Bill Summary
The "Strengthening Place-based Access, Resources, and Knowledge Act" (SPARK Act) seeks to amend the Small Business Act to enhance entrepreneurial ecosystems in underserved communities, particularly for minority-owned, women-owned, and rural businesses facing significant barriers to capital and support. The legislation establishes the Spark Program, which facilitates cooperative agreements with eligible entities to provide financial assistance for projects benefiting startup and growing small businesses in economically distressed areas.
Key features of the SPARK Act include:
1. **Spark Program**: The program aims to promote economic growth and improve access to capital through partnerships with organizations serving low-income and minority populations, while also providing mentorship and tailored support.
2. **Eligibility and Funding**: The Act outlines eligibility criteria for participants, including individuals with prior imprisonment and businesses with employees from low- to moderate-income communities. It allows for up to $1,000,000 in funding for entities with cooperative agreements and $500,000 for those without.
3. **Application and Use of Funds**: Covered entities must detail their intended use of funds for grants or loans to assist small businesses, with a cap of $20,000 per small business for grants.
4. **Monitoring and Reporting**: The program mandates regular evaluations, annual reports to Congress on funding outcomes, and provisions for training and technical assistance to ensure compliance and effective fund use.
5. **Coordination and Outreach**: The SPARK Act encourages collaboration among various stakeholders and mandates the public promotion of program activities to enhance outreach and engagement.
Overall, the legislation aims to bridge gaps in resources and opportunities for small businesses in marginalized communities, fostering economic development through structured support and accountability mechanisms.
Possible Impacts
1. **Access to Financial Resources for Underserved Entrepreneurs**: The SPARK Act will significantly enhance access to capital for minority-owned, women-owned, and rural businesses by introducing the Spark Program. This initiative provides financial assistance through grants and loans, allowing eligible small businesses in economically distressed areas to secure funding they previously struggled to access. For instance, a woman-owned startup in a low-income neighborhood could receive a grant of up to $20,000 to invest in equipment or marketing, thereby improving its chances of success and job creation.
2. **Support for Disadvantaged Groups through Training and Mentorship**: The legislation emphasizes the importance of tailored support and training for individuals from disadvantaged backgrounds, such as those with prior imprisonment or those living in low- to moderate-income communities. By providing free or low-cost training and technical assistance, the SPARK Act aims to enhance the operational capacity and compliance of these small businesses. For example, a small business owner who has faced barriers to employment may receive mentorship and training that equips them with the skills needed to run a successful venture, ultimately fostering economic growth in their community.
3. **Structured Accountability and Program Evaluation**: The SPARK Act establishes a framework for monitoring and reporting on the effectiveness of funded projects. This includes annual examinations and requirements for covered entities to document the use of funds and the outcomes achieved, such as job creation metrics. As a result, communities will have greater transparency regarding the impact of the resources allocated to small businesses. For example, a local incubator that receives funding under the Spark Financing Program must report on how many jobs were created and how many businesses successfully utilized the grants or loans, providing valuable data that can inform future policies and initiatives.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8063 Introduced in House (IH)]
<DOC>
119th CONGRESS
2d Session
H. R. 8063
To amend the Small Business Act to spur entrepreneurial ecosystems in
underserved communities, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 24, 2026
Ms. Pressley 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, 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 ``Strengthening Place-based Access,
Resources, and Knowledge Act'' or the ``SPARK Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Studies have found that incubators, accelerators, and
other similar models are effective at increasing revenues, the
number of employees, and the likelihood that the business
venture will be successful for participants.
(2) According to the 2023 Report on Startup Firms Owned by
People of Color: Findings from the 2022 Small Business Credit
Survey--
(A) startups owned by racial minorities are more
than twice as likely to be denied for financing from
lenders than non-minority-owned startups; and
(B) mission-oriented financial institutions and
community-based lenders, including minority depository
institutions and community development financial
institutions, are critical in helping minority-owned
businesses access capital.
(3) According to the Kauffman Foundation--
(A) minority-owned and women-owned businesses are
half as likely to have workers than non-minority-owned
and men-owned businesses; and
(B) if minorities started businesses at the same
rate as non-minorities, approximately 9,500,000 jobs
would be added to the economy of the United States.
