[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1594 Introduced in Senate (IS)]







106th CONGRESS
  1st Session
                                S. 1594

 To amend the Small Business Act and Small Business Investment Act of 
                                 1958.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 16, 1999

Mr. Kerry (for himself, Mr. Wellstone, Mr. Bingaman, Mr. Sarbanes, Mr. 
 Levin, and Mr. Cleland) introduced the following bill; which was read 
         twice and referred to the Committee on Small Business

_______________________________________________________________________

                                 A BILL


 
 To amend the Small Business Act and Small Business Investment Act of 
                                 1958.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Community 
Development and Venture Capital Act of 1999''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
              TITLE I--NEW MARKETS VENTURE CAPITAL PROGRAM

Sec. 101. New Markets Venture Capital Program.
Sec. 102. Bankruptcy exemption for NMVC companies.
Sec. 103. Federal savings associations.
       TITLE II--COMMUNITY DEVELOPMENT VENTURE CAPITAL ASSISTANCE

Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Community development venture capital activities.
                        TITLE III--BUSINESS LINC

Sec. 301. Grants authorized.
Sec. 302. Regulations.

              TITLE I--NEW MARKETS VENTURE CAPITAL PROGRAM

SEC. 101. NEW MARKETS VENTURE CAPITAL PROGRAM.

    (a) In General.--Title III of the Small Business Investment Act of 
1958 (15 U.S.C. 661 et seq.) is amended--
            (1) by striking the title designation and heading and 
        inserting the following:

               ``TITLE III--INVESTMENT DIVISION PROGRAMS

            ``PART A--SMALL BUSINESS INVESTMENT COMPANIES'';

        and
            (2) by adding at the end the following:

             ``PART B--NEW MARKETS VENTURE CAPITAL PROGRAM

``SEC. 351. DEFINITIONS.

    ``In this part--
            ``(1) the term `eligible company' means a company that--
                    ``(A) is a newly formed for-profit entity, which 
                may be a newly formed for-profit subsidiary of an 
                existing entity; and
                    ``(B) has a management team with experience in 
                community development financing or relevant venture 
                capital financing;
            ``(2) the term `low-income individual' means an individual 
        whose income (adjusted for family size) does not exceed--
                    ``(A) for metropolitan areas, 80 percent of the 
                area median income; and
                    ``(B) for nonmetropolitan areas, the greater of--
                            ``(i) 80 percent of the area median income; 
                        or
                            ``(ii) 80 percent of the statewide 
                        nonmetropolitan area median income;
            ``(3) the term `low- or moderate-income geography' means--
                    ``(A) any population census tract (or in the case 
                of an area that is not tracted for population census 
                tracts, the equivalent county division, as defined by 
                the Bureau of the Census of the Department of Commerce 
                for purposes of defining poverty areas) if--
                            ``(i) the poverty rate for such census 
                        tract is not less than 20 percent; or
                            ``(ii)(I) in the case of a tract located 
                        within a metropolitan area, the median family 
                        income for such tract does not exceed the 
                        greater of 80 percent of the statewide median 
                        family income or 80 percent of the metropolitan 
                        area median family income; or
                            ``(II) in the case of a tract not located 
                        within a metropolitan area, the median family 
                        income for such tract does not exceed 80 
                        percent of the statewide median family income; 
                        or
                    ``(B) any area located within--
                            ``(i) a HUBZone (as defined in section 3(p) 
                        of the Small Business Act and the implementing 
                        regulations issued under that section);
                            ``(ii) an urban empowerment zone or urban 
                        enterprise community (as designated by the 
                        Secretary of Housing and Urban Development); or
                            ``(iii) a rural empowerment zone or rural 
                        enterprise community (as designated by the 
                        Secretary of Agriculture);
            ``(4) the terms `new markets venture capital company' and 
        `NMVC company' mean a company that has been designated as a new 
        markets venture capital company by the Administrator under 
        section 354(d);
            ``(5) the term `participation agreement' means an agreement 
        between the Administrator and an NMVC company that furthers the 
        purposes set forth in section 352, detailing the operating plan 
        and investment criteria of the company and requiring that not 
        less than 80 percent of the investments of the company be made 
        in smaller enterprises--
                    ``(A) that are located in 1 or more low- or 
                moderate-income geographies or 1 or more targeted 
                population areas; or
                    ``(B) not less than 35 percent of the employees of 
                which--
                            ``(i) reside or will reside in a low- or 
                        moderate-income geography or a targeted 
                        population area; or
                            ``(ii) are or will be low-income 
                        individuals;
            ``(6) the term `targeted population' means an identifiable 
        group of individuals, including an Indian tribe, as determined 
        by the Administrator, who are low-income individuals; and
            ``(7) the term `targeted population area' means an 
        identifiable geographic area, as determined by the 
        Administrator, containing a concentration of 1 or more targeted 
        populations.

