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[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 2737 Introduced in Senate (IS)]

108th CONGRESS
  2d Session
                                S. 2737

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

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 22, 2004

 Mr. Bingaman 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 
2004''.

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 paragraph:
            ``(14) `Science park' means a group of interrelated 
        companies and institutions, including suppliers, service 
        providers, institutions of higher education, and trade 
        associations that cooperate as well as compete and are located 
        in a specific area whose administration promotes real estate 
        development, technology transfer, and partnerships between such 
        companies and institutions.''.
    (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 and 
        enter into contracts and cooperative agreements for the 
        development of plans for the construction of science parks.
            ``(2) Limitation on amount of grants, contracts, or 
        agreements.--The amount of a grant awarded, or contract or 
        cooperative agreement entered into, under this subsection may 
        not exceed $500,000.
            ``(3) Award or entry.--
                    ``(A) Competition required.--The Secretary shall 
                award any grant, or enter into any contract or 
                cooperative agreement, for project under this 
                subsection pursuant to a peer-reviewed 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 to select recipients of grants, or 
                parties to contracts or cooperative agreements, 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 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 over the 
                        first 5 years;
                            ``(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, 
                        including a business plan of the management 
                        entity to become self-sufficient;
                            ``(x) expected risks in the construction 
                        and operation of the science park;
                            ``(xi) risk mitigation;
                            ``(xii) transportation and logistics; and
                            ``(xiii) physical infrastructure, including 
                        telecommunications.
            ``(4) Authorization of appropriations.--There is authorized 
        to be appropriated for each of fiscal years 2005 through 2010, 
        $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 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;
                            ``(iii) auditing of loan funds according to 
                        Generally Accepted Accounting Principles 
                        (GAAP);
                            ``(iv) conditions for the termination of 
                        loan funds; and
                            ``(v) annual reporting requirements.
            ``(3) Limitation on project amount.--The amount of any 
        project for the development of science park infrastructure that 
        is funded under this subsection may not exceed $1,000,000.
            ``(4) Revolving loan funds.--
                    ``(A) In general.--A regional center receiving a 
                grant under this subsection shall fund the development 
                of 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 2005 through 2010, 
        $60,000,000 to carry out this subsection.
    ``(c) Loan Guarantees for Science Park Infrastructure.--
            ``(1) In general.--The Secretary shall guarantee loans 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) $1,000,000,000 with respect to all projects.
            ``(3) Selection of guarantee recipients.--The Secretary 
        shall select recipients of loan guarantees under this 
        subsection utilizing such criteria as the Secretary shall 
        prescribe.
            ``(4) Oversight.--The Comptroller General of the United 
        States shall, on a biennial basis, conduct an audit of the 
        loans guaranteed under this subsection, and shall submit to 
        Congress a report on each audit conducted under this paragraph.
            ``(5) Termination.--No loan may be guaranteed under this 
        subsection after September 30, 2010.
            ``(6) Authorization of appropriations.--There is authorized 
        to be appropriated $1,000,000,000 for the cost, as defined in 
        section 502(5) of the Federal Credit Reform Act of 1990, of 
        loans guaranteed under this subsection.
    ``(d) National Academy of Sciences Evaluation of Science Park 
Development.--
            ``(1) In general.--The Secretary shall enter into an 
        agreement with the National Academy of Sciences under which the 
        Academy shall evaluate, on an annual basis, the development of 
        science parks pursuant to activities under this section.
            ``(2) Annual report.--Under the agreement under paragraph 
        (1), the Academy shall submit to the Secretary each year 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) Annual Report.--Not later than March 31 each year, the 
Secretary shall submit to Congress a report on the activities under 
this section during the preceding year, including the results of any 
audit by the Comptroller General under subsection (c)(4) during such 
year and any recommendations made by the National Academy of Sciences 
under subsection (d)(2) during such year. 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.--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 the 
        enactment of the Science Park Administration Act of 2004.''.

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. 371. DEFINITIONS.

