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[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 1581 Introduced in Senate (IS)]

109th CONGRESS
  1st Session
                                S. 1581

To facilitate the development of science parks, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 29, 2005

  Mr. Bingaman (for himself and Mr. Bunning) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
To facilitate the development of science parks, 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 ``Science Park Administration Act of 
2005''.

SEC. 2. DEVELOPMENT OF SCIENCE PARKS.

    (a) Finding.--Section 2 of the Stevenson-Wydler Technology 
Innovation Act of 1980 (15 U.S.C. 3701) is amended by adding at the end 
the following new paragraph:
            ``(12) It is in the best interests of the Nation to 
        encourage the formation of science parks to promote the 
        clustering of innovation through high technology activities.''.
    (b) Definition.--Section 4 of such Act (15 U.S.C. 3703) is amended 
by adding at the end the following new paragraphs:
            ``(14) `Science park' means a group of interrelated 
        companies and institutions, including suppliers, service 
        providers, institutions of higher education, start-up 
        incubators, and trade associations that cooperate and compete 
        and are located in a specific area whose administration 
        promotes real estate development, technology transfer, and 
        partnerships between such companies and institutions, and does 
        not mean a business or industrial park.
            ``(15) `Business or industrial park' means primarily a for-
        profit real estate venture of businesses or industries which do 
        not necessarily reinforce each other through supply chain or 
        technology transfer mechanisms.
            ``(16) `Science park infrastructure' means facilities that 
        support the daily economic activity of a science park.''.
    (c) Promotion of Development of Science Parks.--Section 5(c) of 
such Act (15 U.S.C. 3704(c)) is amended--
            (1) in paragraph (14), by striking ``and'' at the end;
            (2) in paragraph (15), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(16) promote the formation of science parks.''.
    (d) Science Parks.--Such Act is further amended by adding at the 
end the following new section:

``SEC. 24. SCIENCE PARKS.