``SEC. 352. PURPOSES.

    ``The purposes of this part are--
            ``(1) to encourage venture capital investment in smaller 
        enterprises located within urban and rural areas;
            ``(2) to promote the creation of wealth, economic 
        development, and job opportunities in low- and moderate-income 
        geographies and for targeted populations; and
            ``(3) to establish a venture capital program, which shall 
        be administered by the Administrator--
                    ``(A) to make grants to NMVC companies for the 
                purpose of providing marketing, management, and 
                technical assistance to smaller enterprises financed, 
                or expected to be financed, by such companies; and
                    ``(B) to guarantee debentures issued by NMVC 
                companies to enable such companies to make venture 
                capital investments in smaller enterprises within urban 
                and rural areas.

``SEC. 353. PROGRAM ESTABLISHMENT.

    ``There is established a New Markets Venture Capital Program, under 
which the Administrator is authorized to--
            ``(1) make grants to NMVC companies, as provided in section 
        355; and
            ``(2) guarantee debentures issued by NMVC companies, as 
        provided in section 356.

``SEC. 354. APPROVAL OF NMVC COMPANIES.

    ``(a) Applications.--In order to be eligible to participate in the 
program under this part as an NMVC company, an eligible company shall 
submit to the Administrator an application, within such period of time 
as the Administrator shall establish, which shall include--
            ``(1) a business plan that describes the manner and 
        geographic areas in which the applicant will make successful 
        venture capital investments in smaller enterprises described in 
        subparagraphs (A) and (B) of section 351(5) and provide 
        marketing, management, and technical assistance to those 
        enterprises;
            ``(2) the qualifications and general business reputation of 
        the management of the applicant, specifically addressing--
                    ``(A) the experience of the management in making 
                venture capital investments in smaller enterprises 
                described in subparagraphs (A) and (B) of section 
                351(5); and
                    ``(B) the success of those investments in terms of 
                business growth, jobs created, and such other factors 
                as the Administrator may require; and
            ``(3) a description of the manner in which the applicant 
        will interface with community organizations;
            ``(4) a proposal describing the manner in which grant 
        amounts made available under this part would provide marketing, 
        management, and technical assistance to smaller enterprises 
        expected to be financed by the applicant;
            ``(5) proposed criteria by which to evaluate the 
        performance of the applicant in meeting program objectives;
            ``(6) the management and financial strength of any parent 
        or affiliated firm, or any firm essential to the success of the 
        business plan of the applicant; and
            ``(7) such other information as the Administrator may 
        require.
    ``(b) Criteria for Conditional Approval.--Upon receipt of an 
application submitted under subsection (a), the Administrator shall 
review the application and make a determination regarding whether to 
grant conditional approval to the applicant to operate as an NMVC 
company during the time period described in subsection (c), based on--
            ``(1) the geographic area and employment characteristics of 
        the smaller enterprises in which the proposed investments of 
        the NMVC company will be made (in order to promote investment 
        nationwide);
            ``(2) the likelihood that the applicant will meet the goals 
        of the business plan of the applicant;
            ``(3) the experience and background of the company's 
        management team;
            ``(4) the need for equity investments within the proposed 
        investment areas;
            ``(5) the extent to which the applicant will concentrate 
        its activities on serving its investment areas;
            ``(6) the likelihood that the applicant will be able to 
        satisfy the requirements of subsection (c);
            ``(7) the extent to which the proposed activities will 
        expand economic opportunities within the investment areas; and
            ``(8) such other factors as the Administrator determines to 
        be appropriate.
    ``(c) Requirements for Final Approval.--
            ``(1) In general.--Subject to paragraph (2), each applicant 
        that is granted conditional approval by the Administrator to 
        operate as an NMVC company under subsection (b), shall, before 
        the expiration of a time period established by the 
        Administrator not to exceed 24 months, beginning on the date on 
        which such conditional approval is granted--
                    ``(A) raise not less than $5,000,000 of contributed 
                capital or binding capital commitments from 1 or more 
                investors (other than an agency of the Federal 
                Government) that meet criteria established by the 
                Administrator; and
                    ``(B) in order to provide marketing, management, 
                and technical assistance, have--
                            ``(i) cash or binding commitments for 
                        contributions (in cash or in-kind) from 1 or 
more sources other than the Administration that meet criteria 
established by the Administrator, payable or available over a multiyear 
period acceptable to the Administrator (not to exceed 10 years), in an 
amount equal to 30 percent of the capital and commitments raised under 