(4) According to the Center for Rural Innovation--
(A) less than 1 percent of all venture capital
funding goes to businesses located in rural areas;
(B) rural entrepreneurship rates have fallen from
20 percent in the 1980s to just more than 12 percent in
the 2010s; and
(C) financial barriers in rural areas are
especially prominent for minority populations.
(5) According to PitchBook, only 2 percent of all venture
capital funding goes to businesses with women founders.
(6) According to Crunchbase, less than 3 percent of all
venture capital funding goes to businesses with Black and
Hispanic founders.
SEC. 3. PURPOSES.
The purposes of the Spark Program established under section 49 of
the Small Business Act, as amended by this Act, are to--
(1) spur economic growth in underserved communities by
creating good paying jobs and increasing access to capital;
(2) increase prospects for success for small business
concerns in underserved communities, which often suffer from
higher business failure rates than the national average;
(3) create a pipeline for individuals in underserved and
rural markets into small business ownership;
(4) close the gaps that underserved small business concerns
often have in terms of revenue and number of employees, which
represent lost opportunity for the economy of the United
States;
(5) encourage collaboration between the Small Business
Administration and organizations that serve low-income,
minority, and rural communities; and
(6) grow existing incubators and accelerators that are
focused on empowering underserved communities and
entrepreneurs.
SEC. 4. SPARK 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 51; and
(2) by inserting after section 48 (15 U.S.C. 657u) the
following:
``SEC. 49. SPARK PROGRAM.
``(a) Definitions.--In this section:
``(1) Accelerator.--The term `accelerator' means an
organization--
``(A) that--
``(i) works with a startup or growing small
business concern for a predetermined period;
``(ii) provides mentorship and instruction
to scale businesses; and
``(iii) increases the investment readiness
of small business concerns; and
``(B) that may--
``(i) provide, but is not exclusively
designed to provide, seed investment in
exchange for a small amount of equity; and
``(ii) offer startup capital or the
opportunity to raise capital from outside
investors.
``(2) Eligible entity.--
``(A) In general.--The term `eligible entity' means
an organization operating, or planning to operate--
``(i) an accelerator;
``(ii) an incubator; or
``(iii) any other small business
innovation-focused project, as approved by the
Administrator.
``(B) Inclusions.--The term `eligible entity'
includes any of the following, if the organization is
as described in subparagraph (A):
``(i) An organization described in section
501(c)(3) of the Internal Revenue Code of 1986.
``(ii) A community development financial
institution, as defined in section 103 of the
Community Development Banking and Financial
Institutions Act of 1994 (12 U.S.C. 4702).
``(iii) A minority depository institution,
as defined in section 308(b) of the Financial
Institutions Reform, Recovery, and Enforcement
Act of 1989 (12 U.S.C. 1463 note).
``(iv) A lender under the program
established under section 7(m).
``(v) A development company that is
certified under title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.).
``(vi) A Community Advantage Small Business
Lending Company, as defined in section 120.10
of title 13, Code of Federal Regulations, or
any successor regulation.
``(vii) An institution described in any of
paragraphs (1) through (7) of section 371(a) of
the Higher Education Act of 1965 (20 U.S.C.
1067q(a)).
``(viii) A junior or community college, as
defined in section 312 of the Higher Education
Act of 1965 (20 U.S.C. 1058).
``(3) Federally recognized area of economic distress.--The
term `federally recognized area of economic distress' means--
``(A) a HUBZone, as that term is defined in section
31(b);
``(B) an area that has been designated as--
``(i) an empowerment zone or enterprise
community under section 1391 of the Internal
Revenue Code of 1986;
``(ii) a Promise Zone by the Secretary of
Housing and Urban Development; or
``(iii) a low-income neighborhood or
moderate-income neighborhood for purposes of
the Community Reinvestment Act of 1977 (12
U.S.C. 2901 et seq.); or
``(C) any area for which a disaster declaration or
determination described in subparagraph (A), (B), (C),
or (E) of section 7(b)(2) has been made that has not
terminated more than 2 years before the date on which
an eligible entity enters into a cooperative agreement
with the Administration under this section with respect
to the area (or later, as determined by the
Administrator), except that, in the case of a major
disaster described in subparagraph (A) of section
7(b)(2), that period shall be 5 years.
