Mr. President, in addition to introducing a bill to reauthorize the Small Business Investment Company, SBIC, program, Senator Snowe and I are introducing a bill to extend the New Markets Venture Capital, NMVC, program. The Securing Equity for the Economic Development of Low Income Areas Act of 2007, or the SEED Act, is important to states like Massachusetts and Maine.

Both of our States are home to pioneers in the field of development venture capital, which uses the discipline of traditional venture investing to focus on economic development in low-income areas. We know the benefits of this type of investment and believe the model should be expanded to other parts of the country.

Our support is not new. In my case, I was the sponsor of the Community Development and Venture Capital Act of 1999, which created the New Markets Venture Capital program. Its purpose was to stimulate economic development through public-private partnerships that invest venture capital in smaller businesses located in impoverished rural and urban areas or that employ low-income people.

Both innovative and fiscally sound, this program was built on two of the Small Business Administration’s most popular programs. It developed a financial structure similar to that of the successful Small Business Investment Company, SBIC, program, mentioned earlier, while also incorporating a technical assistance component similar to that of SBA’s micro loan program.

However, unlike the SBIC program, which focuses on small businesses with high-growth potential, the New Markets Venture Capital program focuses on small businesses that show promise of both financial and social returns—what is referred to as a “double bottom line.” These businesses have special needs, and they tend to want intensive, ongoing financial, management and marketing assistance, be higher risk, and need longer periods to pay back money than SBIC investments. However, they more than balance out the equation by providing good, stable jobs and creating wealth in our neediest communities.

Unfortunately, the program expired in 2006, and it has been operating under temporary authority since then. The SEED Act seeks to reauthorize, expand, and improve this important program.

First, the bill will reauthorize the program for the next 3 years until 2010, making it possible for the SBA to license up to 20 more New Markets Venture Capital funds. Those funds will have the potential to invest $250 million in small businesses in low-income areas, by leveraging $150 million in debentures. Building on experiences with this program and the Rural Business Investment Company Program, which proved the matching requirement unreasonable and inefficient, the bill changes the operational assistance grants so that firms can get up to $1 million in funding in order to provide the companies they invest in with management assistance services. This support is absolutely necessary to make their business a success. Also important to making future funds successful, we have clarified that new markets venture capital companies have two years to raise their private capital. The committee has been troubled by the Agency’s interpretation of the NMVC statute, which they viewed as giving SBA the authority to choose how much time it can give conditionally approved NMVCs to raise private-sector matching money. The chosen time frames were unreasonable and not what Congress intended. This bill clarifies that they get the full 2 years to raise the money. The bill also establishes an office of new markets venture capital so that there are resources devoted to its management and oversight, something lacking in past years. And to try to expand the reach of development capital in other parts of the country, the bill requires the SBA, to the extent practicable, to try and license funds in each of the Agency’s ten regions, so that there is diversity. And it requires the SBA, to the extent practicable, to try and license a fund that focuses on investments in small manufacturers, as a way to help stem the loss of manufacturing in this country.

On behalf of the Nation’s small businesses and entrepreneurs, I urge my colleagues to support this important legislation. Mr. President, I ask that the bill be printed in the Record.