subparagraph (A);
                            ``(ii) purchased an annuity from an 
                        insurance company acceptable to the 
                        Administrator, using amounts (other than the 
                        amounts raised to satisfy the requirements of 
                        subparagraph (A)) from any source other than 
                        the Administration, that would yield cash 
                        payments over a multiyear period acceptable to 
                        the Administrator (not to exceed 10 years), in 
                        an amount equal to 30 percent of the capital 
                        and commitments raised under subparagraph (A); 
                        or
                            ``(iii) cash or binding commitments for 
                        contributions (in cash or in-kind) of the type 
                        described in clause (i) and have purchased an 
                        annuity of the type described in clause (ii), 
                        that in the aggregate make available, over a 
                        multiyear period acceptable to the 
                        Administrator (not to exceed 10 years), an 
                        amount equal to 30 percent of the capital and 
                        commitments raised under subparagraph (A).
            ``(2) Exception.--The Administrator may, in the discretion 
        of the Administrator and based upon a showing of special 
        circumstances and good cause, consider an applicant to have 
        satisfied the requirements of paragraph (1)(B) if the applicant 
        has a viable plan that reasonably projects the capacity of the 
        applicant to raise the amount (in cash or in-kind) required 
        under paragraph (1)(B).
    ``(d) Grant of Final Approval; Designation.--The Administrator 
shall, with respect to each applicant conditionally approved to operate 
as an NMVC company under subsection (b), either--
            ``(1) grant final approval to the applicant to operate as 
        an NMVC company under this part and designate the applicant as 
        an NMVC company, if the applicant--
                    ``(A) satisfies the requirements of subsection (c) 
                on or before the expiration of the time period 
                described in that subsection; and
                    ``(B) enters into a participation agreement with 
                the Administrator; or
            ``(2) if the applicant fails to satisfy the requirements of 
        subsection (c) on or before the expiration of the time period 
        described in that subsection, revoke the conditional approval 
        granted under that subsection.

``SEC. 355. TECHNICAL ASSISTANCE GRANTS.

    ``(a) Grants.--
            ``(1) In general.--The Administrator, in accordance with 
        such terms and conditions as the Administrator may require, is 
        authorized to award 1 or more grants to each NMVC company in 
        accordance with this subsection, which shall be used to provide 
        marketing, management, and technical assistance for the benefit 
        of smaller enterprises financed, or expected to be financed, by 
        the NMVC company.
            ``(2) Multiyear grants.--Amounts from a grant awarded under 
        this section shall be paid upon the direction of the 
        Administrator over a multiyear period of not to exceed 10 
        years.
            ``(3) Grant amount.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                amount of a grant awarded to an NMVC company under this 
                subsection shall be equal to 30 percent of the amount 
                of capital and commitments raised under section 
                354(c)(1)(A).
                    ``(B) Matching requirement.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in order to receive funds under a 
                        grant awarded under this subsection, an NMVC 
                        company shall provide a matching contribution 
                        (in cash or in-kind) from sources other than 
                        the Administration, in an amount equal to the 
                        funds to received.
                            ``(ii) Exception.--The Administrator may 
                        waive in whole or in part the matching 
                        requirement of clause (i), if the Administrator 
                        determines that such action is consistent with 
                        the purposes set forth in section 352 and with 
                        protecting the creditor status of the Federal 
                        Government as a guarantor of debentures issued 
                        by an NMVC company.
            ``(4) Pro rata reductions.--If the amount made available to 
        carry out this section for a fiscal year is insufficient for 
        the Administrator to award grants in the amounts required under 
        paragraph (3), the Administrator shall make pro rata reductions 
        in the amounts otherwise payable to each NMVC company under 
        that paragraph.
    ``(b) Supplemental Grants.--
            ``(1) In general.--In addition to any grant under 
        subsection (a), the Administrator, in accordance with such 
        terms and conditions as the Administrator may require, may make 
        1 or more supplemental grants to an NMVC company, which shall 
        be used to provide additional marketing, management, and 
        technical assistance for the benefit of smaller enterprises 
        financed, or expected to be financed, by the NMVC company.
            ``(2) Matching requirement.--The Administrator may require, 
        as a condition of any supplemental grant made under this 
        subsection, that the NMVC company provide a matching 
        contribution (in cash or in-kind) from 1 or more sources other 
        than the Administrator in an amount equal to the amount of the 
        supplemental grant.

