II 

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Science Park Adminis5 tration Act of 2004’’. 

6 SEC. 2. DEVELOPMENT OF SCIENCE PARKS. 

7 (a) FINDING.—Section 2 of the Stevenson-Wydler 

8 Technology Innovation Act of 1980 (15 U.S.C. 3701) is 

9 amended by adding at the end the following new para10 graph: 
2

•S 2737 IS 

1 ‘‘(12) It is in the best interests of the Nation 

2 to encourage the formation of science parks to pro3 mote the clustering of innovation through high tech4 nology activities.’’. 

5 (b) DEFINITION.—Section 4 of such Act (15 U.S.C. 

6 3703) is amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(14) ‘Science park’ means a group of inter9 related companies and institutions, including sup10 pliers, service providers, institutions of higher edu11 cation, and trade associations that cooperate as well 

12 as compete and are located in a specific area whose 

13 administration promotes real estate development, 

14 technology transfer, and partnerships between such 

15 companies and institutions.’’. 

16 (c) PROMOTION OF DEVELOPMENT OF SCIENCE

17 PARKS.—Section 5(c) of such Act (15 U.S.C. 3704(c)) is 

18 amended— 

19 (1) in paragraph (14), by striking ‘‘and’’ at the 

20 end; 

21 (2) in paragraph (15), by striking the period at 

22 the end and inserting ‘‘; and’’; and 

23 (3) by adding at the end the following new 

24 paragraph: 

25 ‘‘(16) promote the formation of science parks.’’. 
3

•S 2737 IS 

1 (d) SCIENCE PARKS.—Such Act is further amended 

2 by adding at the end the following new section: 

3 ‘‘SEC. 24. SCIENCE PARKS. 

4 ‘‘(a) DEVELOPMENT OF PLANS FOR CONSTRUCTION

5 OF SCIENCE PARKS.— 

6 ‘‘(1) IN GENERAL.—The Secretary shall award 

7 grants and enter into contracts and cooperative 

8 agreements for the development of plans for the con9 struction of science parks. 

10 ‘‘(2) LIMITATION ON AMOUNT OF GRANTS, CON11 TRACTS, OR AGREEMENTS.—The amount of a grant 

12 awarded, or contract or cooperative agreement en13 tered into, under this subsection may not exceed 

14 $500,000. 

15 ‘‘(3) AWARD OR ENTRY.— 

16 ‘‘(A) COMPETITION REQUIRED.—The Sec17 retary shall award any grant, or enter into any 

18 contract or cooperative agreement, for project 

19 under this subsection pursuant to a peer-re20 viewed competition. 

21 ‘‘(B) ADVERTISING.—The Secretary shall 

22 advertise any competition under this paragraph 

23 in the Commerce Business Daily. 

24 ‘‘(C) SELECTION CRITERIA.—The Sec25 retary shall publish the criteria to be utilized in 
4

•S 2737 IS 

1 any competition under this paragraph to select 

2 recipients of grants, or parties to contracts or 

3 cooperative agreements, under this subsection. 

4 Such criteria shall include requirements relating 

5 to— 

6 ‘‘(i) the number of jobs to be created 

7 at the science park each year for a period 

8 of 5 years; 

9 ‘‘(ii) the funding to be required to 

10 construct the science park over the first 5 

11 years; 

12 ‘‘(iii) the amount and type of cost 

13 matching by the applicant; 

14 ‘‘(iv) the types of businesses and re15 search entities expected in the science park 

16 over the first 5 years; 

17 ‘‘(v) letters of intent by businesses 

18 and research entities to locate in the 

19 science park; 

20 ‘‘(vi) the capacity of the science park 

21 for expansion over a period of 25 years; 

22 ‘‘(vii) the quality of life at the science 

23 park for employees at the science park; 

24 ‘‘(viii) the capability to attract a well 

25 trained workforce to the science park; 
5

•S 2737 IS 

1 ‘‘(ix) the management of the science 

2 park, including a business plan of the 

3 management entity to become self-suffi4 cient; 

5 ‘‘(x) expected risks in the construction 

6 and operation of the science park; 

7 ‘‘(xi) risk mitigation; 

8 ‘‘(xii) transportation and logistics; and 

9 ‘‘(xiii) physical infrastructure, includ10 ing telecommunications. 