``(4) Growing; newly established; startup.--The terms
`growing', `newly established', and `startup', with respect to
a small business concern, mean growing, newly established, and
startup, respectively, within the meanings given those terms
under section 7(m).
``(5) Incubator.--The term `incubator' means an
organization--
``(A) that--
``(i) tends to work with startup and newly
established small business concerns; and
``(ii) provides mentorship to startup and
newly established small business concerns; and
``(B) that may--
``(i) provide a co-working environment or a
month-to-month lease program; and
``(ii) work with startups or newly
established small business concerns for a
predetermined period or an open-ended period.
``(6) Individuals with a disability.--The term `individuals
with a disability' means more than 1 individual with a
disability, as defined in section 3 of the Americans with
Disabilities Act of 1990 (42 U.S.C. 12102).
``(7) Rural area.--The term `rural area' has the meaning
given the term in section 7(m)(11).
``(8) Socially and economically disadvantaged individual.--
The term `socially and economically disadvantaged individual'
means a socially and economically disadvantaged individual
within the meaning given that term in section 8(d)(3)(C).
``(b) Establishment.--Not later than 1 year after the date of
enactment of the Strengthening Place-based Access, Resources, and
Knowledge Act, the Administrator shall develop and begin implementing a
program (to be known as the `Spark Program') to enter into cooperative
agreements with eligible entities under this section.
``(c) Authority.--
``(1) In general.--The Administrator may--
``(A) with respect to eligible entities that have
submitted applications for such purpose, enter into
cooperative agreements to provide financial assistance
to those eligible entities to conduct 5-year projects
for the benefit of startup, newly established, or
growing small business concerns, which may include
cooperatives and community land trusts; and
``(B) renew a cooperative agreement entered into
under this section for additional 3-year periods, in
accordance with paragraph (3).
``(2) Project requirements.--A project conducted under a
cooperative agreement under this section shall--
``(A) be carried out in such locations as to
provide maximum accessibility and benefits to the small
business concerns that the project is intended to
serve;
``(B) have a full-time staff, including a full-time
director who shall--
``(i) have the authority to make
expenditures under the budget of the project;
and
``(ii) manage the activities carried out
under the project;
``(C) include the joint provision of programs and
services by the eligible entity and the Administration,
which--
``(i) shall be jointly developed,
negotiated, and agreed upon, with full
participation of both parties, pursuant to an
executed cooperative agreement between the
eligible entity and the Administration; and
``(ii) shall include--
``(I) one-to-one individual
counseling, as described in section
21(c)(3)(A); and
``(II) a formal, structured
mentorship program;
``(D) incorporate continuous upgrades and
modifications to the services and programs offered
under the project, as needed to meet the changing and
evolving needs of the business community;
``(E) involve working with underserved groups,
which include--
``(i) women;
``(ii) socially and economically
disadvantaged individuals;
``(iii) veterans or spouses of veterans;
``(iv) individuals with disabilities;
``(v) small business concerns located in
rural areas, including startup, newly
established, or growing small business concerns
located in rural areas;
``(vi) members of an Indian Tribe
individually identified (including
parenthetically) in the most recent list
published pursuant to section 104 of the
Federally Recognized Indian Tribe List Act of
1994 (25 U.S.C. 5131);
``(vii) individuals who have completed a
term of imprisonment in a Federal, State, or
local jail or prison; or
``(viii) small business concerns, if not
less than 50 percent of the employees of the
small business concern reside in a low- or
moderate-income community;
``(F) not impose or otherwise collect a fee or
other compensation in connection with participation in
the programs and services described in subparagraph
(C)(ii); and
``(G) ensure that small business concerns
participating in the project have access, including
through resource partners, to information concerning
Federal, State, and local regulations that affect small
business concerns.
``(3) Continued funding.--
``(A) In general.--An eligible entity that enters
into an initial cooperative agreement, or a renewal of
a cooperative agreement, under paragraph (1) may submit
an application for a 3-year renewal of the cooperative
agreement at such time, in such manner, and accompanied
by such information as the Administrator may establish.