    ``(a) Development of Plans for Construction of Science Parks.--
            ``(1) In general.--The Secretary shall award grants for the 
        development of feasibility studies and plans for the 
        construction of new or expansion of existing science parks.
            ``(2) Limitation on amount of grants.--The amount of a 
        grant awarded under this subsection may not exceed $750,000.
            ``(3) Award.--
                    ``(A) Competition required.--The Secretary shall 
                award any grant under this subsection pursuant to a 
                full and open competition.
                    ``(B) Advertising.--The Secretary shall advertise 
                any competition under this paragraph in the Commerce 
                Business Daily.
                    ``(C) Selection criteria.--The Secretary shall 
                publish the criteria to be utilized in any competition 
                under this paragraph for the selection of recipients of 
                grants under this subsection. Such criteria shall 
                include requirements relating to--
                            ``(i) the number of jobs to be created at 
                        the science park each year for a period of 5 
                        years;
                            ``(ii) the funding to be required to 
                        construct or expand the science park over the 
                        first 5 years;
                            ``(iii) the amount and type of cost 
                        matching by the applicant;
                            ``(iv) the types of businesses and research 
                        entities expected in the science park and 
                        surrounding community;
                            ``(v) letters of intent by businesses and 
                        research entities to locate in the science 
                        park;
                            ``(vi) the capacity of the science park for 
                        expansion over a period of 25 years;
                            ``(vii) the quality of life at the science 
                        park for employees at the science park;
                            ``(viii) the capability to attract a well 
                        trained workforce to the science park;
                            ``(ix) the management of the science park;
                            ``(x) expected risks in the construction 
                        and operation of the science park;
                            ``(xi) risk mitigation;
                            ``(xii) transportation and logistics;
                            ``(xiii) physical infrastructure, including 
                        telecommunications; and
                            ``(xiv) ability to collaborate with other 
                        science parks throughout the world.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated for each of fiscal years 2006 through 2011, 
        $7,500,000 to carry out this subsection.
    ``(b) Revolving Loan Program for Development of Science Park 
Infrastructure.--
            ``(1) In general.--The Secretary shall make grants to six 
        regional centers for the development of existing science park 
        infrastructure through the operation of revolving loan funds by 
        such centers.
            ``(2) Selection of centers.--
                    ``(A) In general.--The Secretary shall select the 
                regional centers to be awarded grants under this 
                subsection utilizing such criteria as the Secretary 
                shall prescribe.
                    ``(B) Criteria.--The criteria prescribed by the 
                Secretary under this paragraph shall include criteria 
                relating to revolving loan funds and revolving loan 
                fund operators under paragraph (4), including--
                            ``(i) the qualifications of principal 
                        officers;
                            ``(ii) non-Federal cost matching 
                        requirements; and
                            ``(iii) conditions for the termination of 
                        loan funds.
            ``(3) Limitation on loan amount.--The amount of any loan 
        for the development of existing science park infrastructure 
        that is funded under this subsection may not exceed $3,000,000.
            ``(4) Revolving loan funds.--
                    ``(A) In general.--A regional center receiving a 
                grant under this subsection shall fund the development 
                of existing science park infrastructure through the 
                utilization of a revolving loan fund.
                    ``(B) Operation and integrity.--The Secretary shall 
                prescribe regulations to maintain the proper operation 
                and financial integrity of revolving loan funds under 
                this paragraph.
                    ``(C) Efficient administration.--The Secretary 
                may--
                            ``(i) at the request of a grantee, amend 
                        and consolidate grant agreements governing 
                        revolving loan funds to provide flexibility 
                        with respect to lending areas and borrower 
                        criteria;
                            ``(ii) assign or transfer assets of a 
                        revolving loan fund to a third party for the 
                        purpose of liquidation, and a third party may 
                        retain assets of the fund to defray costs 
                        related to liquidation; and
                            ``(iii) take such actions as are 
                        appropriate to enable revolving loan fund 
                        operators to sell or securitize loans (except 
                        that the actions may not include issuance of a 
                        Federal guaranty by the Secretary).
                    ``(D) Treatment of actions.--An action taken by the 
                Secretary under this paragraph with respect to a 
                revolving loan fund shall not constitute a new 
                obligation if all grant funds associated with the 
                original grant award have been disbursed to the 
                recipient.
                    ``(E) Preservation of securities laws.--
                            ``(i) Not treated as exempted securities.--
                        No securities issued pursuant to subparagraph 
                        (C)(iii) shall be treated as exempted 
                        securities for purposes of the Securities Act 
                        of 1933 or the Securities Exchange Act of 1934, 
                        unless exempted by rule or regulation of the 
                        Securities and Exchange Commission.
                            ``(ii) Preservation.--Except as provided in 
                        clause (i), no provision of this paragraph or 
                        any regulation issued by the Secretary under 
                        this paragraph shall supersede or otherwise 
                        affect the application of the securities laws 
                        (as such term is defined in section 2(a)(47) of 
                        the Securities Exchange Act of 1934) or the 
                        rules, regulations, or orders of the Securities 
                        and Exchange Commission or a self-regulatory 
                        organization thereunder.
            ``(5) Authorization of appropriations.--There is authorized 
        to be appropriated for each of fiscal years 2006 through 2011, 
        $60,000,000 to carry out this subsection.
    ``(c) Loan Guarantees for Science Park Infrastructure.--
            ``(1) In general.--The Secretary shall guarantee up to 80 
        percent of the loan amount for loans exceeding $10,000,000 for 
        projects for the construction of science park infrastructure.
            ``(2) Limitations on guarantee amounts.--The maximum amount 