11 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

12 There is authorized to be appropriated for each of 

13 fiscal years 2005 through 2010, $7,500,000 to carry 

14 out this subsection. 

15 ‘‘(b) REVOLVING LOAN PROGRAM FOR DEVELOP16 MENT OF SCIENCE PARK INFRASTRUCTURE.— 

17 ‘‘(1) IN GENERAL.—The Secretary shall make 

18 grants to six regional centers for the development of 

19 science park infrastructure through the operation of 

20 revolving loan funds by such centers. 

21 ‘‘(2) SELECTION OF CENTERS.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 select the regional centers to be awarded grants 

24 under this subsection utilizing such criteria as 

25 the Secretary shall prescribe.
6

•S 2737 IS 

1 ‘‘(B) CRITERIA.—The criteria prescribed 

2 by the Secretary under this paragraph shall in3 clude criteria relating to revolving loan funds 

4 and revolving loan fund operators under para5 graph (4), including— 

6 ‘‘(i) the qualifications of principal offi7 cers; 

8 ‘‘(ii) non-Federal cost matching re9 quirements; 

10 ‘‘(iii) auditing of loan funds according 

11 to Generally Accepted Accounting Prin12 ciples (GAAP); 

13 ‘‘(iv) conditions for the termination of 

14 loan funds; and 

15 ‘‘(v) annual reporting requirements. 

16 ‘‘(3) LIMITATION ON PROJECT AMOUNT.—The 

17 amount of any project for the development of science 

18 park infrastructure that is funded under this sub19 section may not exceed $1,000,000. 

20 ‘‘(4) REVOLVING LOAN FUNDS.— 

21 ‘‘(A) IN GENERAL.—A regional center re22 ceiving a grant under this subsection shall fund 

23 the development of science park infrastructure 

24 through the utilization of a revolving loan fund. 
7

•S 2737 IS 

1 ‘‘(B) OPERATION AND INTEGRITY.—The 

2 Secretary shall prescribe regulations to main3 tain the proper operation and financial integrity 

4 of revolving loan funds under this paragraph. 

5 ‘‘(C) EFFICIENT ADMINISTRATION.—The 

6 Secretary may— 

7 ‘‘(i) at the request of a grantee, 

8 amend and consolidate grant agreements 

9 governing revolving loan funds to provide 

10 flexibility with respect to lending areas and 

11 borrower criteria; 

12 ‘‘(ii) assign or transfer assets of a re13 volving loan fund to a third party for the 

14 purpose of liquidation, and a third party 

15 may retain assets of the fund to defray 

16 costs related to liquidation; and 

17 ‘‘(iii) take such actions as are appro18 priate to enable revolving loan fund opera19 tors to sell or securitize loans (except that 

20 the actions may not include issuance of a 

21 Federal guaranty by the Secretary). 

22 ‘‘(D) TREATMENT OF ACTIONS.—An action 

23 taken by the Secretary under this paragraph 

24 with respect to a revolving loan fund shall not 

25 constitute a new obligation if all grant funds 
8

•S 2737 IS 

1 associated with the original grant award have 

2 been disbursed to the recipient. 

3 ‘‘(E) PRESERVATION OF SECURITIES

4 LAWS.— 

5 ‘‘(i) NOT TREATED AS EXEMPTED SE6 CURITIES.—No securities issued pursuant 

7 to subparagraph (C)(iii) shall be treated as 

8 exempted securities for purposes of the Se9 curities Act of 1933 or the Securities Ex10 change Act of 1934, unless exempted by 

11 rule or regulation of the Securities and Ex12 change Commission. 