``(B) Application and approval criteria.--
``(i) Criteria.--The Administrator shall
develop and publish criteria for the
consideration and approval of applications for
renewals of cooperative agreements by eligible
entities under this paragraph, which shall take
into account the structure and the stated goals
of the project.
``(ii) Notification.--Not later than 60
days after the date of the deadline to submit
applications for each fiscal year, the
Administrator shall approve or deny any
application under this paragraph and notify the
applicant for each such application.
``(C) Priority.--In allocating funds made available
for cooperative agreements under this section, the
Administrator shall give applications under this
paragraph priority over first-time applications for
cooperative agreements under paragraph (1)(A).
``(4) Scope of authority.--
``(A) Subject to appropriations.--The authority of
the Administrator to enter into cooperative agreements
under this section shall be in effect for each fiscal
year only to the extent and in the amounts as are
provided in advance in appropriations Acts.
``(B) Suspension, termination, and failure to renew
or extend.--After the Administrator has entered into a
cooperative agreement with an eligible entity under
this section, the Administrator may not suspend,
terminate, or fail to renew or extend the cooperative
agreement unless the Administrator provides the
eligible entity with written notification setting forth
the reasons for that suspension, termination, or
failure and affords the eligible entity an opportunity
for a hearing, appeal, or other administrative
proceeding under chapter 5 of title 5, United States
Code.
``(5) Limitation on use of funds.--An eligible entity that
has entered into a cooperative agreement under this section may
not use any portion of the financial assistance provided under
that cooperative agreement to directly provide capital to any
participant in any project that is funded with that financial
assistance.
``(d) Criteria.--
``(1) In general.--The Administrator shall--
``(A) establish and evaluate in terms of relative
importance the criteria the Administrator shall use in
awarding cooperative agreements under this section,
which shall include--
``(i) whether the proposed project will be
located in--
``(I) a federally recognized area
of economic distress;
``(II) a rural area; or
``(III) an area lacking sufficient
entrepreneurial development resources,
as determined by the Administrator;
``(ii) whether the proposed project
demonstrates a commitment, and details a
specific plan, to partner with core
stakeholders working with small business
concerns in the relevant area, including--
``(I) investment and lending
organizations;
``(II) nongovernmental
organizations;
``(III) programs of State and local
governments that are concerned with
aiding small business concerns;
``(IV) Federal agencies, including
the Minority Business Development
Agency of the Department of Commerce;
and
``(V) for-profit organizations with
an expertise in small business
innovation;
``(iii) whether the proposed project will
serve underserved groups described in
subsection (c)(2)(E);
``(iv) whether the proposed project is a
local, place-based initiative that seeks to
engage local communities and consumers; and
``(v) whether the proposed project will
provide or connect small business concerns with
investment, grant-making, or procurement
opportunities;
``(B) make publicly available, including on the
website of the Administration, and state in each
solicitation for applications for cooperative
agreements under this section, the selection criteria
and ranking established under subparagraph (A); and
``(C) evaluate applicants for cooperative
agreements under this section in accordance with the
selection criteria and ranking established under
subparagraph (A).
``(2) Contents.--The selection criteria established under
paragraph (1)(A) shall consider--
``(A) the record of the applicable eligible entity
in assisting growing, newly established, and startup
small business concerns, including, for each of the 3
full years before the date on which the eligible entity
applies for a cooperative agreement under this section
(or, if the eligible entity has been in operation for
less than 3 years, for the most recent full year the
eligible entity was in operation)--
``(i) the number and retention rate of
growing, newly established, and startup
business concerns in the program of the
eligible entity;
``(ii) the average period of participation
by growing, newly established, and startup
small business concerns in the program of the
eligible entity;
``(iii) the total and median capital raised
by growing, newly established, and startup
small business concerns participating in the
program of the eligible entity;
``(iv) the number of investments, grants,
or loans received by growing, newly
established, and startup small business
concerns participating in the program of the
eligible entity; and
``(v) the total and median number of
employees of growing, newly established, and
startup small business concerns participating
in the program of the eligible entity;
``(B) the structure and goals of the applicable
project;
``(C) ties that the applicable eligible entity has
to the business community;
``(D) the resources available for the applicable
project;
``(E) the capabilities of the applicable project,
including coordination with local resource partners and
local or national lending partners of the
Administration;
``(F) the unique business and economic challenges
faced by the community in which the applicable eligible
entity is located and businesses in that community;
``(G) the proposed budget and plan for use of
funds; and
``(H) any other criteria determined appropriate by
the Administrator.
