ii) prohibited sectors and businesses
that could harm the economic development of
communities, such as--
``(I) predatory financial services
and addictive substances; and
``(II) businesses described in
section 120.110 of title 13, Code of
Federal Regulations, or any successor
regulation;
``(D) may create an entity described in section
501(c)(3) of the Internal Revenue Code and exempt from
taxation under section 501(a) of such Code to solicit
private funding for the Program;
``(E) may work with the Economic Development Agency
of the Department of Commerce in carrying out the
duties of the Program and providing resources to
fellows; and
``(F) shall assist with the facilitation of
pairing, and encourage designated SCORE chapters to
pair, assigned fellows with local accelerators.
``(6) Staff.--The Committee may appoint a staff director
and other personnel as necessary to carry out the duties of the
Committee.
``(7) Applicability of faca.--The Federal Advisory
Committee Act (5 U.S.C. App.) shall not apply to the Committee.
``(l) Reports.--Not later than 1 year after the date on which the
Committee selects the first group of fellows, and every year
thereafter, the Committee shall submit to Congress a report that
empirically evaluates the effectiveness of the Program, including an
evaluation by revenues and jobs created and sustained, small business
concern survival rates, capital raised, and other metrics determined
appropriate by the Committee.
``(m) Authorizations of Appropriations.--
``(1) Stipends and network building.--There is authorized
to be appropriated $39,200,000 for each fiscal year for the
Program, of which--
``(A) $38,400,000 shall be for stipends made under
subsection (b)(1); and
``(B) $800,000 shall be for providing reimbursable
expenses for travel and stay up to $2,500 per fellow to
attend 1 conference described in subsection (g).
``(2) SCORE.--There is authorized to be appropriated
$5,000,000 for each fiscal year to SCORE to carry out
activities under the Program.
``(3) Immersive initial training.--There is authorized to
be appropriated for each fiscal year such sums as may be
necessary to provide to the Committee $4,000 per fellow for the
cost of hosting the immersive initial training under subsection
(f).
``(4) Staff and administration.--There is authorized to be
appropriated $2,500,000 for each fiscal year for staff and
administrative expenses of the Administration to implement the
Program.
``(5) Student loan deferral and healthcare.--There is
authorized to be appropriated such sums as may be necessary to
carry out subsection (d).
``(6) Committee costs.--There is authorized to be
appropriated $4,000,000 for each fiscal year for travel and
administrative expenses of the Committee.''.
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