13 ‘‘(ii) PRESERVATION.—Except as pro14 vided in clause (I), no provision of this 

15 paragraph or any regulation issued by the 

16 Secretary under this paragraph shall su17 persede or otherwise affect the application 

18 of the securities laws (as such term is de19 fined in section 2(a)(47) of the Securities 

20 Exchange Act of 1934) or the rules, regu21 lations, or orders of the Securities and Ex22 change Commission or a self-regulatory or23 ganization thereunder. 

24 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—

25 There is authorized to be appropriated for each of 
9

•S 2737 IS 

1 fiscal years 2005 through 2010, $60,000,000 to 

2 carry out this subsection. 

3 ‘‘(c) LOAN GUARANTEES FOR SCIENCE PARK INFRA4 STRUCTURE.— 

5 ‘‘(1) IN GENERAL.—The Secretary shall guar6 antee loans for projects for the construction of 

7 science park infrastructure. 

8 ‘‘(2) LIMITATIONS ON GUARANTEE AMOUNTS.—

9 The maximum amount of loan principal guaranteed 

10 under this subsection may not exceed— 

11 ‘‘(A) $50,000,000 with respect to any sin12 gle project; and 

13 ‘‘(B) $1,000,000,000 with respect to all 

14 projects. 

15 ‘‘(3) SELECTION OF GUARANTEE RECIPI16 ENTS.—The Secretary shall select recipients of loan 

17 guarantees under this subsection utilizing such cri18 teria as the Secretary shall prescribe. 

19 ‘‘(4) OVERSIGHT.—The Comptroller General of 

20 the United States shall, on a biennial basis, conduct 

21 an audit of the loans guaranteed under this sub22 section, and shall submit to Congress a report on 

23 each audit conducted under this paragraph. 
10

•S 2737 IS 

1 ‘‘(5) TERMINATION.—No loan may be guaran2 teed under this subsection after September 30, 

3 2010. 

4 ‘‘(6) AUTHORIZATION OF APPROPRIATIONS.—

5 There is authorized to be appropriated 

6 $1,000,000,000 for the cost, as defined in section 

7 502(5) of the Federal Credit Reform Act of 1990, 

8 of loans guaranteed under this subsection. 

9 ‘‘(d) NATIONAL ACADEMY OF SCIENCES EVALUA10 TION OF SCIENCE PARK DEVELOPMENT.— 

11 ‘‘(1) IN GENERAL.—The Secretary shall enter 

12 into an agreement with the National Academy of 

13 Sciences under which the Academy shall evaluate, on 

14 an annual basis, the development of science parks 

15 pursuant to activities under this section. 

16 ‘‘(2) ANNUAL REPORT.—Under the agreement 

17 under paragraph (1), the Academy shall submit to 

18 the Secretary each year a report on its evaluation of 

19 science park development under that paragraph. 

20 Each report may include such recommendations as 

21 the Academy considers appropriate for additional ac22 tivities to promote and facilitate the development of 

23 science parks in the United States. 

24 ‘‘(e) ANNUAL REPORT.—Not later than March 31 

25 each year, the Secretary shall submit to Congress a report
11

•S 2737 IS 

1 on the activities under this section during the preceding 

2 year, including the results of any audit by the Comptroller 

3 General under subsection (c)(4) during such year and any 

4 recommendations made by the National Academy of 

5 Sciences under subsection (d)(2) during such year. Each 

6 report may include such recommendations for legislative 

7 or administrative action as the Secretary considers appro8 priate to further promote and facilitate the development 

9 of science parks in the United States. 

10 ‘‘(f) REGULATIONS.— 

11 ‘‘(1) REGULATIONS.—The Secretary shall pre12 scribe regulations to carry out this section. 

13 ‘‘(2) DEADLINE.—The Secretary shall prescribe 

14 such regulations not later than one year after the 

15 date of the enactment of the Science Park Adminis16 tration Act of 2004.’’. 

17 SEC. 3. SCIENCE PARK VENTURE CAPITAL FUND PILOT 

18 PROGRAM. 

19 Title III of the Small Business Investment Act of 

20 1958 (15 U.S.C. 681 et seq.) is amended by adding at 

21 the end the following: 
12

•S 2737 IS 

1 ‘‘PART C—SCIENCE PARK VENTURE CAPITAL 

2 FUND PILOT PROGRAM 

3 ‘‘SEC. 371. DEFINITIONS. 