``(e) Program Examination.--
``(1) In general.--The Administrator shall--
``(A) develop and implement an annual programmatic
and financial examination of each project carried out
with financial assistance provided under this section,
under which each eligible entity entering into a
cooperative agreement under this section shall provide
to the Administrator--
``(i) an itemized cost breakdown of actual
expenditures for costs incurred during the
preceding year; and
``(ii) documentation regarding the amount
of assistance from non-Federal sources obtained
and expended by the eligible entity during the
preceding year; and
``(B) analyze the results of each examination
conducted under subparagraph (A) and, based on that
analysis, make a determination regarding the
programmatic and financial viability of each eligible
entity.
``(2) Conditions for continued funding.--In determining
whether to continue or renew a cooperative agreement under this
section, the Administrator--
``(A) shall consider the results of the most recent
examination of the applicable project under paragraph
(1); and
``(B) may terminate or not renew a cooperative
agreement, if--
``(i) the Administrator determines that the
applicable eligible entity has failed to
provide information required to be provided
(including information provided for purpose of
the annual report by the Administrator under
subsection (l)); or
``(ii) the information provided by the
applicable eligible entity is inadequate.
``(3) Study and report.--Not later than 2 years after the
date of enactment of the Strengthening Place-based Access,
Resources, and Knowledge Act, the Administrator shall--
``(A) conduct a study to determine whether the
program examination criteria under this subsection and
the reporting requirements under subsection (l) should
vary or include other metrics based on the type and
location of a project; and
``(B) submit to Congress a report detailing the
results of the study conducted under subparagraph (A).
``(f) Training and Technical Assistance.--The Administrator--
``(1) shall provide in-person or online training and
technical assistance to each eligible entity entering into a
cooperative agreement under this section at the beginning of
the participation of the eligible entity in the Spark Program
in order to build the capacity of the eligible entity and
ensure compliance with procedures established by the
Administrator;
``(2) shall ensure that the training and technical
assistance described in paragraph (1) is provided at no cost or
at a low cost; and
``(3) may enter into a contract to provide the training or
technical assistance described in paragraph (1) with 1 or more
organizations with expertise in the entrepreneurial development
programs of the Administration, innovation, and entrepreneurial
development.
``(g) Coordination.--In carrying out a project with financial
assistance provided under this section, an eligible entity may
coordinate with--
``(1) resource and lending partners of the Administration;
``(2) programs of State and local governments that are
concerned with aiding small business concerns; and
``(3) other Federal agencies, including to provide services
to and assist small business concerns in participating in the
SBIR and STTR programs, as defined in section 9(e).
``(h) Funding Limit.--The amount of financial assistance provided
to an eligible entity under a cooperative agreement entered into under
this section shall be not less than $500,000 during each year.
``(i) Contract Authority.--
``(1) In general.--An eligible entity that has entered into
a cooperative agreement under this section may enter into a
contract with a Federal department or agency to provide
specific assistance to startup, newly established, or growing
small business concerns.
``(2) Performance.--Performance of a contract entered into
under paragraph (1) may not hinder the eligible entity in
carrying out the terms of the cooperative agreement under this
section.
``(3) Additional provision.--Notwithstanding any other
provision of law, a contract for assistance under paragraph (1)
shall not be applied to any Federal department or agency's
small business, woman-owned business, or socially and
economically disadvantaged business contracting goal under
section 15(g).
``(j) Privacy Requirements.--
``(1) In general.--An eligible entity may not disclose the
name, address, or telephone number of any individual or small
business concern receiving assistance under this section
without the consent of that individual or small business
concern, unless--
``(A) the Administrator is ordered to make such a
disclosure by a court in any civil or criminal
enforcement action initiated by a Federal or State
agency; or
``(B) the Administrator considers such a disclosure
to be necessary for the purpose of conducting a
financial audit of an eligible entity, except that a
disclosure under this subparagraph shall be limited to
the information necessary for that audit.