``SEC. 356. DEBENTURES.

    ``(a) In General.--The Administrator is authorized to guarantee the 
timely payment of principal and interest as scheduled on debentures 
issued by NMVC companies, in accordance with such terms and conditions 
the Administrator determines to be appropriate.
    ``(b) Full Faith and Credit.--The full faith and credit of the 
United States is pledged to the payment of all amounts that may be 
required to be paid under any guarantee under this section.
    ``(c) Debenture Requirements.--A debenture guaranteed under this 
section--
            ``(1) may be issued for a term of not to exceed 15 years;
            ``(2) shall bear interest at a rate approved by the 
        Administrator; and
            ``(3) shall contain such other terms and conditions as the 
        Administrator may require.
    ``(d) Total Face Value.--The total face amount of debentures issued 
by an NMVC company and guaranteed under this section that may be 
outstanding at any 1 time shall not exceed 150 percent of the 
contributed capital of the NMVC company, as determined by the 
Administrator. For purposes of this subsection, the contributed capital 
of an NMVC company includes capital that is deemed to be Federal funds 
contributed by an investor other than an agency of the Federal 
Government.

``SEC. 357. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    ``(a) In General.--The Administrator (or an agent of the 
Administrator) is authorized to issue trust certificates representing 
ownership of all or a fractional part of debentures guaranteed by the 
Administrator under section 356, if such trust certificates are based 
on and backed by a trust or pool approved by the Administrator and 
composed solely of debentures guaranteed under section 356.
    ``(b) Guarantee Authority.--
            ``(1) In general.--The Administrator is authorized to, upon 
        such terms and conditions as the Administrator determines to be 
        appropriate, guarantee the timely payment of the principal of 
        and interest on any trust certificate issued under this 
        section.
            ``(2) Limitation.--A guarantee under this subsection shall 
        be limited to the extent of the principal of and interest on 
        the guaranteed debentures that compose the trust or pool 
        described in subsection (a).
            ``(3) Reduction.--If a debenture in a trust or pool 
        described in subsection (a) is prepaid, or in the event of 
        default of a debenture, the guarantee of timely payment of 
        principal and interest on the related trust certificate issued 
        under this section shall be reduced in proportion to the amount 
        of principal and interest that such prepaid debenture 
        represents in that trust or pool.
            ``(4) Accrual of interest.--Interest on prepaid or 
        defaulted debentures shall accrue and be guaranteed by the 
        Administrator only through the date of payment of the 
        guarantee.
            ``(5) Redemption of trust certificates.--During the term of 
        any trust certificate issued under this subsection, the trust 
        certificate may be called for redemption due to prepayment or 
        default of all debentures in the trust or pool.
    ``(c) Full Faith and Credit.--The full faith and credit of the 
United States is pledged to the payment of all amounts that may be 
required to be paid under any guarantee of a trust certificate issued 
under this section.
    ``(d) Fees.--The Administrator shall not collect a fee for any 
guarantee of a trust certificate issued under this section, except that 
nothing in this subsection may be construed to preclude an agent of the 
Administrator from collecting a fee approved by the Administrator for 
the functions described in subsection (f)(2).
    ``(e) Subrogation.--
            ``(1) In general.--If the Administrator pays a claim under 
        a guarantee issued under this section, the Administration shall 
        be subrogated fully to the rights satisfied by such payment.
            ``(2) Ownership rights.--No Federal, State, or local law 
        shall preclude or limit the exercise by the Administrator of 
        the ownership rights of the Administrator in the debentures 
        residing in a trust or pool against which trust certificates 
        are issued under this section.
    ``(f) Central Registration.--
            ``(1) In general.--The Administrator may provide for a 
        central registration of all trust certificates issued under 
        this section.
            ``(2) Contracting out.--
                    ``(A) In general.--The Administrator may contract 
                with an agent or agents to carry out on behalf of the 
                Administrator the pooling and the central registration 
                functions of this section including, notwithstanding 
                any other provision of law--
                            ``(i) maintenance on behalf of and under 
                        the direction of the Administrator of such 
                        commercial bank accounts or investments in 
                        obligations of the United States as may be 
                        necessary to facilitate trusts or pools backed 
                        by debentures guaranteed under this part; and
                            ``(ii) the issuance of trust certificates 
                        to facilitate such poolings.
                    ``(B) Fidelity bond or insurance required.--An 
                agent contracting with the Administrator under this 
                paragraph shall be required to provide a fidelity bond 
                or insurance in such amounts as the Administrator 
                determines to be necessary to fully protect the 
                interests of the Government.
            ``(3) Regulation of brokers and dealers.--The Administrator 
        may regulate brokers and dealers in trust certificates issued 
        under this section.
            ``(4) Electronic registration.--Nothing in this subsection 
        may be construed to prohibit the use of a book-entry or other 
        electronic form of registration for trust certificates issued 
        under this section.