4 ‘‘As used in this part, the following definitions shall 

5 apply: 

6 ‘‘(1) EQUITY CAPITAL.—The term ‘equity cap7 ital’ means common or preferred stock or a similar 

8 instrument, including subordinated debt with equity 

9 features. 

10 ‘‘(2) HIGH-TECHNOLOGY.—The term ‘high11 technology’ means any of the high technology indus12 tries in the North American Industrial Classification 

13 System, as listed in table 8–25 of the National 

14 Science Board publication entitled ‘Science and En15 gineering Indicators 2004’. 

16 ‘‘(3) LEVERAGE.—The term ‘leverage’ in17 cludes— 

18 ‘‘(A) debentures purchased or guaranteed 

19 by the Administrator; 

20 ‘‘(B) participating securities purchased or 

21 guaranteed by the Administrator; and 

22 ‘‘(C) preferred securities outstanding as of 

23 the date of enactment of this part. 

24 ‘‘(4) MEZZANINE FINANCING.—The term ‘mez25 zanine financing’ means late-stage venture capital 
13

•S 2737 IS 

1 usually associated with the final round of financing 

2 prior to an initial public offering. 

3 ‘‘(5) OPERATIONAL ASSISTANCE.—The term 

4 ‘operational assistance’ means management, mar5 keting, and other technical assistance that assists 

6 high-technology start-up companies with business 

7 development. 

8 ‘‘(6) PARTICIPATION AGREEMENT.—The term 

9 ‘participation agreement’ means an agreement, be10 tween the Administrator and a company granted 

11 final approval by the Administrator under section 

12 374(e), that— 

13 ‘‘(A) details the operating plan and invest14 ment criteria of the company; and 

15 ‘‘(B) requires the company to make invest16 ments in high-technology start-up companies 

17 within a science park. 

18 ‘‘(7) PRIVATE CAPITAL.—The term ‘private 

19 capital’— 

20 ‘‘(A) means the total of— 

21 ‘‘(i)(I) the paid-in capital and paid-in 

22 surplus of a corporate science park venture 

23 capital company; 
14

•S 2737 IS 

1 ‘‘(II) the contributed capital of the 

2 partners of a partnership science park ven3 ture capital company; or 

4 ‘‘(III) the equity investment of the 

5 members of a limited liability company 

6 science park venture capital company; and 

7 ‘‘(ii) unfunded binding commitments 

8 from investors that meet criteria estab9 lished by the Administrator to contribute 

10 capital to the science park venture capital 

11 company, except that— 

12 ‘‘(I) unfunded commitments may 

13 be counted as private capital for pur14 poses of approval by the Adminis15 trator of any request for leverage; and 

16 ‘‘(II) leverage shall not be funded 

17 based on the commitments; and 

18 ‘‘(B) does not include— 

19 ‘‘(i) any funds borrowed by a science 

20 park venture capital company from any 

21 source; 

22 ‘‘(ii) any funds obtained through the 

23 issuance of leverage; or
15

•S 2737 IS 

1 ‘‘(iii) any funds obtained directly or 

2 indirectly from Federal, State, or local gov3 ernment, except for— 

4 ‘‘(I) funds obtained from the 

5 business revenues of any federally 

6 chartered or government-sponsored 

7 enterprise established before the date 

8 of enactment of this part; 

9 ‘‘(II) funds invested by an em10 ployee welfare benefit plan or pension 

11 plan; and 

12 ‘‘(III) any qualified nonprivate 

13 funds, if the investors of such funds 

14 do not directly or indirectly control 

15 the management, board of directors, 

16 general partners, or members of the 

17 science park venture capital company. 

18 ‘‘(8) PROGRAM.—The term ‘Program’ means 

19 the Science Park Venture Capital Program estab20 lished under section 372. 

