109th CONGRESS
2d Session
H. R. 6020
To support business incubation in academic settings, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
July 28, 2006
Mr. TIERNEY (for himself, Mr. SHIMKUS, Mr. CASE, Mr. FILNER, Ms. MCCOLLUM
of Minnesota, Mr. HINOJOSA, Mr. OWENS, Mr. MCGOVERN, Mr. POMEROY, Mr. BISHOP
of New York, Mr. MEEHAN, Ms. BALDWIN, Mr. DAVIS of Illinois, Mr. FRANK of
Massachusetts, Mr. NEAL of Massachusetts, Mr. RYAN of Ohio, Mr. KILDEE,
Mr. KIND, Mr. CAPUANO, Mr. GRIJALVA, Mr. MARKEY, Mr. SCOTT of Virginia,
Mr. OLVER, Mr. ALLEN, Mr. ANDREWS, Mr. DELAHUNT, Mrs. JONES of Ohio, Mr.
HIGGINS, Mr. MCINTYRE, Ms. SLAUGHTER, Mrs. MALONEY, Mr. KENNEDY of Rhode
Island, Mr. KUCINICH, Mr. CONYERS, Mr. SIMMONS, Ms. JACKSON-LEE of Texas,
Ms. ZOE LOFGREN of California, Mr. LYNCH, Mr. PAYNE, Mr. GEORGE MILLER of
California, Mr. WYNN, Mr. HONDA, Mrs. MCCARTHY, Mr. MICHAUD, Ms. HOOLEY,
Mr. MCCOTTER, Mr. RUPPERSBERGER, Mr. BROWN of Ohio, Mr. CLEAVER, Mr. FORTENBERRY,
Ms. MATSUI, Mr. HOLT, Mr. BUTTERFIELD, Mr. UDALL of New Mexico, Mr. MCHUGH,
Mr. LIPINSKI, Ms. MILLENDER-MCDONALD, Ms. MOORE of Wisconsin, Mr. FORD,
Mr. MILLER of North Carolina, Mr. VAN HOLLEN, Mr. GUTIERREZ, Mr. CARNAHAN,
Ms. ESHOO, Ms. SCHAKOWSKY, and Mr. LEVIN) introduced the following bill;
which was referred to the Committee on Education and the Workforce
A BILL
To support business incubation in academic settings, 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 AND FINDINGS.
(a) Short Title- This Act may be cited as the `Linking Educators and Developing
Entrepreneurs for Reaching Success (LEADERS) Act'.
(b) Findings- Congress makes the following findings:
(1) Business incubators housed in academic settings provide unique educational
opportunities for students, provide entrepreneurs with enhanced access
to a skilled workforce, and bring a wealth of resources to business, academia,
and communities.
(2) Academic affiliated incubators bridge the missions of academic institutions
by bringing together education, economic development, and technology commercialization
efforts.
(3) Studies have shown that incubator tenant companies have an average
success rate of 87 percent, and 90 percent for technology-based incubator
tenant companies. These success rates are dramatically higher than the
success rates for companies in the general economy.
(4) Incubator companies are also more likely to remain in the same communities
as they grow and to provide high paying jobs and benefits to their employees.
(5) Business incubators help academic institutions contribute to local
goals of sustaining economic development in their surrounding communities.
(6) Education in entrepreneurship and other business formation skills
is essential to business success and sustainable economic development.
SEC. 2. PURPOSE.
The purpose of this Act is to encourage entrepreneurship by increasing the
role for academia in entrepreneurship by providing space and expertise in
an academic setting to house and support new and emerging small businesses.
SEC. 3. DEFINITIONS.
(1) DEGREE-GRANTING INSTITUTION- The term `degree-granting institution'
means an institution of higher education, as defined in section 101 of
the Higher Education Act of 1965 (20 U.S.C. 1001), that awards an associate
or baccalaureate degree.
(2) INCUBATOR- The term `incubator' means an entity affiliated with or
housed in a degree-granting institution that provides space and coordinated
and specialized services to entrepreneurial businesses which meet selected
criteria during the businesses' startup phase, including providing services
such as shared office space and services, access to equipment, access
to telecommunications and technology services, flexible leases, specialized
management assistance, access to financing, and other coordinated business
or technical support services.
(3) SECRETARY- The term `Secretary' means the Secretary of Education.
SEC. 4. PROGRAM AUTHORIZED.
(a) In General- The Secretary is authorized to support the establishment
and development of incubators.