``SEC. 358. FEES.

    ``Except as provided under section 357(d), the Administrator may 
charge such fees as the Administrator determines to be appropriate with 
respect to any guarantee issued or grant awarded under this part.

``SEC. 359. BANK PARTICIPATION.

    ``Any national bank, or any member bank of the Federal Reserve 
System or nonmember insured bank to the extent permitted under 
applicable State law, may invest in any 1 or more NMVC companies, or in 
any entity established to invest solely in NMVC companies, except that 
in no event shall the total amount of such investments of any such bank 
exceed 5 percent of the total capital and surplus of the bank.

``SEC. 360. REPORTING REQUIREMENTS.

    ``Each NMVC company shall provide to the Administrator such 
information as the Administrator may request, including reporting on 
the measurement criteria that the NMVC company proposed in the 
application submitted under section 354(a).

``SEC. 361. EXAMINATIONS.

    ``(a) In General.--Each NMVC company shall be subject to 
examinations made at the direction of the Investment Division of the 
Administration, which may be conducted with the assistance of a private 
sector entity that has both the qualifications to conduct and the 
expertise in conducting such examinations.
    ``(b) Assessment of Costs.--The cost of such examinations, 
including the compensation of the examiners, may in the discretion of 
the Administrator be assessed against the company examined and when so 
assessed shall be paid by such company.
    ``(c) Use of Fees.--Fees collected under this section shall be 
deposited in the account for salaries and expenses of the 
Administration and may be used solely to cover the costs of 
examinations and other program oversight activities.

``SEC. 362. INJUNCTIONS AND OTHER ORDERS.

    ``(a) In General.--If, in the judgment of the Administrator, an 
NMVC company or any other person has engaged or is about to engage in 
any act or practice that constitutes or will constitute a violation of 
any provision of this Act (or any rule, regulation, or order issued 
under this Act) or of a participation agreement entered into under this 
part--
            ``(1) the Administrator may make application to the proper 
        district court of the United States or a United States court of 
        any place subject to the jurisdiction of the United States for 
        an order enjoining such act or practice, or for an order 
        enforcing compliance with such provision; and
            ``(2) such court shall--
                    ``(A) have jurisdiction over such application and 
                any ensuing proceedings; and
                    ``(B) upon a showing by the Administrator that such 
                NMVC company or other person has engaged or is about to 
                engage in any such act or practice, grant without bond 
                a permanent or temporary injunction, restraining order, 
                or other appropriate order.
    ``(b) Powers of Court.--In any proceeding under subsection (a)--
            ``(1) the court as a court of equity may, to such extent as 
        the court determines to be necessary, take exclusive 
        jurisdiction of the NMVC company and the assets thereof, 
        wherever located; and
            ``(2) the court shall have jurisdiction in any such 
        proceeding to appoint a trustee or receiver to hold or 
        administer under the direction of the court the assets so 
        possessed.
    ``(c) Trustee or Receiver.--The Administrator is authorized to act 
as trustee or receiver of the NMVC company. Upon request by the 
Administrator, the court may appoint the Administrator to act in such 
capacity unless the court determines such appointment to be inequitable 
or otherwise inappropriate based on the special circumstances at issue.