21 ‘‘(9) QUALIFIED NONPRIVATE FUNDS.—The 

22 term ‘qualified nonprivate funds’ means— 

23 ‘‘(A) any funds directly or indirectly in24 vested in any applicant or science park venture 

25 capital company on or before the date of enact-
16

•S 2737 IS 

1 ment of this part, by any Federal agency other 

2 than the Administration, under a law explicitly 

3 mandating the inclusion of those funds in the 

4 definition of the term private capital; and 

5 ‘‘(B) any funds invested in any applicant 

6 or science park venture capital company by 1 or 

7 more entities of any State, including any guar8 antee extended by any such entity, in an aggre9 gate amount not to exceed 33 percent of the 

10 private capital of the applicant or science park 

11 venture capital company. 

12 ‘‘(10) SCIENCE PARK.—The term ‘science park’ 

13 means a group of interrelated companies and institu14 tions, including suppliers, service providers, institu15 tions of higher education, and trade associations 

16 that cooperate as well as compete and are located in 

17 a specific area whose administration promotes real 

18 estate development, technology transfer, and part19 nerships between such companies and institutions. 

20 ‘‘(11) SCIENCE PARK VENTURE CAPITAL.—The 

21 term ‘science park venture capital’ means equity 

22 capital investments in high-technology start-up busi23 nesses located in science parks to foster economic 

24 development and technological innovation. 
17

•S 2737 IS 

1 ‘‘(12) SCIENCE PARK VENTURE CAPITAL COM2 PANY.—The term ‘science park venture capital com3 pany’ means a company that— 

4 ‘‘(A) meets the requirements under section 

5 373; 

6 ‘‘(B) has been granted final approval by 

7 the Administrator under section 374(e); and 

8 ‘‘(C) has entered into a participation 

9 agreement with the Administrator. 

10 ‘‘(13) START-UP COMPANY.—The term ‘start-up 

11 company’ means a company that has developed intel12 lectual property protection of research and develop13 ment, but has not reached the stage associated with 

14 mezzanine financing. 

15 ‘‘(14) STATE.—The term ‘State’ means each of 

16 the several States of the United States, the District 

17 of Columbia, the Commonwealth of Puerto Rico, the 

18 Virgin Islands, Guam, American Samoa, the Com19 monwealth of the Northern Mariana Islands, and 

20 any other commonwealth, territory, or possession of 

21 the United States. 

22 ‘‘SEC. 372. ESTABLISHMENT. 

23 ‘‘There is established a Science Park Venture Capital 

24 Program, under which the Administrator may— 
18

•S 2737 IS 

1 ‘‘(1) enter into participation agreements with 

2 companies granted final approval under section 

3 373(e); 

4 ‘‘(2) guarantee the debentures issued by science 

5 park venture capital companies under section 374; 

6 and 

7 ‘‘(3) award grants to science park venture cap8 ital companies under section 376. 

9 ‘‘SEC. 373. REQUIREMENTS FOR SCIENCE PARK VENTURE 

10 CAPITAL COMPANIES. 

11 ‘‘(a) ORGANIZATION.—For purposes of this part, a 

12 science park venture capital company— 

13 ‘‘(1) shall be an incorporated body, a limited li14 ability company, or a limited partnership organized 

15 and chartered, or otherwise existing under State law 

16 solely for the purpose of performing the functions 

17 and conducting the activities authorized by this part; 

18 ‘‘(2) if incorporated, shall have succession for a 

19 period of not less than 30 years unless earlier dis20 solved by the shareholders of the company; 

21 ‘‘(3) if a limited partnership or a limited liabil22 ity company, shall have succession for a period of 

23 not less than 10 years; and 
19

•S 2737 IS 

1 ‘‘(4) shall possess the powers reasonably nec2 essary to perform the functions and conduct the ac3 tivities. 

