UPLIFT Act of 2021

I 117TH CONGRESS 1ST SESSION H. R. 1010 To amend the Small Business Act to spur entrepreneurial ecosystems in underserved communities. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 11, 2021 Mr. MFUME introduced the following bill; which was referred to the Committee on Small Business A BILL To amend the Small Business Act to spur entrepreneurial ecosystems in underserved communities. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Ushering Progress by 4 Leveraging Innovation and Future Technology Act of 5 2021’’ or the ‘‘UPLIFT Act of 2021’’. 6 SEC. 2. FINDINGS. 7 Congress finds the following: 8 (1) Studies have found that incubators, accel- 9 erators, and other similar models are effective at in- 10 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 1010 IH creasing revenues, the number of employees, and the 1 likelihood that the business venture will be success- 2 ful for participants. 3 (2) According to the Kauffman Foundation— 4 (A) minority-owned and women-owned 5 businesses are half as likely to employ people 6 than nonminority-owned and men-owned busi- 7 nesses; and 8 (B) if minorities started businesses at the 9 same rate as nonminorities, approximately 10 9,500,000 jobs would be added to the economy 11 of the United States. 12 (3) The Kauffman Foundation also found that 13 the percentage of startups in rural communities has 14 dropped from 20 percent in the 1980s to 12.2 per- 15 cent. 16 (4) According to the Martin Prosperity Insti- 17 tute, less than 1 percent of all venture capital fund- 18 ing goes to businesses located in rural areas. 19 (5) According to PitchBook, around 2 percent 20 of all venture capital funding goes to businesses with 21 women founders. 22 (6) According to Crunchbase, less than 3 per- 23 cent of all venture capital funding goes to businesses 24 with Black and Hispanic founders. 25 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 1010 IH (7) Historically Black colleges and universities, 1 minority-serving institutions, and community col- 2 leges are anchor institutions that serve populations 3 that tend to be underrepresented in entrepreneur- 4 ship, particularly in high-growth sectors. 5 SEC. 3. PURPOSES. 6 The purposes of the Innovation Centers Program es- 7 tablished under section 49 of the Small Business Act, as 8 added by this Act, are to— 9 (1) spur economic growth in underserved com- 10 munities by creating good paying jobs and pathways 11 to prosperity; 12 (2) increase prospects for success for small 13 business concerns in underserved communities, 14 which often suffer from higher business failure rates 15 than the national average; 16 (3) help create a pipeline for small business 17 concerns in underserved and rural markets into 18 high-growth sectors, where they are generally under- 19 represented; 20 (4) help address the multi-decade decline in the 21 rate of new business creation; 22 (5) close the gaps that underserved small busi- 23 ness concerns often have in terms of revenue and 24 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 1010 IH number of employees, which represent lost oppor- 1 tunity for the economy of the United States; and 2 (6) encourage collaboration between the Small 3 Business Administration and institutions of higher 4 learning that serve low-income and minority commu- 5 nities. 6 SEC. 4. INNOVATION CENTERS PROGRAM. 7 (a) IN GENERAL.—The Small Business Act (15 8 U.S.C. 631 et seq.) is amended— 9 (1) by redesignating section 49 as section 50; 10 and 11 (2) by inserting after section 48 the following: 12 ‘‘SEC. 49. INNOVATION CENTERS PROGRAM. 13 ‘‘(a) DEFINITIONS.—In this section: 14 ‘‘(1) ACCELERATOR.—The term ‘accelerator’ 15 means an organization— 16 ‘‘(A) that— 17 ‘‘(i) works with a startup or growing 18 small business concern for a predetermined 19 period; and 20 ‘‘(ii) provides mentorship and instruc- 21 tion to scale businesses; and 22 ‘‘(B) that may— 23 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 1010 IH ‘‘(i) provide, but is not exclusively de- 1 signed to provide, seed investment in ex- 2 change for a small amount of equity; and 3 ‘‘(ii) offer startup capital or the op- 4 portunity to raise capital from outside in- 5 vestors. 6 ‘‘(2) FEDERALLY RECOGNIZED AREA OF ECO- 7 NOMIC DISTRESS.