H.R. 8063

[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.
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