4 ‘‘(b) ARTICLES.—The articles of any science park 

5 venture capital company— 

6 ‘‘(1) shall specify in general terms— 

7 ‘‘(A) the purposes for which the company 

8 is formed; 

9 ‘‘(B) the name of the company; 

10 ‘‘(C) the area or areas in which the oper11 ations of the company are to be carried out; 

12 ‘‘(D) the place where the principal office of 

13 the company is to be located; and 

14 ‘‘(E) the amount and classes of the shares 

15 of capital stock of the company; 

16 ‘‘(2) may contain any other provisions con17 sistent with this part that the science park venture 

18 capital company may determine to be appropriate to 

19 adopt for the regulation of the business of the com20 pany and the conduct of the affairs of the company; 

21 and 

22 ‘‘(3) shall be subject to the approval of the Ad23 ministrator. 

24 ‘‘(c) CAPITAL REQUIREMENTS.—
20

•S 2737 IS 

1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), the private capital of each science park 

3 venture capital company shall be not less than— 

4 ‘‘(A) $5,000,000; or 

5 ‘‘(B) $10,000,000, with respect to each 

6 science park venture capital company author7 ized or seeking authority to issue participating 

8 securities to be purchased or guaranteed by the 

9 Administrator under this part. 

10 ‘‘(2) EXCEPTION.—The Secretary may, in the 

11 discretion of the Administrator, and based on a 

12 showing of special circumstances and good cause, 

13 permit the private capital of science park venture 

14 capital company described in paragraph (1)(B) to be 

15 less than $10,000,000, but not less than 

16 $5,000,000, if the Administrator determines that the 

17 action would not create or otherwise contribute to an 

18 unreasonable risk of default or loss to the Federal 

19 Government. 

20 ‘‘(3) ADEQUACY.—In addition to the require21 ments under paragraph (1), the Administrator 

22 shall— 

23 ‘‘(A) determine whether the private capital 

24 of each science park venture capital company is 

25 adequate to ensure a reasonable prospect that 
21

•S 2737 IS 

1 the company will be operated soundly and prof2 itably, and managed actively and prudently in 

3 accordance with the articles of the company; 

4 ‘‘(B) determine that the science park ven5 ture capital company will be able to comply 

6 with the requirements of this part; 

7 ‘‘(C) ensure that the science park venture 

8 capital company is designed primarily to meet 

9 equity capital needs of the businesses in which 

10 the company invests and not to compete with 

11 traditional financing by commercial lenders of 

12 high-technology startup businesses; and 

13 ‘‘(D) require that the science park venture 

14 capital company makes short-term non-equity 

15 investments of less than 5 years only to the ex16 tent necessary to preserve an existing invest17 ment. 

18 ‘‘(d) DIVERSIFICATION OF OWNERSHIP.—The Ad19 ministrator shall ensure that the management of each 

20 science park venture capital company licensed after the 

21 date of enactment of this part is sufficiently diversified 

22 from, and unaffiliated with, the ownership of the company 

23 so as to ensure independence and objectivity in the finan24 cial management and oversight of the investments and op25 erations of the company. 
22

•S 2737 IS 

1 ‘‘SEC. 374. SELECTION OF SCIENCE PARK VENTURE CAP2 ITAL COMPANIES. 

3 ‘‘(a) ELIGIBILITY.—A company is eligible to partici4 pate as a science park venture capital company in the Pro5 gram if the company— 

6 ‘‘(1) is a newly formed for-profit entity or a 

7 newly formed for-profit subsidiary of an existing en8 tity; 

9 ‘‘(2) has a management team in the science 

10 park with experience in development financing or 

11 relevant venture capital financing; and 

12 ‘‘(3) has a primary objective of economic devel13 opment of the science park and its surrounding geo14 graphic area. 