(b) Allocation of Funds- From the amount appropriated under section 9, the
Secretary--
(1) shall use 80 percent of the amount to--
(A) make awards, on a competitive basis, in amounts of $500,000 to $750,000,
to help acquire or renovate space for incubators; and
(B) make awards, on a competitive basis, in amounts of $50,000 to $150,000,
for developing curricula, providing services (including preparing corporate
charters, partnership agreements, and basic contracts, assistance with
patents, trademarks, and copyrights, and technology acquisition services),
or providing programming for entrepreneurs housed in an incubator;
(2) shall use 10 percent of the amount to make awards, on a competitive
basis, in amounts of $50,000 to $150,000, for feasibility studies for
determining the need for or siting of incubators; and
(3) shall use 10 percent for research regarding best practices for incubator
programs, including the development of a benchmarking system based on
uniform measures, and for dissemination of information regarding such
practices.
(c) Contracts- The Secretary is authorized to contract with organizations
with expertise in business incubation practices for the purposes of carrying
out subsection (b)(3).
(d) Recipients- The Secretary shall make an award--
(1) described in subsection (b)(1) to a nonprofit entity that has a strong
affiliation with a degree-granting institution and manages or provides
technical assistance to the degree-granting institution's affiliated incubator,
or if no nonprofit entity manages or provides technical assistance to
the incubator, to the degree-granting institution managing the incubator;
and
(2) described in subsection (b)(2) to a degree-granting institution, or
a nonprofit municipality, city, township, or community development organization.
SEC. 5. USES OF FUNDS.
Funds awarded under section 4(b)(1)(B) may be used for--
(1) curriculum, training, or technical assistance developed by academic
faculty with participation from entrepreneurship experts and local government
leaders;
(2) programming that contributes to a coordinated set of business assistance
tools, such as developing management teams, providing workforce development,
forming strategic alliances, developing capital formation networks, and
developing customized plans to help entrepreneurs meet the challenges
of doing business in their specific communities; and
(3) hiring staff to coordinate the activities described in paragraph (1)
or (2) or for curriculum development.
SEC. 6. APPLICATIONS.
(a) In General- Each entity desiring assistance under this Act shall submit
an application to the Secretary at such time, in such manner, and accompanied
by such information as the Secretary may require.
(b) Contents- Each application shall contain an assurance that the activities
to be assisted--
(1) have the support of the municipality, city, or township in which the
incubator is housed or proposed to be housed; and
(2) are consistent with the local economic development plan or strategic
master plan.
(c) Priority- The Secretary shall give priority to funding applications
under this Act that provide strong educational opportunities to students
in entrepreneurship, and that require significant collaboration between
businesses, academia, and local government and economic development leaders.
(1) IN GENERAL- In addition to applications from other appropriate sources,
the Secretary may give consideration to funding applications under this
Act that support--
(A) the building of new incubators;
(B) incubators located in economically distressed areas;
(C) incubators with successful graduation rates for tenant companies;
(D) incubators that have shown demonstrable economic benefits in their
surrounding communities;
(E) incubators that work with faculty entrepreneurs or university-based
research; or
(F) incubators located in rural, inner-city areas, or Indian reservations
or pueblos where the presence of an incubator may enhance and diversify
the area's economy through expanded technology commercialization.
(2) DEFINITION OF CONSIDERATION- In this subsection, the term `consideration'
does not mean priority.
SEC. 7. MATCHING FUNDS.
Each entity receiving Federal assistance under section 4(b)(1) shall contribute
matching funds, in an amount equal to the amount of Federal assistance received
under this Act, toward the costs of the activities assisted under this Act.
The non-Federal share required under this section may be provided in the
form of in-kind contributions.
SEC. 8. REPORT.
The Secretary, at the end of the third year for which assistance is provided
under this Act, shall prepare and submit to Congress a report that--
(1) describes the most effective or innovative additions to curricula
developed under this Act;
(2) contains a comparison of small business survival rates for small businesses
that started up in incubators versus small businesses that did not so
start;
(3) describes factors leading to any success of incubator businesses;
(4) describes the best role for degree-granting institutions in business
incubation; and
(5) contains a comparison of academic-affiliated incubators of specific
missions and ages supported under this Act with incubators with similar
missions and ages that are not supported under this Act.
SEC. 9. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to carry out this Act $20,000,000
for each of the three fiscal years beginning after the enactment of this
Act.
END