        of loan principal guaranteed under this subsection may not 
        exceed--
                    ``(A) $50,000,000 with respect to any single 
                project; and
                    ``(B) $500,000,000 with respect to all projects.
            ``(3) Selection of guarantee recipients.--The Secretary 
        shall select recipients of loan guarantees under this 
        subsection based upon the ability of the recipient to 
        collateralize the loan amount through bonds, equity, property, 
        and other such criteria as the Secretary shall prescribe.
            ``(4) Terms and conditions for loan guarantees.--For 
        purposes of this section, the loans guaranteed shall be subject 
        to such terms and conditions as the Secretary may prescribe, 
        except that--
                    ``(A) the final maturity of such loans made or 
                guaranteed shall not exceed (as determined by the 
                Secretary) the lesser of--
                            ``(i) 30 years and 32 days, or
                            ``(ii) 90 percent of the useful life of any 
                        physical asset to be financed by such loan;
                    ``(B) no loan made or guaranteed may be 
                subordinated to another debt contracted by the borrower 
                or to any other claims against the borrowers in the 
                case of default;
                    ``(C) no loan may be guaranteed unless the 
                Secretary determines that the lender is responsible and 
                that adequate provision is made for servicing the loan 
                on reasonable terms and protecting the financial 
                interest of the United States;
                    ``(D) no loan may be guaranteed if the income from 
                such loan is excluded from gross income for purposes of 
                chapter 1 of the Internal Revenue Code of 1986, or if 
                the guarantee provides significant collateral or 
                security, as determined by the Secretary, for other 
                obligations the income from which is so excluded;
                    ``(E) any guarantee shall be conclusive evidence 
                that said guarantee has been properly obtained, that 
                the underlying loan qualified for such guarantee, and 
                that, but for fraud or material misrepresentation by 
                the holder, such guarantee shall be presumed to be 
                valid, legal, and enforceable;
                    ``(F) the Secretary shall prescribe explicit 
                standards for use in periodically assessing the credit 
                risk of new and existing direct loans or guaranteed 
                loans;
                    ``(G) the Secretary must find that there is a 
                reasonable assurance of repayment before extending 
                credit assistance; and
                    ``(H) new loan guarantees may not be committed 
                except to the extent that appropriations of budget 
                authority to cover their costs are made in advance, as 
                required in section 504 of the Federal Credit Reform 
                Act of 1990.
            ``(5) Payment of losses.--For purposes of this section--
                    ``(A) In general.--If, as a result of a default by 
                a borrower under a guaranteed loan, after the holder 
                thereof has made such further collection efforts and 
                instituted such enforcement proceedings as the 
                Secretary may require, the Secretary determines that 
                the holder has suffered a loss, the Secretary shall pay 
                to such holder the percentage of such loss (not more 
                than 80 percent) specified in the guarantee contract. 
                Upon making any such payment, the Secretary shall be 
                subrogated to all the rights of the recipient of the 
                payment. The Secretary shall be entitled to recover 
                from the borrower the amount of any payments made 
                pursuant to any guarantee entered into under this 
                section.
                    ``(B) Enforcement of rights.--The Attorney General 
                shall take such action as may be appropriate to enforce 
                any right accruing to the United States as a result of 
                the issuance of any guarantee under this section.
                    ``(C) Forbearance.--Nothing in this section may be 
                construed to preclude any forbearance for the benefit 
                of the borrower which may be agreed upon by the parties 
                to the guaranteed loan and approved by the Secretary, 
                if budget authority for any resulting subsidy costs (as 
                defined under the Federal Credit Reform Act of 1990) is 
                available.
                    ``(D) Management of property.--Notwithstanding any 
                other provision of law relating to the acquisition, 
                handling, or disposal of property by the United States, 
                the Secretary shall have the right in the Secretary's 
                discretion to complete, recondition, reconstruct, 
                renovate, repair, maintain, operate, or sell any 
                property acquired by the Secretary pursuant to the 
                provisions of this section.
            ``(6) Review.--The Comptroller General of the United States 
        shall, within 2 years of the date of enactment of this section, 
        conduct a review of the subsidy estimates for the loan 
        guarantees under this subsection, and shall submit to Congress 
        a report on the review conducted under this paragraph.
            ``(7) Termination.--No loan may be guaranteed under this 
        subsection after September 30, 2011.
            ``(8) Authorization of appropriations.--There is authorized 
        to be appropriated--
                    ``(A) such sums as may be necessary for the cost, 
                as defined in section 502(5) of the Federal Credit 
                Reform Act of 1990, of guaranteeing $500,000,000 of 
                loans under this subsection, and
                    ``(B) $6,000,000 for administrative expenses for 
                fiscal year 2006 and such sums as necessary thereafter 
                for administrative expenses in subsequent years.
    ``(d) National Academy of Sciences Evaluation.--
            ``(1) In general.--The Secretary shall enter into an 
        agreement with the National Academy of Sciences under which the 
        Academy shall evaluate, on a tri-annual basis, the activities 
        under this section.
            ``(2) Tri-annual report.--Under the agreement under 
        paragraph (1), the Academy shall submit to the Secretary a 
        report on its evaluation of science park development under that 
        paragraph. Each report may include such recommendations as the 
        Academy considers appropriate for additional activities to 
        promote and facilitate the development of science parks in the 
        United States.
    ``(e) Tri-Annual Report.--Not later than March 31 of every third 
year, the Secretary shall submit to Congress a report on the activities 
under this section during the preceding 3 years, including any 
recommendations made by the National Academy of Sciences under 
subsection (d)(2) during such period. Each report may include such 
recommendations for legislative or administrative action as the 
Secretary considers appropriate to further promote and facilitate the 
development of science parks in the United States.
    ``(f) Regulations.--
            ``(1) Regulations.--Consistent with Office of Management 
        and Budget Circular A-129, `Policies for Federal Credit 
        Programs and Non-Tax Receivables', the Secretary shall 
        prescribe regulations to carry out this section.
            ``(2) Deadline.--The Secretary shall prescribe such 
        regulations not later than one year after the date of enactment 
        of this section.''.