``(2) Administration use of information.--This subsection
shall not--
``(A) restrict Administration access to program
activity data; or
``(B) prevent the Administration from using client
information (other than the information described in
subparagraph (A)) to conduct client surveys.
``(3) Regulations.--The Administrator shall issue
regulations to establish standards for requiring disclosures
during a financial audit under paragraph (1)(B).
``(k) Publication of Information.--The Administrator shall--
``(1) publish information about the program carried out
under this section online, including--
``(A) on the website of the Administration; and
``(B) on the social media of the Administration;
and
``(2) request that the resource and lending partners of the
Administration and the district offices of the Administration
publicize the program carried out under this section.
``(l) Annual Reporting.--Not later than 1 year after the date on
which the Administrator establishes the program under this section, and
annually thereafter, the Administrator shall submit to Congress a
report on the activities under the program, including--
``(1) the number of startup, newly established, and growing
small business concerns participating in the project carried
out by each eligible entity under a cooperative agreement
entered into under this section (referred to in this subsection
as `participants'), including a breakdown of the owners of the
participants by race, gender, veteran status, and urban versus
rural location;
``(2) the retention rate for participants;
``(3) the total and median amount of capital accessed by
participants, including the type of capital accessed;
``(4) the total and median number of employees of
participants;
``(5) the number and median wage of jobs created by
participants;
``(6) the number of jobs sustained by participants; and
``(7) information regarding such other metrics as the
Administrator determines appropriate, including coordination
with other private or public small business assistance
programs.
``(m) Funding.--
``(1) Authorization of appropriations.--There are
authorized to be appropriated such sums as may be necessary to
carry out this section.
``(2) Administrative expenses.--Of the amount made
available to carry out this section for any fiscal year, not
more than 10 percent may be used by the Administrator for
administrative expenses.''.
SEC. 5. SPARK FINANCING PROGRAM.
The Small Business Act (15 U.S.C. 631 et seq.), as amended by
section 4, is amended by inserting after section 49 the following:
``SEC. 50. SPARK FINANCING PROGRAM.
``(a) Definitions.--In this section:
``(1) Covered entity.--The term `covered entity' means--
``(A) an eligible entity; or
``(B) solely for the purposes of making loans under
subsection (c)(3)(A)(ii), another lender or
organization determined appropriate by the
Administrator.
``(2) Covered small business concern.--The term `covered
small business concern' means a small business concern that
is--
``(A) owned by an individual that is a member of an
underserved group described in section 49(c)(2)(E); or
``(B) located in a federally recognized area of
economic distress.
``(3) Eligible entity; federally recognized area of
economic distress; growing; newly established; startup.--The
terms `eligible entity', `federally recognized area of economic
distress', `growing', `newly established', and `startup' have
the meanings given those terms in section 49(a).
``(b) Establishment of Program.--Not later than 1 year after the
date of enactment of the Strengthening Place-based Access, Resources,
and Knowledge Act, the Administrator shall establish, and thereafter
the Administrator shall carry out, a grant and loan program (to be
known as the `Spark Financing Program'), under which, in accordance
with the requirements of this section, the Administrator shall provide
financial assistance to covered entities, which shall use that
financial assistance to make grants or loans to covered small business
concerns.
``(c) Financial Assistance to Eligible Entities.--
``(1) In general.--The Administrator shall provide
financial assistance to covered entities under this section as
follows:
``(A) If the covered entity has entered into a
cooperative agreement under section 49--
``(i) the amount of financial assistance
provided under this section shall be not more
than $1,000,000 per year; and
``(ii) the entity--
``(I) shall receive financial
assistance under this section at the
same time that the covered entity
receives financial assistance pursuant
to that cooperative agreement under
section 49; and
``(II) shall not be required to
reapply for funding under this section
on an annual basis.
``(B) If the covered entity has not entered into a
cooperative agreement under section 49--
``(i) the amount of financial assistance
provided under this section shall be not more
than $500,000 per year; and
``(ii) the covered entity shall reapply for
financial assistance under this section on an
annual basis.
