§950aa–1. Rural Business Incubator Fund
(a) Establishment and use
(1) Establishment
There is established in the Treasury of the United States a revolving fund to be known as the Rural Business Incubator Fund (in this subchapter referred to as the "Incubator Fund") to be administered by the Secretary.
(2) Use
The Incubator Fund shall be used to make grants and reduced interest loans to electric and telephone borrowers under this chapter or to other nonprofit entities that meet the requirements of this section, to promote business incubator programs or for the creation or operation of business incubators in rural areas, and the interest rate on such loans shall not exceed 5 percent.
(3) Business incubator
Any business incubator that receives assistance under this subchapter shall be a facility in which small businesses can share premises, support staff, computers, software, hardware, telecommunications terminal equipment, machinery, janitorial services, utilities, or other overhead expenses, and where such businesses can receive technical assistance, financial advice, business planning services, or other support. Business incubator programs that provide assistance of the type described in this paragraph shall be eligible for assistance under this subchapter even if such programs do not involve the sharing of premises.
(b) Application for assistance
(1) Eligibility to submit
Borrowers under this chapter that operate business incubators or that desire to operate such incubators or business incubator programs, and that meet the requirements established by the Secretary for obtaining grants or reduced interest loans under this section, may submit applications for such grants or loans at such time, in such form, and containing such information as the Secretary shall require. Nonprofit entities that are not borrowers under subchapter III of this chapter shall be considered eligible borrowers for the purpose of this section if such entities are located in a State in which not more than one electric borrower is headquartered in such State.
(2) Requirements
Applications submitted under paragraph (1) shall, at a minimum-
(A) contain an assurance that any incubator established or operated pursuant to this section will be operated on a not-for-profit basis; and
(B) contain an assurance that the policy of such incubator is to encourage and assist businesses in graduating from the incubator and becoming viable business entities in the community and to inform participating businesses of this policy.
(3) Review
In reviewing applications for assistance, the Secretary shall consider-
(A) how effectively the incubator project will assist in the formation, growth, or improved efficiency of small businesses that will help diversify and develop the local economy; and
(B) the amount of local support likely to exist for the incubator and the businesses to be assisted by such incubator, taking into account local contributions of business, financial, technical, technological, or managerial expertise, and contributions of equipment or materials, local financial assistance, and other factors as determined appropriate by the Secretary.
(c) Funding of local incubators
(1) By borrower establishing incubator
(A) In general
A borrower that establishes or assists a business incubator under this section shall purchase Capital Term Certificates issued by the Incubator Fund in amounts equal to 10 percent of the amount of the grant, or 5 percent of the amount of the reduced interest loan, provided by the Secretary under this section.
(B) Redemption of certificates
Each calendar year for the 10-year period beginning on the date that a grant or reduced interest loan is provided under this section, the Secretary shall redeem an amount equal to 10 percent of the Capital Term Certificates purchased by the borrower under subparagraph (A), without any payment of interest.
(2) By the Secretary of the Treasury
The Secretary of the Treasury shall, subject to the limitations contained in annual appropriations Acts, provide funds for the capitalization of the Incubator Fund, and there are authorized to be appropriated for such capitalization not to exceed $10,000,000 annually until the total of such capitalization equals $60,000,000. Such amounts shall remain available until expended by the Incubator Fund for the purposes of this section.
(d) Repayments to Incubator Fund
All payments made on loans under this section, and all amounts provided under subsection (c) of this section, shall be placed in the Incubator Fund established by subsection (a) of this section and shall be available to carry out the purposes of this section.
(e) Full use
The Secretary shall undertake all reasonable efforts to make full use, during each fiscal year, of any funds contained in the Incubator Fund established under subsection (a) of this section, consistent with the requirement that the Incubator Fund redeem Capital Term Certificates as provided by subsection (c) of this section. During each fiscal year, 10 percent of the amount contained in the Incubator Fund shall be made available to nonprofit entities described in subsection (b) of this section that are not borrowers under subchapter III of this chapter, except that if qualified applications from such entities are not received in an amount or at such times sufficient to use such 10 percent amount during any fiscal year, the Secretary shall make the remainder of such amount available to other eligible borrowers during such fiscal year.
(May 20, 1936, ch. 432, title V, §502, as added Nov. 28, 1990,
Amendments
1994-Subsecs. (a)(1), (b)(1), (3), (c)(1), (e).
1991-Subsec. (a)(2).
Section Referred to in Other Sections
This section is referred to in section 950aa of this title.