SEC. 3. SCIENCE PARK VENTURE CAPITAL FUND PILOT PROGRAM.

    Title III of the Small Business Investment Act of 1958 (15 U.S.C. 
681 et seq.) is amended by adding at the end the following:

       ``PART C--SCIENCE PARK VENTURE CAPITAL FUND PILOT PROGRAM

``SEC. 1. DEFINITIONS.

    ``As used in this part, the following definitions shall apply:
            ``(1) Business or industrial park.--The term `Business or 
        industrial park' means primarily a for-profit real estate 
        venture of businesses or industries which do not necessarily 
        reinforce each other through supply chain or technology 
        transfer mechanisms.
            ``(2) Equity capital.--The term `equity capital' means 
        common or preferred stock or a similar instrument, including 
        subordinated debt with equity features.
            ``(3) High-technology.--The term `high-technology' means 
        any of the high technology industries in the North American 
        Industrial Classification System, as listed in table 8-25 of 
        the National Science Board publication entitled `Science and 
        Engineering Indicators 2004', or as listed in any succeeding 
        editions of such publication.
            ``(4) Leverage.--The term `leverage' includes--
                    ``(A) debentures purchased or guaranteed by the 
                Administrator;
                    ``(B) participating securities purchased or 
                guaranteed by the Administrator; and
                    ``(C) preferred securities outstanding as of the 
                date of enactment of this part.
            ``(5) Mezzanine financing.--The term `mezzanine financing' 
        means late-stage venture capital usually associated with the 
        final round of financing prior to an initial public offering.
            ``(6) Operational assistance.--The term `operational 
        assistance' means management, marketing, and other technical 
        assistance that assists high-technology start-up companies with 
        business development.
            ``(7) Participation agreement.--The term `participation 
        agreement' means an agreement, between the Administrator and a 
        company granted final approval by the Administrator under 
        section 374(e), that--
                    ``(A) details the operating plan and investment 
                criteria of the company; and
                    ``(B) requires the company to make investments in 
                high-technology start-up companies within a science 
                park.
            ``(8) Private capital.--The term `private capital'--
                    ``(A) means the total of--
                            ``(i)(I) the paid-in capital and paid-in 
                        surplus of a corporate science park venture 
                        capital company;
                            ``(II) the contributed capital of the 
                        partners of a partnership science park venture 
                        capital company; or
                            ``(III) the equity investment of the 
                        members of a limited liability company science 
                        park venture capital company; and
                            ``(ii) unfunded binding commitments from 
                        investors that meet criteria established by the 
                        Administrator to contribute capital to the 
                        science park venture capital company, except 
                        that--
                                    ``(I) unfunded commitments may be 
                                counted as private capital for purposes 
                                of approval by the Administrator of any 
                                request for leverage; and
                                    ``(II) leverage shall not be funded 
                                based on the commitments; and
                    ``(B) does not include--
                            ``(i) any funds borrowed by a science park 
                        venture capital company from any source;
                            ``(ii) any funds obtained through the 
                        issuance of leverage; or
                            ``(iii) any funds obtained directly or 
                        indirectly from Federal, State, or local 
                        government, except for--
                                    ``(I) funds obtained from the 
                                business revenues of any federally 
                                chartered or government-sponsored 
                                enterprise established before the date 
                                of enactment of this part;
                                    ``(II) funds invested by an 
                                employee welfare benefit plan or 
                                pension plan; and
                                    ``(III) any qualified nonprivate 
                                funds, if the investors of such funds 
                                do not directly or indirectly control 
                                the management, board of directors, 
                                general partners, or members of the 
                                science park venture capital company.
            ``(9) Program.--The term `Program' means the Science Park 
        Venture Capital Program established under section 372.
            ``(10) Qualified nonprivate funds.--The term `qualified 
        nonprivate funds' means--
                    ``(A) any funds directly or indirectly invested in 
                any applicant or science park venture capital company 
                on or before the date of enactment of this part, by any 
                Federal agency other than the Administration, under a 
                law explicitly mandating the inclusion of those funds 
                in the definition of the term private capital; and
                    ``(B) any funds invested in any applicant or 
                science park venture capital company by 1 or more 
                entities of any State, including any guarantee extended 
                by any such entity, in an aggregate amount not to 
                exceed 33 percent of the private capital of the 
                applicant or science park venture capital company.
            ``(11) Science park.--The term `science park' means a group 
        of interrelated companies and institutions, including 
        suppliers, service providers, institutions of higher education, 
        start-up incubators, and trade associations that cooperate and 
        compete and are located in a specific area whose administration 
        promotes real estate development, technology transfer, and 
        partnerships between such companies and institutions, and does 
        not mean a business or industrial park.
            ``(12) Science park venture capital.--The term `science 
        park venture capital' means equity capital investments in high-
        technology start-up businesses located in science parks to 
        foster economic development and technological innovation.
            ``(13) Science park venture capital company.--The term 
        `science park venture capital company' means a company that--
                    ``(A) meets the requirements under section 373;
                    ``(B) has been granted final approval by the 
                Administrator under section 374(e); and
                    ``(C) has entered into a participation agreement 
                with the Administrator.
            ``(14) Start-up company.--The term `start-up company' means 
        a company that has developed intellectual property protection 
        of research and development, but has not reached the stage 
        associated with equity or securitized investments typical of 
        venture capital or mezzanine financing.
            ``(15) State.--The term `State' means each of the several 
        States of the United States, the District of Columbia, the 
        Commonwealth of Puerto Rico, the Virgin Islands, Guam, American 
        Samoa, the Commonwealth of the Northern Mariana Islands, and 
        any other commonwealth, territory, or possession of the United 
        States.

``SEC. 2. ESTABLISHMENT.

    ``There is established a Science Park Venture Capital Program, 
under which the Administrator may--
            ``(1) enter into participation agreements with companies 
        granted final approval under section 374(e);
            ``(2) guarantee the debentures issued by science park 
        venture capital companies under section 375; and
            ``(3) award grants to science park venture capital 
        companies under section 377.

``SEC. 3. REQUIREMENTS FOR SCIENCE PARK VENTURE CAPITAL COMPANIES.