15 ‘‘(b) APPLICATION.—Any eligible company that de16 sires to participate as a science park venture capital com17 pany in the Program shall submit an application to the 

18 Administrator, which shall include— 

19 ‘‘(1) a business plan describing how the com20 pany intends to make successful venture capital in21 vestments in start up companies within the science 

22 park; 

23 ‘‘(2) a description of the qualifications and gen24 eral reputation of the management of the company; 
23

•S 2737 IS 

1 ‘‘(3) an estimate of the ratio of cash to in-kind 

2 contributions of binding commitments to be made to 

3 the company under the Program; 

4 ‘‘(4) a description of the criteria to be used to 

5 evaluate whether, and to what extent, the company 

6 meets the objectives of the Program; 

7 ‘‘(5) information regarding the management 

8 and financial strength of any parent firm, affiliated 

9 firm, or other firm essential to the success of the 

10 business plan of the company; and 

11 ‘‘(6) such other information as the Adminis12 trator may require. 

13 ‘‘(c) STATUS.—Not later than 90 days after the ini14 tial receipt by the Administrator of an application under 

15 this section, the Administrator shall provide to the appli16 cant a written report that describes the status of the appli17 cants and any requirements remaining for completion of 

18 the application. 

19 ‘‘(d) MATTERS CONSIDERED.—In reviewing and 

20 processing any application under this section, the Admin21 istrator— 

22 ‘‘(1) shall determine if— 

23 ‘‘(A) the applicant meets the requirements 

24 under subsection (e); and 
24

•S 2737 IS 

1 ‘‘(B) the management of the applicant is 

2 qualified and has the knowledge, experience, 

3 and capability necessary to comply with this 

4 part; 

5 ‘‘(2) shall take into consideration— 

6 ‘‘(A) the need for and availability of fi7 nancing for high-technology start-up companies 

8 in the science park in which the applicant is to 

9 commence business; 

10 ‘‘(B) the general business reputation of the 

11 owners and management of the applicant; and 

12 ‘‘(C) the probability of successful oper13 ations of the applicant, including adequate prof14 itability and financial soundness; and 

15 ‘‘(3) shall not take into consideration any pro16 jected shortage or unavailability of grant funds or le17 verage. 

18 ‘‘(e) APPROVAL; LICENSE.—The Administrator may 

19 approve an applicant to operate as a science park venture 

20 capital company under this part and license the applicant 

21 as a science park venture capital company, if— 

22 ‘‘(1) the Administrator determines that the ap23 plication satisfies the requirements under subsection 

24 (b); 

25 ‘‘(2) the Administrator approves—
25

•S 2737 IS 

1 ‘‘(A) the area in which the science park 

2 venture capital company is to conduct its oper3 ations; and 

4 ‘‘(B) the establishment of branch offices or 

5 agencies (if authorized by the articles); and 

6 ‘‘(3) the applicant enters into a participation 

7 agreement with the Administrator. 

8 ‘‘SEC. 375. DEBENTURES. 

9 ‘‘(a) GUARANTEES.—The Administrator may guar10 antee the timely payment of principal and interest, as 

11 scheduled, on debentures issued by any science park ven12 ture capital company. 

13 ‘‘(b) TERMS AND CONDITIONS.—The Administrator 

14 may make guarantees under this section on such terms 

15 and conditions as the Administrator determines to be ap16 propriate, except that the term of any debenture guaran17 teed under this section shall not exceed 15 years. 

18 ‘‘(c) FULL FAITH AND CREDIT OF THE UNITED

19 STATES.—The full faith and credit of the United States 

20 is pledged to pay all amounts that may be required to be 

21 paid under any guarantee under this part. 

22 ‘‘(d) MAXIMUM GUARANTEE.—The Administrator 

23 may— 

24 ‘‘(1) guarantee the debentures issued by a 

25 science park venture capital company only to the ex-
26

•S 2737 IS 

1 tent that the total face amount of outstanding guar2 anteed debentures of such company does not exceed 

3 the lesser of— 

4 ‘‘(A) 300 percent of the private capital of 

5 the company, or 

6 ‘‘(B) $100,000,000; and 

7 ‘‘(2) provide for the use of discounted deben8 tures. 

9 ‘‘SEC. 376. ISSUANCE AND GUARANTEE OF TRUST CERTIFI10 CATES. 