``SEC. 363. UNLAWFUL ACTS AND OMISSIONS BY OFFICERS, DIRECTORS, 
              EMPLOYEES, OR AGENTS; BREACH OF FIDUCIARY DUTY.

    ``(a) In General.--If an NMVC company violates any provision of 
this Act (or any rule or regulation issued under this Act), or of a 
participation agreement entered into under this part, by failing to 
comply with the terms thereof or by engaging in any act or practice 
that constitutes or will constitute a violation thereof, such violation 
shall be deemed to be also a violation and an unlawful act on the part 
of any person who, directly or indirectly, authorizes, orders, 
participates in, or causes, brings about, counsels, aids, or abets in 
the commission of any act, practice, or transaction that constitutes or 
will constitute, in whole or in part, such violation.
    ``(b) Breach of Fiduciary Duty.--It shall be unlawful for any 
officer, director, employee, agent, or other participant in the 
management or conduct of the affairs of an NMVC company to engage in 
any act or practice, or to omit any act, in breach of the fiduciary 
duty of such officer, director, employee, agent, or participant, if, as 
a result thereof, the NMVC company has suffered or is in imminent 
danger of suffering financial loss or other damage.
    ``(c) Other Prohibitions.--Except with the written consent of the 
Administrator, it shall be unlawful--
            ``(1) for any person to take office as an officer, 
        director, or employee of an NMVC company, or to become an agent 
        or participant in the conduct of the affairs or management of 
        an NMVC company, if that person--
                    ``(A) has been convicted of a felony, or any other 
                criminal offense involving dishonesty or breach of 
                trust; or
                    ``(B) has been found civilly liable in damages, or 
                has been permanently or temporarily enjoined by order, 
                judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice 
                involving fraud or breach of trust; or
            ``(2) for any person to continue to serve in any of the 
        above-described capacities, if that person is subsequently--
                    ``(A) convicted of a felony, or any other criminal 
                offense involving dishonesty or breach of trust; or
                    ``(B) found civilly liable in damages, or is 
                permanently or temporarily enjoined by an order, 
                judgment, or decree of a court of competent 
                jurisdiction, by reason of any act or practice 
                involving fraud or breach of trust.
    ``(d) Notice.--The Administrator may serve upon any officer, 
director, employee, or other participant in the conduct of the 
management or other affairs of an NMVC company a written notice of the 
intention of the Administrator to remove that person from his or her 
position whenever, in the opinion of the Administrator, that person--
            ``(1) has willfully committed any substantial violation 
        of--
                    ``(A) this Act (or any rule, regulation, or order 
                issued under this Act); or
                    ``(B) a participation agreement entered into under 
                this part; or
                    ``(C) a cease-and-desist order that has become 
                final; or
            ``(2) has willfully committed or engaged in any act, 
        omission, or practice that constitutes a substantial breach of 
        fiduciary duty, and that such violation or such breach of 
        fiduciary duty is one involving personal dishonesty on the part 
        of such person.
    ``(e) Suspension or Removal.--The Administrator may suspend or 
remove from office any person upon whom the Administrator has served a 
notice under subsection (d), in accordance with the procedures set 
forth in section 313.

``SEC. 364. REGULATIONS.

    ``The Administrator may promulgate such regulations as the 
Administrator determines to be necessary to carry out this part.

``SEC. 365. AUTHORIZATIONS.