    ``As used in this part, the following definitions shall apply:
            ``(1) Equity capital.--The term `equity capital' means 
        common or preferred stock or a similar instrument, including 
        subordinated debt with equity features.
            ``(2) 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'.
            ``(3) 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.
            ``(4) 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.
            ``(5) Operational assistance.--The term `operational 
        assistance' means management, marketing, and other technical 
        assistance that assists high-technology start-up companies with 
        business development.
            ``(6) 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.
            ``(7) 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.
            ``(8) Program.--The term `Program' means the Science Park 
        Venture Capital Program established under section 372.
            ``(9) 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.
            ``(10) Science park.--The term `science park' means a group 
        of interrelated companies and institutions, including 
        suppliers, service providers, institutions of higher education, 
        and trade associations that cooperate as well as compete and 
        are located in a specific area whose administration promotes 
        real estate development, technology transfer, and partnerships 
        between such companies and institutions.
            ``(11) 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.
            ``(12) 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.
            ``(13) 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 mezzanine financing.
            ``(14) 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. 372. 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 373(e);
            ``(2) guarantee the debentures issued by science park 
        venture capital companies under section 374; and
            ``(3) award grants to science park venture capital 
        companies under section 376.

``SEC. 373. 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;
                    ``(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; and
                    ``(D) require that the science park venture capital 
                company makes short-term non-equity investments of less 
                than 5 years only to the extent necessary to preserve 
                an existing investment.
    ``(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. 374. 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; and
            ``(3) has a primary objective of economic development of 
        the science park and its surrounding geographic area.
    ``(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; and
            ``(3) shall not take into consideration any projected 
        shortage or unavailability of grant funds or leverage.
    ``(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. 375. 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. 376. 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. 377. 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 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. 378. 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. 379. 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. 380. 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. 381. 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. 382. 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. 383. 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. 384. AUTHORIZATIONS OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated to the 
Administration for each of the fiscal years 2005 through 2010, to 
remain available until expended--
            ``(1) such subsidy budget authority as may be necessary to 
        guarantee $1,000,000,000 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.--The term `science park' means 
                a group of interrelated companies and institutions, 
                including suppliers, service providers, institutions of 
                higher education, and trade associations that cooperate 
                as well as compete and are located in a specific area 
                approved by the Secretary and whose administration 
                promotes real estate development, technology transfer, 
                and partnerships between such companies and 
                institutions.''.
            (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) Wage Credit.--
            (1) Member of targeted group.--Section 51(d)(1) of the 
        Internal Revenue Code of 1986 (defining members of targeted 
        groups) is amended by striking ``or'' at the end of 
        subparagraph (G), by striking the period at the end of 
        subparagraph (H) and inserting ``, or'', and by adding at the 
        end the following new subparagraph:
                    ``(I) a science park employee.''.
            (2) Science park employee.--Section 51(d) of such Code is 
        amended by adding at the end the following new paragraph:
            ``(13) Science park employee.--
                    ``(A) In general.--The term `science park employee' 
                means, with respect to any period, any employee of any 
                trade or business located in a science park if 
                substantially all the services performed during such 
                period by such employee for such business are performed 
                in such science park.
                    ``(B) Science park.--The term `science park' means 
                a group of interrelated companies and institutions, 
                including suppliers, service providers, institutions of 
                higher education, and trade associations that cooperate 
                as well as compete and are located in a specific area 
                approved by the Secretary and whose administration 
                promotes real estate development, technology transfer, 
                and partnerships between such companies and 
                institutions.''.
            (3) Effective date.--The amendments made this subsection 
        shall apply to any amount paid or incurred to an individual who 
        begins work for the employer after the date of the enactment of 
        this Act.
    (c) 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) Space 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.--The term `science park' means a group 
        of interrelated companies and institutions, including 
        suppliers, service providers, institutions of higher education, 
        and trade associations that cooperate as well as compete and 
        are located in a specific area approved by the Secretary and 
        whose administration promotes real estate development, 
        technology transfer, and partnerships between such companies 
        and institutions.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.
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