UPLIFT Act of 2019

II 116TH CONGRESS 1ST SESSION S. 2717 To amend the Small Business Act to spur entrepreneurial ecosystems in underserved communities. IN THE SENATE OF THE UNITED STATES OCTOBER 28, 2019 Mr. CARDIN introduced the following bill; which was read twice and referred to the Committee on Small Business and Entrepreneurship 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 2019’’ or the ‘‘UPLIFT Act of 2019’’. 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 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 2 •S 2717 IS 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 United 11 States economy. 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 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 3 •S 2717 IS (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 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 4 •S 2717 IS number of employees, which represent lost oppor- 1 tunity for the economy; 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 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 5 •S 2717 IS ‘‘(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; or 10 ‘‘(B) an area that has been designated 11 as— 12 ‘‘(i) an empowerment zone under sec- 13 tion 1391 of the Internal Revenue Code of 14 1986; 15 ‘‘(ii) a Promise Zone by the Secretary 16 of Housing and Urban Development; or 17 ‘‘(iii) a low-income neighborhood or 18 moderate-income neighborhood for pur- 19 poses of the Community Reinvestment Act 20 of 1977 (12 U.S.C. 2901 et seq.). 21 ‘‘(3) GROWING; NEWLY ESTABLISHED; START- 22 UP.—The terms ‘growing’, ‘newly established’, and 23 ‘startup’, with respect to a small business concern, 24 mean growing, newly established, and startup, re- 25 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 6 •S 2717 IS spectively, within the meaning given those terms 1 under section 7(m). 2 ‘‘(4) INCUBATOR.—The term ‘incubator’ means 3 an organization— 4 ‘‘(A) that— 5 ‘‘(i) tends to work with startup and 6 newly established small business concerns; 7 and 8 ‘‘(ii) provides mentorship to startup 9 and newly established small business con- 10 cerns; and 11 ‘‘(B) that may— 12 ‘‘(i) provide a co-working environment 13 or a month-to-month lease program; and 14 ‘‘(ii) work with a startup or newly es- 15 tablished small business concern for a pre- 16 determined period or an open-ended pe- 17 riod. 18 ‘‘(5) INDIVIDUALS WITH A DISABILITY.—The 19 term ‘individuals with a disability’ means more than 20 one individual with a disability, as defined in section 21 3 of the Americans with Disabilities Act of 1990 (42 22 U.S.C. 12102). 23 ‘‘(6) ELIGIBLE ENTITY.—The term ‘eligible en- 24 tity’ means— 25 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 7 •S 2717 IS ‘‘(A) an institution described in any of 1 paragraphs (1) through (7) of section 371(a) of 2 the Higher Education Act of 1965 (20 U.S.C. 3 1067q(a)); or 4 ‘‘(B) a junior or community college, as de- 5 fined in section 312 of the Higher Education 6 Act of 1965 (20 U.S.C. 1058). 7 ‘‘(7) RURAL AREA.—The term ‘rural area’ has 8 the meaning given that term in section 7(m)(11). 9 ‘‘(8) SOCIALLY AND ECONOMICALLY DISADVAN- 10 TAGED INDIVIDUALS.—The term ‘socially and eco- 11 nomically disadvantaged individual’ means a socially 12 and economically disadvantaged individual within the 13 meaning given that term under section 8(d)(3)(C). 14 ‘‘(b) ESTABLISHMENT.—Not later than 1 year after 15 the date of enactment of the Ushering Progress by 16 Leveraging Innovation and Future Technology Act of 17 2019, the Administrator shall develop and begin imple- 18 menting a program (to be known as the ‘Innovation Cen- 19 ters Program’) to enter into cooperative agreements with 20 eligible entities under this section. 21 ‘‘(c) AUTHORITY.— 22 ‘‘(1) IN GENERAL.—The Administrator may— 23 ‘‘(A) enter into cooperative agreements to 24 provide financial assistance to eligible entities 25 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 8 •S 2717 IS to conduct 5-year projects for the benefit of 1 startup, newly established, or growing small 2 business concerns; and 3 ‘‘(B) renew a cooperative agreement en- 4 tered into under this section for additional 3- 5 year periods, in accordance with paragraph (3). 6 ‘‘(2) PROJECT REQUIREMENTS.—A project con- 7 ducted under a cooperative agreement under this 8 section shall— 9 ‘‘(A) include operating as an accelerator, 10 an incubator, or any other small business inno- 11 vation-focused project as the Administrator ap- 12 proves; 13 ‘‘(B) be carried out in such locations as to 14 provide maximum accessibility and benefits to 15 the small business concerns that the project is 16 intended to serve; 17 ‘‘(C) have a full-time staff, including a 18 full-time director who shall— 19 ‘‘(i) have the authority to make ex- 20 penditures under the budget of the project; 21 and 22 ‘‘(ii) manage the activities carried out 23 under the project; 24 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 9 •S 2717 IS ‘‘(D) include the joint provision of pro- 1 grams and services by the eligible entity and 2 the Administration, which— 3 ‘‘(i) shall be jointly developed, nego- 4 tiated, and