—The term ‘federally recognized 8 area of economic distress’ means— 9 ‘‘(A) a HUBZone, as that term is defined 10 in section 31(b); or 11 ‘‘(B) an area that has been designated 12 as— 13 ‘‘(i) an empowerment zone under sec- 14 tion 1391 of the Internal Revenue Code of 15 1986; 16 ‘‘(ii) a Promise Zone by the Secretary 17 of Housing and Urban Development; or 18 ‘‘(iii) a low-income neighborhood or 19 moderate-income neighborhood for pur- 20 poses of the Community Reinvestment Act 21 of 1977 (12 U.S.C. 2901 et seq.). 22 ‘‘(3) GROWING; NEWLY ESTABLISHED; START- 23 UP.—The terms ‘growing’, ‘newly established’, and 24 ‘startup’, with respect to a small business concern, 25 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 1010 IH mean growing, newly established, and startup, re- 1 spectively, within the meaning given those terms 2 under section 7(m). 3 ‘‘(4) INCUBATOR.—The term ‘incubator’ means 4 an organization— 5 ‘‘(A) that— 6 ‘‘(i) tends to work with startup and 7 newly established small business concerns; 8 and 9 ‘‘(ii) provides mentorship to startup 10 and newly established small business con- 11 cerns; and 12 ‘‘(B) that may— 13 ‘‘(i) provide a co-working environment 14 or a month-to-month lease program; and 15 ‘‘(ii) work with a startup or newly es- 16 tablished small business concern for a pre- 17 determined period or an open-ended pe- 18 riod. 19 ‘‘(5) INDIVIDUALS WITH A DISABILITY.—The 20 term ‘individuals with a disability’ means more than 21 1 individual with a disability, as defined in section 22 3 of the Americans with Disabilities Act of 1990 (42 23 U.S.C. 12102). 24 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 1010 IH ‘‘(6) ELIGIBLE ENTITY.—The term ‘eligible en- 1 tity’ means— 2 ‘‘(A) an institution described in any of 3 paragraphs (1) through (7) of section 371(a) of 4 the Higher Education Act of 1965 (20 U.S.C. 5 1067q(a)); or 6 ‘‘(B) a junior or community college, as de- 7 fined in section 312 of the Higher Education 8 Act of 1965 (20 U.S.C. 1058). 9 ‘‘(7) RURAL AREA.—The term ‘rural area’ has 10 the meaning given the term in section 7(m)(11). 11 ‘‘(8) SOCIALLY AND ECONOMICALLY DISADVAN- 12 TAGED INDIVIDUALS.—The term ‘socially and eco- 13 nomically disadvantaged individual’ means a socially 14 and economically disadvantaged individual within the 15 meaning given that term in section 8(d)(3)(C). 16 ‘‘(b) ESTABLISHMENT.—Not later than 1 year after 17 the date of enactment of the Ushering Progress by 18 Leveraging Innovation and Future Technology Act of 19 2021, the Administrator shall develop and begin imple- 20 menting a program (to be known as the ‘Innovation Cen- 21 ters Program’) to enter into cooperative agreements with 22 eligible entities under this section. 23 ‘‘(c) AUTHORITY.— 24 ‘‘(1) IN GENERAL.—The Administrator may— 25 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 1010 IH ‘‘(A) enter into cooperative agreements to 1 provide financial assistance to eligible entities 2 to conduct 5-year projects for the benefit of 3 startup, newly established, or growing small 4 business concerns; and 5 ‘‘(B) renew a cooperative agreement en- 6 tered into under this section for additional 3- 7 year periods, in accordance with paragraph (3). 8 ‘‘(2) PROJECT REQUIREMENTS.—A project con- 9 ducted under a cooperative agreement under this 10 section shall— 11 ‘‘(A) include operating as an accelerator, 12 an incubator, or any other small business inno- 13 vation-focused project as the Administrator ap- 14 proves; 15 ‘‘(B) be carried out in such locations as to 16 provide maximum accessibility and benefits to 17 the small business concerns that the project is 18 intended to serve; 19 ‘‘(C) have a full-time staff, including a 20 full-time director who shall— 21 ‘‘(i) have the authority to make ex- 22 penditures under the budget of the project; 23 and 24 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 1010 IH ‘‘(ii) manage the activities carried out 1 under the project; 2 ‘‘(D) include the joint provision of pro- 3 grams and services by the eligible entity and 4 the Administration, which— 5 ‘‘(i) shall be jointly developed, nego- 6 tiated, and agreed upon, with full partici- 7 pation of both parties, pursuant to an exe- 8 cuted cooperative agreement between the 9 eligible entity and the Administration; and 10 ‘‘(ii) shall include— 11 ‘‘(I) one-to-one individual coun- 12 seling, as described in section 13 21(c)(3)(A); and 14 ‘‘(II) a formal, structured 15 mentorship program; 16 ‘‘(E) incorporate continuous upgrades and 17 modifications to the services and programs of- 18 fered under the project, as needed to meet the 19 changing and evolving needs of the business 20 community; 21 ‘‘(F) involve working with