    ``(a) In General.--There is authorized to be appropriated to the 
Administration to carry out this part, to remain available until 
expended--
            ``(1) such subsidy budget authority as may be necessary to 
        guarantee not more than $100,000,000 of debentures; and
            ``(2) not more than $30,000,000 for technical assistance 
        grants.
    ``(b) Period of Effectiveness.--The authority under subsection (a) 
shall be in effect during the period beginning on October 1, 2000, and 
ending on September 30, 2005.''.
    (b) Conforming Amendment.--Section 20(e)(1)(C) of the Small 
Business Act (15 U.S.C. 631 note) is amended by inserting ``part A of'' 
before ``title III''.

SEC. 102. BANKRUPTCY EXEMPTION FOR NMVC COMPANIES.

    Section 109(b)(2) of title 11, United States Code, is amended by 
inserting after ``homestead association,'' the following: ``a new 
markets venture capital company (as defined in section 351 of the Small 
Business Investment Act of 1958),''.

SEC. 103. FEDERAL SAVINGS ASSOCIATIONS.

    Section 5(c)(4) of the Home Owners' Loan Act (12 U.S.C. 1464(c)(4)) 
is amended by adding at the end the following:
                    ``(F) New markets venture capital companies.--A 
                Federal savings association may invest in stock, 
                obligations, or other securities of any new markets 
                venture capital company (as defined in section 351 of 
                the Small Business Investment Act of 1958). A Federal 
                savings association may not make any investment under 
                this subparagraph if its aggregate outstanding 
                investment under this subparagraph would exceed 5 
                percent of the capital and surplus of such savings 
                association.''.

       TITLE II--COMMUNITY DEVELOPMENT VENTURE CAPITAL ASSISTANCE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Community Development Venture 
Capital Capacity Building and Professional Development Act of 1999''.

SEC. 202. FINDINGS.

    Congress finds that--
            (1) there is a need for the development and expansion of 
        organizations that provide private equity capital to smaller 
        businesses in areas in which equity-type capital is scarce, 
        such as inner cities and rural areas, in order to create and 
        retain jobs for low-income residents of those areas;
            (2) to invest successfully in smaller businesses, 
        particularly in inner cities and rural areas, requires highly 
        specialized investment and management skills;
            (3) there is a shortage of professionals who possess such 
        skills and there are few training grounds for individuals to 
        obtain those skills;
            (4) providing assistance to organizations that provide 
        specialized technical assistance and training to individuals 
        and organizations seeking to enter or expand in this segment of 
        the market would stimulate small business development and 
        entrepreneurship in economically distressed communities; and
            (5) assistance from the Federal Government could act as a 
        catalyst to attract investment from the private sector and 
        would help to develop a specialized venture capital industry 
        focused on creating jobs, increasing business ownership, and 
        generating wealth in low-income communities.

SEC. 203. COMMUNITY DEVELOPMENT VENTURE CAPITAL ACTIVITIES.

    (a) In General.--The Small Business Act (15 U.S.C. 631 et seq.) is 
amended--
            (1) by redesignating section 34 as section 35; and
            (2) by inserting after section 33 the following:

``SEC. 34. COMMUNITY DEVELOPMENT VENTURE CAPITAL ACTIVITIES.