    ``(a) Organization.--For purposes of this part, a science park 
venture capital company--
            ``(1) shall be an incorporated body, a limited liability 
        company, or a limited partnership organized and chartered, or 
        otherwise existing under State law solely for the purpose of 
        performing the functions and conducting the activities 
        authorized by this part;
            ``(2) if incorporated, shall have succession for a period 
        of not less than 30 years unless earlier dissolved by the 
        shareholders of the company;
            ``(3) if a limited partnership or a limited liability 
        company, shall have succession for a period of not less than 10 
        years; and
            ``(4) shall possess the powers reasonably necessary to 
        perform the functions and conduct the activities.
    ``(b) Articles.--The articles of any science park venture capital 
company--
            ``(1) shall specify in general terms--
                    ``(A) the purposes for which the company is formed;
                    ``(B) the name of the company;
                    ``(C) the area or areas in which the operations of 
                the company are to be carried out;
                    ``(D) the place where the principal office of the 
                company is to be located; and
                    ``(E) the amount and classes of the shares of 
                capital stock of the company;
            ``(2) may contain any other provisions consistent with this 
        part that the science park venture capital company may 
        determine to be appropriate to adopt for the regulation of the 
        business of the company and the conduct of the affairs of the 
        company; and
            ``(3) shall be subject to the approval of the 
        Administrator.
    ``(c) Capital Requirements.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        private capital of each science park venture capital company 
        shall be not less than--
                    ``(A) $5,000,000; or
                    ``(B) $10,000,000, with respect to each science 
                park venture capital company authorized or seeking 
                authority to issue participating securities to be 
                purchased or guaranteed by the Administrator under this 
                part.
            ``(2) Exception.--The Secretary may, in the discretion of 
        the Administrator, and based on a showing of special 
        circumstances and good cause, permit the private capital of 
        science park venture capital company described in paragraph 
        (1)(B) to be less than $10,000,000, but not less than 
        $5,000,000, if the Administrator determines that the action 
        would not create or otherwise contribute to an unreasonable 
        risk of default or loss to the Federal Government.
            ``(3) Adequacy.--In addition to the requirements under 
        paragraph (1), the Administrator shall--
                    ``(A) determine whether the private capital of each 
                science park venture capital company is adequate to 
                ensure a reasonable prospect that the company will be 
                operated soundly and profitably, and managed actively 
                and prudently in accordance with the articles of the 
                company;
                    ``(B) determine that the science park venture 
                capital company will be able to comply with the 
                requirements of this part; and
                    ``(C) ensure that the science park venture capital 
                company is designed primarily to meet equity capital 
                needs of the businesses in which the company invests 
                and not to compete with traditional financing by 
                commercial lenders of high-technology startup 
                businesses.
    ``(d) Diversification of Ownership.--The Administrator shall ensure 
that the management of each science park venture capital company 
licensed after the date of enactment of this part is sufficiently 
diversified from, and unaffiliated with, the ownership of the company 
so as to ensure independence and objectivity in the financial 
management and oversight of the investments and operations of the 
company.

``SEC. 4. SELECTION OF SCIENCE PARK VENTURE CAPITAL COMPANIES.

    ``(a) Eligibility.--A company is eligible to participate as a 
science park venture capital company in the Program if the company--
            ``(1) is a newly formed for-profit entity or a newly formed 
        for-profit subsidiary of an existing entity;
            ``(2) has a management team in the science park with 
        experience in development financing or relevant venture capital 
        financing;
            ``(3) has a primary objective of economic development of 
        the science park and its surrounding geographic area; and
            ``(4) promotes innovation of science and technology in the 
        science park.
    ``(b) Application.--Any eligible company that desires to 
participate as a science park venture capital company in the Program 
shall submit an application to the Administrator, which shall include--
            ``(1) a business plan describing how the company intends to 
        make successful venture capital investments in start up 
        companies within the science park;
            ``(2) a description of the qualifications and general 
        reputation of the management of the company;
            ``(3) an estimate of the ratio of cash to in-kind 
        contributions of binding commitments to be made to the company 
        under the Program;
            ``(4) a description of the criteria to be used to evaluate 
        whether, and to what extent, the company meets the objectives 
        of the Program;
            ``(5) information regarding the management and financial 
        strength of any parent firm, affiliated firm, or other firm 
        essential to the success of the business plan of the company; 
        and
            ``(6) such other information as the Administrator may 
        require.
    ``(c) Status.--Not later than 90 days after the initial receipt by 
the Administrator of an application under this section, the 
Administrator shall provide to the applicant a written report that 
describes the status of the applicants and any requirements remaining 
for completion of the application.
    ``(d) Matters Considered.--In reviewing and processing any 
application under this section, the Administrator--
            ``(1) shall determine if--
                    ``(A) the applicant meets the requirements under 
                subsection (e); and
                    ``(B) the management of the applicant is qualified 
                and has the knowledge, experience, and capability 
                necessary to comply with this part;
            ``(2) shall take into consideration--
                    ``(A) the need for and availability of financing 
                for high-technology start-up companies in the science 
                park in which the applicant is to commence business;
                    ``(B) the general business reputation of the owners 
                and management of the applicant; and
                    ``(C) the probability of successful operations of 
                the applicant, including adequate profitability and 
                financial soundness;
            ``(3) shall not take into consideration any projected 
        shortage or unavailability of grant funds or leverage; and
            ``(4) shall emphasize the promotion of regional science 
        park venture capital companies to serve multiple research parks 
        in order to avoid geographic dilution of management and 
        capital.
    ``(e) Approval; License.--The Administrator may approve an 
applicant to operate as a science park venture capital company under 
this part and license the applicant as a science park venture capital 
company, if--
            ``(1) the Administrator determines that the application 
        satisfies the requirements under subsection (b);
            ``(2) the Administrator approves--
                    ``(A) the area in which the science park venture 
                capital company is to conduct its operations; and
                    ``(B) the establishment of branch offices or 
                agencies (if authorized by the articles); and
            ``(3) the applicant enters into a participation agreement 
        with the Administrator.