underserved 22 groups, which include— 23 ‘‘(i) women; 24 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 1010 IH ‘‘(ii) socially and economically dis- 1 advantaged individuals; 2 ‘‘(iii) veterans; 3 ‘‘(iv) individuals with disabilities; or 4 ‘‘(v) startup, newly established, or 5 growing small business concerns located in 6 rural areas; 7 ‘‘(G) not impose or otherwise collect a fee 8 or other compensation in connection with par- 9 ticipation in the programs and services de- 10 scribed in subparagraph (D)(ii); and 11 ‘‘(H) ensure that small business concerns 12 participating in the project have access, includ- 13 ing through resource partners, to information 14 concerning Federal, State, and local regulations 15 that affect small business concerns. 16 ‘‘(3) CONTINUED FUNDING.— 17 ‘‘(A) IN GENERAL.—An eligible entity that 18 enters into an initial cooperative agreement or 19 a renewal of a cooperative under paragraph (1) 20 may submit an application for a 3-year renewal 21 of the cooperative agreement at such time, in 22 such manner, and accompanied by such infor- 23 mation as the Administrator may establish. 24 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 11 •HR 1010 IH ‘‘(B) APPLICATION AND APPROVAL CRI- 1 TERIA.— 2 ‘‘(i) CRITERIA.—The Administrator 3 shall develop and publish criteria for the 4 consideration and approval of applications 5 for renewals by eligible entities under this 6 paragraph, which shall take into account 7 the structure and the stated goals of the 8 project. 9 ‘‘(ii) NOTIFICATION.—Not later than 10 60 days after the date of the deadline to 11 submit applications for each fiscal year, 12 the Administrator shall approve or deny 13 any application under this paragraph and 14 notify the applicant for each such applica- 15 tion. 16 ‘‘(C) PRIORITY.—In allocating funds made 17 available for cooperative agreements under this 18 section, the Administrator shall give applica- 19 tions under this paragraph priority over first- 20 time applications for cooperative agreements 21 under paragraph (1)(A). 22 ‘‘(4) LIMIT ON USE OF FUNDS.—Amounts re- 23 ceived by an eligible entity under a cooperative 24 agreement under this section may not be used to 25 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 12 •HR 1010 IH provide capital to a participant in the project carried 1 out under the cooperative agreement. 2 ‘‘(5) SCOPE OF AUTHORITY.— 3 ‘‘(A) SUBJECT TO APPROPRIATIONS.—The 4 authority of the Administrator to enter into co- 5 operative agreements under this section shall be 6 in effect for each fiscal year only to the extent 7 and in the amounts as are provided in advance 8 in appropriations Acts. 9 ‘‘(B) SUSPENSION, TERMINATION, AND 10 FAILURE TO RENEW OR EXTEND.—After the 11 Administrator has entered into a cooperative 12 agreement with an eligible entity under this sec- 13 tion, the Administrator may not suspend, termi- 14 nate, or fail to renew or extend the cooperative 15 agreement unless the Administrator provides 16 the eligible entity with written notification set- 17 ting forth the reasons therefore and affords the 18 eligible entity an opportunity for a hearing, ap- 19 peal, or other administrative proceeding under 20 chapter 5 of title 5, United States Code. 21 ‘‘(d) CRITERIA.— 22 ‘‘(1) IN GENERAL.—The Administrator shall— 23 ‘‘(A) establish and rank in terms of rel- 24 ative importance the criteria the Administrator 25 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB2PROD with BILLS 13 •HR 1010 IH shall use in awarding cooperative agreements 1 under this section, which shall include— 2 ‘‘(i) whether the proposed project will 3 be located in— 4 ‘‘(I) a federally recognized area 5 of economic distress; 6 ‘‘(II) a rural area; or 7 ‘‘(III) an area lacking sufficient 8 entrepreneurial development re- 9 sources, as determined by the Admin- 10 istrator; and 11 ‘‘(ii) whether the proposed project 12 demonstrates a commitment to partner 13 with core stakeholders working with small 14 business concerns in the relevant area, in- 15 cluding— 16 ‘‘(I) investment and lending orga- 17 nizations; 18 ‘‘(II) nongovernmental organiza- 19 tions; 20 ‘‘(III) programs of State and 21 local governments that are concerned 22 with aiding small business concerns; 23 ‘‘(IV) Federal agencies; and 24 VerDate Sep 11 2014 23:15 Mar 08, 2021 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H1010.IH H1010 pamtmann on DSKBC07HB [Text truncated for display. 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