``(2) Application.--
``(A) In general.--A covered entity seeking
financial assistance under this section--
``(i) may, if the covered entity seeks to
enter into or renew a cooperative agreement
under section 49, seek that financial
assistance in an application submitted by the
covered entity with respect to entering into or
renewing that cooperative agreement, as
applicable; or
``(ii) if the covered entity does not seek
to enter into a, or is not seeking to renew an
existing, cooperative agreement under section
49, shall submit to the Administrator an
application seeking that financial assistance.
``(B) Contents.--With respect to an application
seeking financial assistance under this section,
whether or not submitted as part of an application
under section 49--
``(i) the application shall detail the
proposed use of the financial assistance, as
provided under paragraph (3); and
``(ii) the Administrator shall evaluate the
application using the criteria described in
paragraphs (1) and (2) of section 49(d), except
that, for purposes of this clause, any
reference in such paragraph (1) or (2) to a
cooperative agreement under section 49 shall be
deemed to be a reference to financial
assistance provided under this section.
``(3) Uses of financial assistance.--
``(A) In general.--
``(i) Grants.--
``(I) In general.--Subject to
clause (ii), an eligible entity to
which financial assistance is provided
under this section may use that
financial assistance to make grants to
covered small business concerns to
carry out projects that are directed at
the objectives described in section
501(d) of the Small Business Investment
Act of 1958 (15 U.S.C. 695(d)).
``(II) Limitation.--A covered small
business concern may not receive more
than $20,000, in total, in grants made
under subclause (I).
``(ii) Loans.--An eligible entity described
in any of clauses (ii) through (vi) of section
49(a)(2)(B), or another lender or organization
determined appropriate by the Administrator,
may use financial assistance provided under
this section to make a loan to a covered small
business concern with a significantly lower
interest rate than is typical, or with a
required equity contribution that is lower than
is typical, in order to--
``(I) reduce the number of loan
applications that are denied because of
insufficient collateral;
``(II) decrease the cost of
financing for covered small business
concerns;
``(III) increase the number of
covered small business concerns that
qualify for financing, in light of--
``(aa) the difficulties
faced by covered small business
concerns in accessing
conventional financing; and
``(bb) the historical
exclusion of covered small
business concerns from credit
markets;
``(IV) bring more lenders into
areas that suffer from under-
investment; and
``(V) bridge public and private
financing programs to provide covered
small business concerns with a
continuum of support.
``(B) No fee or compensation required.--A covered
small business concern that receives a grant or loan
made under subparagraph (A) shall not be required to
pay a fee, or to otherwise pay any compensation, to the
applicable covered entity with respect to that grant or
loan.
``(4) Verification.--A covered entity that makes a grant or
loan to a covered small business concern using financial
assistance provided to the covered entity under this section
shall verify the legitimacy of that covered small business
concern, which may include collecting the following information
from the covered small business concern:
``(A) A description of the history of the covered
small business concern and the nature of the business
of the covered small business concern.
``(B) The amount and purpose of the grant or loan.
``(C) The most recent financial statements of the
covered small business concern.
``(D) Past financial statements or tax returns of
the covered small business concern, as determined
appropriate by the Administrator.
``(E) The tax verification described in section
120.191 of title 13, Code of Federal Regulations, or
any successor regulation.
``(F) A business plan provided by the small
business concern.
``(G) Any other material determined appropriate by
the Administrator.
``(d) Program Examination.--
``(1) In general.--The Administrator shall--
``(A) develop and implement an examination of the
grants and loans made with financial assistance
provided under this section, under which each covered
entity to which financial assistance is provided under
this section shall provide to the Administrator--
``(i) documentation establishing metrics to
measure success on the use of that financial
assistance and detailing whether that use
satisfied those metrics;
``(ii) if the covered entity has made loans
with financial assistance provided under this
section, default rates for those loans;
``(iii) if the covered entity has made
grants with financial assistance provided under
this section, failure rates of the covered
small business concerns to which those grants
were made; and
``(iv) any other documentation that the
Administrator may require; and
``(B) analyze the results of the examination
conducted under subparagraph (A).