``SEC. 5. DEBENTURES.

    ``(a) Guarantees.--The Administrator may guarantee the timely 
payment of principal and interest, as scheduled, on debentures issued 
by any science park venture capital company.
    ``(b) Terms and Conditions.--The Administrator may make guarantees 
under this section on such terms and conditions as the Administrator 
determines to be appropriate, except that the term of any debenture 
guaranteed under this section shall not exceed 15 years.
    ``(c) Full Faith and Credit of the United States.--The full faith 
and credit of the United States is pledged to pay all amounts that may 
be required to be paid under any guarantee under this part.
    ``(d) Maximum Guarantee.--The Administrator may--
            ``(1) guarantee the debentures issued by a science park 
        venture capital company only to the extent that the total face 
        amount of outstanding guaranteed debentures of such company 
        does not exceed the lesser of--
                    ``(A) 300 percent of the private capital of the 
                company, or
                    ``(B) $100,000,000; and
            ``(2) provide for the use of discounted debentures.

``SEC. 6. ISSUANCE AND GUARANTEE OF TRUST CERTIFICATES.

    ``(a) Issuance.--The Administrator may issue trust certificates 
representing ownership of all or a part of debentures issued by a 
science park venture capital company and guaranteed by the 
Administrator under this part, if such certificates are based on and 
backed by a trust or pool approved by the Administrator and composed 
solely of guaranteed debentures.
    ``(b) Guarantee.--
            ``(1) In general.--The Administrator may, under such terms 
        and conditions as it deems appropriate, guarantee the timely 
        payment of the principal of and interest on trust certificates 
        issued by the Administrator or its agents for purposes of this 
        section.
            ``(2) Limitation.--Each guarantee under this subsection 
        shall be limited to the extent of principal and interest on the 
        guaranteed debentures that compose the trust or pool.
            ``(3) Prepayment or default.--
                    ``(A) In general.--In the event that a debenture in 
                a trust or pool is prepaid, or in the event of default 
                of such a debenture, the guarantee of timely payment of 
                principal and interest on the trust certificates shall 
                be reduced in proportion to the amount of principal and 
                interest such prepaid debenture represents in the trust 
                or pool.
                    ``(B) Interest.--Interest on prepaid or defaulted 
                debentures shall accrue and be guaranteed by the 
                Administrator only through the date of payment of the 
                guarantee.
                    ``(C) Redemption.--At any time during its term, a 
                trust certificate may be called for redemption due to 
                prepayment or default of all debentures.
    ``(c) Full Faith and Credit.--The full faith and credit of the 
United States is pledged to pay all amounts that may be required to be 
paid under any guarantee of a trust certificate issued by the 
Administrator or its agents under this section.
    ``(d) Subrogation and Ownership Rights.--
            ``(1) Subrogation.--If the Administrator pays a claim under 
        a guarantee issued under this section, it shall be subrogated 
        fully to the rights satisfied by such payment.
            ``(2) Ownership rights.--No provision of Federal, State, or 
        local law shall preclude or limit the exercise by the 
        Administrator of its ownership rights in the debentures 
        residing in a trust or pool against which 1 or more trust 
        certificates are issued under this section.
    ``(e) Management and Administration.--
            ``(1) Registration.--The Administrator may provide for a 
        central registration of all trust certificates issued under 
        this section.
            ``(2) Contracting of functions.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, the Administrator may contract with 
                an agent or agents to carry out on behalf of the 
                Administrator the pooling and the central registration 
                functions provided for in this section, including--
                            ``(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 the creation of trusts 
                        or pools backed by debentures guaranteed under 
                        this part; and
                            ``(ii) the issuance of trust certificates 
                        to facilitate the creation of such trusts or 
                        pools.
                    ``(B) Fidelity bond or insurance requirement.--Any 
                agent performing functions on behalf of the 
                Administrator under this paragraph shall provide a 
                fidelity bond or insurance in such amounts as the 
                Administrator determines necessary to fully protect the 
                interests of the United States.
                    ``(C) Regulation of brokers and dealers.--The 
                Administrator may regulate brokers and dealers in trust 
                certificates issued under this section.
                    ``(D) 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. 7. OPERATIONAL ASSISTANCE GRANTS.