agreed upon, with full partici- 5 pation of both parties, pursuant to an exe- 6 cuted cooperative agreement between the 7 eligible entity and the Administration; and 8 ‘‘(ii) shall include— 9 ‘‘(I) 1-to-1 individual counseling 10 as described in section 21(c)(3)(A); 11 and 12 ‘‘(II) a formal, structured 13 mentorship program; 14 ‘‘(E) incorporate continuous upgrades and 15 modifications to the services and programs of- 16 fered under the project, as needed to meet the 17 changing and evolving needs of the business 18 community; 19 ‘‘(F) involve working with underserved 20 groups, which include— 21 ‘‘(i) women; 22 ‘‘(ii) socially and economically dis- 23 advantaged individuals; 24 ‘‘(iii) veterans; 25 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 10 •S 2717 IS ‘‘(iv) individuals with disabilities; or 1 ‘‘(v) startup, newly established, or 2 growing small business concerns located in 3 rural areas; 4 ‘‘(G) not impose or otherwise collect a fee 5 or other compensation in connection with par- 6 ticipation in the programs and services de- 7 scribed in subparagraph (D)(ii); and 8 ‘‘(H) ensure that small business concerns 9 participating in the project have access, includ- 10 ing through resource partners, to information 11 concerning Federal, State, and local regulations 12 that affect small business concerns. 13 ‘‘(3) CONTINUED FUNDING.— 14 ‘‘(A) IN GENERAL.—An eligible entity that 15 enters into an initial cooperative agreement or 16 a renewal of a cooperative under paragraph (1) 17 may submit an application for a 3-year renewal 18 of the cooperative agreement at such time, in 19 such manner, and accompanied by such infor- 20 mation as the Administrator may establish. 21 ‘‘(B) APPLICATION AND APPROVAL CRI- 22 TERIA.— 23 ‘‘(i) CRITERIA.—The Administrator 24 shall develop and publish criteria for the 25 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 11 •S 2717 IS consideration and approval of applications 1 for renewals by eligible entities under this 2 paragraph, which shall take into account 3 the structure and the stated goals of the 4 project. 5 ‘‘(ii) NOTIFICATION.—Not later than 6 60 days after the date of the deadline to 7 submit applications for each fiscal year, 8 the Administrator shall approve or deny 9 any application under this paragraph and 10 notify the applicant for each such applica- 11 tion. 12 ‘‘(C) PRIORITY.—In allocating funds made 13 available for cooperative agreements under this 14 section, the Administrator shall give applica- 15 tions under this paragraph priority over first- 16 time applications for cooperative agreements 17 under paragraph (1)(A). 18 ‘‘(4) LIMIT ON USE OF FUNDS.—Amounts re- 19 ceived by an eligible entity under a cooperative 20 agreement under this section may not be used to 21 provide capital to a participant in the project carried 22 out under the cooperative agreement. 23 ‘‘(5) SCOPE OF AUTHORITY.— 24 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 12 •S 2717 IS ‘‘(A) SUBJECT TO APPROPRIATIONS.—The 1 authority of the Administrator to enter into co- 2 operative agreements under this section shall be 3 in effect for each fiscal year only to the extent 4 and in the amounts as are provided in advance 5 in appropriations Acts. 6 ‘‘(B) SUSPENSION, TERMINATION, AND 7 FAILURE TO RENEW OR EXTEND.—After the 8 Administrator has entered into a cooperative 9 agreement with an eligible entity under this sec- 10 tion, the Administrator shall not suspend, ter- 11 minate, or fail to renew or extend the coopera- 12 tive agreement unless the Administrator pro- 13 vides the eligible entity with written notification 14 setting forth the reasons therefore and affords 15 the eligible entity an opportunity for a hearing, 16 appeal, or other administrative proceeding 17 under chapter 5 of title 5, United States Code. 18 ‘‘(d) CRITERIA.— 19 ‘‘(1) IN GENERAL.—The Administrator shall— 20 ‘‘(A) establish and rank in terms of rel- 21 ative importance the criteria the Administrator 22 shall use in awarding cooperative agreements 23 under this section, which shall include— 24 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with BILLS 13 •S 2717 IS ‘‘(i) whether the proposed project will 1 be located in— 2 ‘‘(I) a federally recognized area 3 of economic distress; 4 ‘‘(II) a rural area; or 5 ‘‘(III) an area lacking sufficient 6 entrepreneurial development re- 7 sources, as determined by the Admin- 8 istrator; and 9 ‘‘(ii) whether the proposed project 10 demonstrates a commitment to partner 11 with core stakeholders working with small 12 business concerns in the relevant area, in- 13 cluding— 14 ‘‘(I) investment and lending orga- 15 nizations; 16 ‘‘(II) nongovernmental organiza- 17 tions; 18 ‘‘(III) programs of State and 19 local governments that are concerned 20 with aiding small business concerns; 21 ‘‘(IV) Federal agencies; and 22 ‘‘(V) for-profit organizations with 23 an expertise in small business innova- 24 tion; 25 VerDate Sep 11 2014 23:33 Nov 01, 2019 Jkt 099200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S2717.IS S2717 kjohnson on DSK79L0C42 with [Text truncated for display. 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