    ``(a) Definitions.--In this section:
            ``(1) Community development venture capital organization.--
        The term `community development venture capital organization' 
        means a privately-controlled organization that--
                    ``(A) has a primary mission of promoting community 
                development in low-income communities, as defined by 
                the Administrator, through investment in private 
                business enterprises; or
                    ``(B) administers or is in the process of 
                establishing a community development venture capital 
                fund for the purpose of making equity investments in 
                private business enterprises in such communities.
            ``(2) Developmental organization.--The term `developmental 
        organization'--
                    ``(A) means a public or private entity, including a 
                college or university, that provides technical 
                assistance to community development venture capital 
                organizations or that conducts research or training in 
                community development venture capital investment; and
                    ``(B) may include an intermediary organization.
            ``(3) Intermediary organization.--The term `intermediary 
        organization'--
                    ``(A) means a private, nonprofit entity that has--
                            ``(i) a primary mission of promoting 
                        community development through investment in 
                        private businesses in low-income communities; 
                        and
                            ``(ii) significant prior experience in 
                        providing technical assistance or financial 
                        assistance to community development venture 
                        capital organizations;
                    ``(B) may include community development venture 
                capital organizations.
    ``(b) Authority.--In order to promote the development of community 
development venture capital organizations, the Administrator, may--
            ``(1) enter into contracts with 1 or more developmental 
        organizations to carry out training and research activities 
        under subsection (c); and
            ``(2) make grants in accordance with this section--
                    ``(A) to developmental organizations to carry out 
                training and research activities under subsection (c); 
                and
                    ``(B) to intermediary organizations to provide 
                intensive marketing, management, and technical 
                assistance and training to community development 
                venture capital organizations under subsection (d).
    ``(c) Training and Research Activities.--
            ``(1) In general.--Subject to paragraph (2), a 
        developmental organization that receives a grant under 
        subsection (b) shall use the funds made available through the 
        grant for 1 or more of the following training and research 
        activities:
                    ``(A) Strengthening professional skills.--Creating 
                and operating training programs to enhance the 
                professional skills for individuals in community 
                development venture capital organizations or operating 
                private community development venture capital funds.
                    ``(B) Increasing interest in community development 
                venture capital.--Creating and operating a program to 
                select and place students and recent graduates from 
                business and related professional schools as interns 
                with community development venture capital 
                organizations and intermediary organizations for a 
                period of up to 1 year, and to provide stipends for 
                such interns during the internship period.
                    ``(C) Promoting `best practices'.--Organizing an 
                annual national conference for community development 
                venture capital organizations to discuss and share 
                information on the best practices regarding issues 
                relevant to the creation and operation of community 
                development venture capital organizations.
                    ``(D) Mobilizing academic resources.--Encouraging 
                the formation of 1 or more centers for the study of 
                community development venture capital at graduate 
                schools of business and management, providing funding 
                for the development of materials for courses on topics 
                in this area, and providing funding for research on 
                economic, operational, and policy issues relating to 
                community development venture capital.
            ``(2) Limitation.--The Administrator shall ensure that not 
        more than 25 percent of the amount made available to carry out 
        this section is used for activities described in paragraph (1).
    ``(d) Intensive Marketing, Management, and Technical Assistance and 
Training.--An intermediary organization that receives a grant under 
subsection (b) shall use the funds made available through the grant to 
provide intensive marketing, management, and technical assistance and 
training to promote the development of community development venture 
capital organizations, which assistance may include grants to community 
development venture capital organizations for the start up costs and 
operating support of those organizations.
    ``(e) Matching Contribution Requirement.--The Administrator shall 
require, as a condition of any grant made to an intermediary 
organization under this section, that a matching contribution equal to 
the amount of such grant be provided from sources other than the 
Federal Government.
    ``(f) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $20,000,000 for fiscal years 
2000 through 2003, to remain available until expended.''.
    (b) Requirements.--The Administrator of the Small Business 
Administration may promulgate such regulations as may be necessary to 
carry out section 34 of the Small Business Act, as amended by this 
section, which regulations may take effect upon issuance.

                        TITLE III--BUSINESS LINC

SEC. 301. GRANTS AUTHORIZED.

    Section 8 of the Small Business Act (15 U.S.C. 637) is amended by 
adding at the end the following:
    ``(m) Business Linc Grants.--
            ``(1) In general.--The Administrator may make grants to and 
        enter into cooperative agreements with any coalition of private 
        or public sector participants that--
                    ``(A) expand business-to-business relationships 
                between large and small businesses; and
                    ``(B) provide businesses, directly or indirectly, 
                with online information and a database of companies 
                that are interested in mentor-protege programs or 
                community-based, state-wide, or local business 
                development programs.
            ``(2) Matching requirements.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                Administrator may make grants to and enter into 
                cooperative agreements with any coalition of private or 
                public sector participants if the coalition provides a 
                matching amount, either in-kind or in cash, equal to 
                the grant amount.
                    ``(B) Waiver.--In the best interests of the 
                program, the Administrator may waive the requirements 
                for matching funds to be provided by the coalition.
            ``(3) Authorization of appropriations.--There is authorized 
        to be appropriated to carry out this subsection $3,000,000 for 
        each of fiscal years 2000 through 2003, to remain available 
        until expended.''.

SEC. 302. REGULATIONS.

    The Administrator of the Small Business Administration may 
promulgate such regulations as the Administration determines to be 
necessary to carry out this title and the amendment made by this title.
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