    ``(a) In General.--
            ``(1) Grants authorized.--The Administrator may award 
        grants to science park venture capital companies and other 
        entities to provide operational assistance to high-technology 
        start-up companies financed, or expected to be financed, by 
        such companies.
            ``(2) Terms.--Grants under this subsection shall be made 
        over a period not to exceed 10 years, under such other terms as 
        the Administrator may require.
            ``(3) Grant amount.--Each grant awarded under this 
        subsection shall be equal to the lesser of--
                    ``(A) 10 percent of the private capital raised by 
                the science park venture capital company; or
                    ``(B) $1,000,000.
            ``(4) Other entities.--The amount of a grant made under 
        this subsection to any entity other than a science park venture 
        capital company shall be equal to the resources (in cash or in 
        kind) raised by the entity in accordance with the requirements 
        applicable to science park venture capital companies under this 
        part.
    ``(b) Supplemental Grants.--
            ``(1) In general.--The Administrator may award supplemental 
        grants to science park venture capital companies and other 
        entities, under such terms as the Administrator may require, to 
        provide additional operational assistance to start-up companies 
        financed, or expected to be financed, by such companies or 
        entities.
            ``(2) Matching requirement.--The Administrator may require, 
        as a condition of any supplemental grant made under this 
        subsection, that the company or entity receiving the grant 
        provide a matching contribution equal to 50 percent of the 
        amount of the supplemental grant from non-Federal cash or in-
        kind resources.
    ``(c) Limitation.--None of the assistance made available under this 
section may be used for any overhead or general and administrative 
expense of a science park venture capital company or other entity.

``SEC. 8. REPORTING REQUIREMENTS.

    ``(a) Science Park Venture Capital Companies.--Each science park 
venture capital company shall provide the Administrator with such 
information as the Administrator may require, including information 
relating to the criteria described in section 374(b)(4).
    ``(b) Public Reports.--
            ``(1) In general.--The Administrator shall prepare and make 
        available to the public an annual report on the Program, which 
        shall include detailed information on--
                    ``(A) the number of science park venture capital 
                companies licensed by the Administrator during the 
                previous fiscal year;
                    ``(B) the aggregate amount of leverage that science 
                park venture capital companies have received from the 
                Federal Government during the previous fiscal year;
                    ``(C) the aggregate number of each type of 
                leveraged instruments used by science park venture 
                capital companies during the previous fiscal year, and 
                how each such number compares to the number in previous 
                fiscal years;
                    ``(D) for the previous fiscal year, the number of--
                            ``(i) science park venture capital company 
                        licenses surrendered; and
                            ``(ii) the number of science park venture 
                        capital companies placed in liquidation;
                    ``(E) the amount and type of leverage each such 
                company has received from the Federal Government;
                    ``(F) the amount of losses sustained by the Federal 
                Government as a result of operations under this part 
                during the previous fiscal year and an estimate of the 
                total losses that the Federal Government can reasonably 
                expect to incur as a result of the operations during 
                the current fiscal year;
                    ``(G) actions taken by the Administrator to 
                maximize recoupment of funds of the Federal Government 
                expended to implement and administer the Program during 
                the previous fiscal year and to ensure compliance with 
                the requirements of this part, including implementing 
                regulations;
                    ``(H) the amount of Federal Government leverage 
                that each licensee received in the previous fiscal year 
                and the types of leverage instruments used by each 
                licensee;
                    ``(I) for each type of financing instrument, the 
                sizes, types of geographic locations, and other 
                characteristics of the small business investment 
                companies using the instrument during the previous 
                fiscal year, including the extent to which the 
                investment companies have used the leverage from each 
                instrument to make loans or equity investments in 
                science parks; and
                    ``(J) the actions of the Administrator to carry out 
                this part.
            ``(2) Prohibition.--In compiling the report required under 
        paragraph (1), the Administrator may not--
                    ``(A) compile the report in a manner that permits 
                identification of any particular type of investment by 
                an individual science park venture capital company in 
                which a science park venture capital company invests; 
                or
                    ``(B) release any information that is prohibited 
                under section 1905 of title 18, United States Code.

``SEC. 9. EXAMINATIONS.

    ``(a) In General.--Each science park venture capital company that 
participates in the Program shall be subject to examinations made at 
the direction of the Administrator, in accordance with this section.
    ``(b) Assistance of Private Sector Entities.--An examination under 
this section may be conducted with the assistance of a private sector 
entity that has the qualifications and expertise necessary to conduct 
such an examination.
    ``(c) Costs.--
            ``(1) In general.--The Administrator may assess the cost of 
        an examination under this section, including compensation of 
        the examiners, against the science park venture capital company 
        examined.
            ``(2) Payment.--Any science park venture capital company 
        against which the Administrator assesses costs under this 
        subsection shall pay the costs assessed.
    ``(d) Deposit of Funds.--Funds collected under this section--
            ``(1) shall be deposited in the account that incurred the 
        costs for carrying out this section;
            ``(2) shall be made available to the Administrator to carry 
        out this section, without further appropriation; and
            ``(3) shall remain available until expended.

``SEC. 10. BANK PARTICIPATION.

    ``(a) In General.--Except as provided under subsection (b), any 
national bank, any member bank of the Federal Reserve System, and, to 
the extent permitted under applicable State law, any insured bank that 
is not a member of such system, may invest in--
            ``(1) any science park venture capital company; or
            ``(2) any entity established to invest solely in science 
        park venture capital companies.
    ``(b) Limitation.--No bank described in subsection (a) may make 
investments described in that subsection that are greater than 5 
percent of the capital and surplus of the bank.