``(2) Use of examination.--In determining whether a covered
entity described in subsection (c)(1)(A) shall continue to
receive financial assistance under this section concurrent with
the provision of financial assistance pursuant to a cooperative
agreement under section 49, or whether to approve a re-
application for financial assistance provided under this
section that is submitted by a covered entity described in
subsection (c)(1)(B)(ii), the Administrator--
``(A) shall consider the results of the most recent
examination conducted under paragraph (1); and
``(B) may withdraw financial assistance provided
under this section, or reject such a re-application,
if--
``(i) the Administrator determines that the
applicable covered entity has failed to provide
information required to be provided (including
information provided for purpose of the annual
report by the Administrator under subsection
(h)); or
``(ii) the information provided by the
applicable covered entity is inadequate.
``(3) Study and report.--Not later than 2 years after the
date of enactment of the Strengthening Place-based Access,
Resources, and Knowledge Act, the Administrator shall--
``(A) conduct a study to determine whether the
program examination criteria under this subsection and
the reporting requirements under subsection (h) should
vary or include other metrics based on the type and
location of a project; and
``(B) submit to Congress a report detailing the
results of the study conducted under subparagraph (A).
``(e) Training and Technical Assistance.--The Administrator--
``(1) shall provide in-person or online training and
technical assistance to each covered entity to which financial
assistance is provided under this section at the beginning of
the participation of the covered entity in the program
established under this section in order to build the capacity
of the covered entity and ensure compliance with procedures
established by the Administrator;
``(2) shall ensure that the training and technical
assistance described in paragraph (1) is provided at no cost or
at a low cost; and
``(3) may enter into a contract to provide the training or
technical assistance described in paragraph (1) with 1 or more
organizations with expertise in the entrepreneurial development
programs of the Administration, innovation, and entrepreneurial
development.
``(f) Coordination.--In making a grant or loan with financial
assistance provided under this section, a covered entity may coordinate
with--
``(1) resource and lending partners of the Administration;
``(2) programs of State and local governments that are
concerned with aiding small business concerns; and
``(3) other Federal agencies, including to provide services
to and assist small business concerns in participating in the
SBIR and STTR programs, as defined in section 9(e).
``(g) Publication of Information.--The Administrator shall--
``(1) publish information about the program carried out
under this section online, including--
``(A) on the website of the Administration; and
``(B) on the social media of the Administration;
and
``(2) request that the resource and lending partners of the
Administration and the district offices of the Administration
publicize the program carried out under this section.
``(h) Annual Reporting.--Not later than 1 year after the date on
which the Administrator establishes the program under this section, and
annually thereafter, the Administrator shall submit to Congress a
report on the activities under the program, including--
``(1) the number of grants and loans made using the
financial assistance provided under this section;
``(2) the use of the funds from grants and loans described
in subparagraph (A);
``(3) the amount of financial assistance provided under
this section that was expended for each job created or retained
through the expenditure of that financial assistance;
``(4) the number of startup, newly established, and growing
covered small business concerns to which grants and loans have
been made using financial assistance provided under this
section (referred to in this subsection as `participants'),
including a breakdown of the owners of the participants by
race, gender, veteran status, and urban versus rural location;
``(5) the retention rate for participants;
``(6) the total and median amount of capital accessed by
participants, including the type of capital accessed;
``(7) the total and median number of employees of
participants;
``(8) the number and median wage of jobs created by
participants;
``(9) the number of jobs sustained by participants; and
``(10) information regarding such other metrics as the
Administrator determines appropriate, including coordination
with other private or public small business assistance
programs.
``(i) Funding.--
``(1) Authorization of appropriations.--There are
authorized to be appropriated such sums as may be necessary to
carry out this section.
``(2) Administrative expenses.--Of the amount made
available to carry out this section for any fiscal year, not
more than 10 percent may be used by the Administrator for
administrative expenses.''.
SEC. 6. REGULATIONS.
Not later than 1 year after the date of enactment of this Act, the
Administrator of the Small Business Administration shall promulgate
regulations to carry out sections 49 and 50 of the Small Business Act,
as amended by this Act, which shall include procedures to--
(1) verify the proper use of financial assistance provided
under each such section, including a grant or loan made under
such section 50 with financial assistance provided under that
section; and
(2) establish clawback provisions for any instance of fraud
committed with respect to any financial assistance, or any
grant or loan, described in paragraph (1) of this section.
<all>