``SEC. 11. FEES.

    ``(a) In General.--Except as provided under subsection (b), the 
Administrator may charge such fees as it determines to be appropriate 
with respect to any guarantee or grant issued under this part.
    ``(b) Exception.--The Administrator shall not collect a fee for any 
guarantee of a trust certificate under this section. Any agent of the 
Administrator may collect a fee, upon the approval of the 
Administrator, for the functions described in section 376(e)(2).

``SEC. 12. APPLICABLE LAW.

    ``(a) In General.--The provisions relating to New Market Venture 
Capital companies under sections 361 through section 366 shall apply to 
science park venture capital companies.
    ``(b) Purchase of Guaranteed Obligations.--Section 318 shall not 
apply to any debenture issued by a science park venture capital company 
under this part.

``SEC. 13. REGULATIONS.

    ``Not later than 12 months after the date of enactment of this 
part, the Administrator shall issue such regulations as it determines 
necessary to carry out this part.

``SEC. 14. AUTHORIZATIONS OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated to the 
Administration for each of the fiscal years 2006 through 2011, to 
remain available until expended--
            ``(1) such sums as may be necessary for the cost, as 
        defined in section 502(5) of the Federal Credit Reform Act of 
        1990, of guaranteeing $500,000,000 of debentures under this 
        part; and
            ``(2) $50,000,000 to make grants under this part.
    ``(b) Funds Collected for Examinations.--Funds deposited pursuant 
to section 362(d) may only be used for--
            ``(1) examinations under section 362; and
            ``(2) other oversight activities of the Program.''.

SEC. 4. TAX INCENTIVES FOR INVESTMENT IN SCIENCE PARKS.

    (a) Expensing.--
            (1) In general.--Section 179(d) of the Internal Revenue 
        Code of 1986 (relating to definitions and special rules) is 
        amended by adding at the end the following new paragraph:
            ``(11) Application of section to property placed in service 
        in science parks.--
                    ``(A) In general.--In the case of any section 179 
                property placed in service in any science park, this 
                section shall be applied without regard to paragraphs 
                (1) and (2) of subsection (b).
                    ``(B) Science park.--
                            ``(i) In general.--The term `science park' 
                        means a group of interrelated companies and 
                        institutions, including suppliers, service 
                        providers, institutions of higher education, 
                        start-up incubators, and trade associations 
                        that cooperate and compete and are located in a 
                        specific area whose administration promotes 
                        real estate development, technology transfer, 
                        and partnerships between such companies and 
                        institutions, and does not mean a business or 
                        industrial park.
                            ``(ii) Business or industrial park.--The 
                        term `business or industrial park' means 
                        primarily a for-profit real estate venture of 
                        businesses or industries which do not 
                        necessarily reinforce each other through supply 
                        chain or technology transfer mechanisms.''.
            (2) Effective date.--The amendment made by this subsection 
        shall apply with respect to property placed in service after 
        the date of the enactment of this Act.
    (b) Tax Credit for Research Activities.--
            (1) In general.--Section 41(a) of the Internal Revenue Code 
        of 1986 (relating to credit for increasing research activities) 
        is amended by striking ``and'' at the end of paragraph (1)(B), 
        by striking the period at the end of paragraph (2) and 
        inserting ``, and'', and by adding at the end the following new 
        paragraph:
            ``(3) 20 percent of the qualified research expenses paid or 
        incurred by the taxpayer during the taxable year in carrying on 
        any trade or business located in a science park.''.
            (2) Science park.--Section 41(f) of such Code (relating to 
        special rules) is amended by adding at the end the following 
        new paragraph:
            ``(6) Science park.--
                    ``(A) In general.--The term `science park' means a 
                group of interrelated companies and institutions, 
                including suppliers, service providers, institutions of 
                higher education, start-up incubators, and trade 
                associations that cooperate and compete and are located 
                in a specific area whose administration promotes real 
                estate development, technology transfer, and 
                partnerships between such companies and institutions, 
                and does not mean a business or industrial park.
                    ``(B) Business or industrial park.--The term 
                `business or industrial park' means primarily a for-
                profit real estate venture of businesses or industries 
                which do not necessarily reinforce each other through 
                supply chain or technology transfer mechanisms.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
    (c) Private Business Use of a Bond-Financed Facility Does Not 
Include Performance of Research Using Federal Government Funding in 
Such Facility.--
            (1) In general.--Subparagraph (A) of section 141(b)(6) of 
        the Internal Revenue Code of 1986 (defining private business 
        use) is amended by inserting ``or use in the performance of 
        research using, in whole or in part, funds of the United States 
        or any agency or instrumentality thereof'' before ``shall not 
        be taken into account''.
            (2) Effective date.--
                    (A) In general.--The amendment made by this 
                subsection shall apply to any use on or after the date 
                of the enactment of this Act.
                    (B) No inference.--Nothing in the amendment made by 
                this subsection shall be construed to create any 
                inference with respect to the use of tax-exempt bond 
                financed facilities before the effective date of such 
                amendment.
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