11 ‘‘(a) ISSUANCE.—The Administrator may issue trust 

12 certificates representing ownership of all or a part of de13 bentures issued by a science park venture capital company 

14 and guaranteed by the Administrator under this part, if 

15 such certificates are based on and backed by a trust or 

16 pool approved by the Administrator and composed solely 

17 of guaranteed debentures. 

18 ‘‘(b) GUARANTEE.— 

19 ‘‘(1) IN GENERAL.—The Administrator may, 

20 under such terms and conditions as it deems appro21 priate, guarantee the timely payment of the principal 

22 of and interest on trust certificates issued by the 

23 Administrator or its agents for purposes of this sec24 tion. 
27

•S 2737 IS 

1 ‘‘(2) LIMITATION.—Each guarantee under this 

2 subsection shall be limited to the extent of principal 

3 and interest on the guaranteed debentures that com4 pose the trust or pool. 

5 ‘‘(3) PREPAYMENT OR DEFAULT.— 

6 ‘‘(A) IN GENERAL.—In the event that a 

7 debenture in a trust or pool is prepaid, or in 

8 the event of default of such a debenture, the 

9 guarantee of timely payment of principal and 

10 interest on the trust certificates shall be re11 duced in proportion to the amount of principal 

12 and interest such prepaid debenture represents 

13 in the trust or pool. 

14 ‘‘(B) INTEREST.—Interest on prepaid or 

15 defaulted debentures shall accrue and be guar16 anteed by the Administrator only through the 

17 date of payment of the guarantee. 

18 ‘‘(C) REDEMPTION.—At any time during 

19 its term, a trust certificate may be called for re20 demption due to prepayment or default of all 

21 debentures. 

22 ‘‘(c) FULL FAITH AND CREDIT.—The full faith and 

23 credit of the United States is pledged to pay all amounts 

24 that may be required to be paid under any guarantee of 
28

•S 2737 IS 

1 a trust certificate issued by the Administrator or its 

2 agents under this section. 

3 ‘‘(d) SUBROGATION AND OWNERSHIP RIGHTS.— 

4 ‘‘(1) SUBROGATION.—If the Administrator pays 

5 a claim under a guarantee issued under this section, 

6 it shall be subrogated fully to the rights satisfied by 

7 such payment. 

8 ‘‘(2) OWNERSHIP RIGHTS.—No provision of 

9 Federal, State, or local law shall preclude or limit 

10 the exercise by the Administrator of its ownership 

11 rights in the debentures residing in a trust or pool 

12 against which 1 or more trust certificates are issued 

13 under this section. 

14 ‘‘(e) MANAGEMENT AND ADMINISTRATION.— 

15 ‘‘(1) REGISTRATION.—The Administrator may 

16 provide for a central registration of all trust certifi17 cates issued under this section. 

18 ‘‘(2) CONTRACTING OF FUNCTIONS.— 

19 ‘‘(A) IN GENERAL.—Notwithstanding any 

20 other provision of law, the Administrator may 

21 contract with an agent or agents to carry out 

22 on behalf of the Administrator the pooling and 

23 the central registration functions provided for 

24 in this section, including— 
29

•S 2737 IS 

1 ‘‘(i) maintenance, on behalf of and 

2 under the direction of the Administrator, 

3 of such commercial bank accounts or in4 vestments in obligations of the United 

5 States as may be necessary to facilitate the 

6 creation of trusts or pools backed by de7 bentures guaranteed under this part; and 

8 ‘‘(ii) the issuance of trust certificates 

9 to facilitate the creation of such trusts or 

10 pools. 

11 ‘‘(B) FIDELITY BOND OR INSURANCE RE12 QUIREMENT.—Any agent performing functions 

13 on behalf of the Administrator under this para14 graph shall provide a fidelity bond or insurance 

15 in such amounts as the Administrator deter16 mines necessary to fully protect the interests of 

17 the United States. 

18 ‘‘(C) REGULATION OF BROKERS AND

19 DEALERS.—The Administrator may regulate 

20 brokers and dealers in trust certificates issued 

21 under this section. 

22 ‘‘(D) ELECTRONIC REGISTRATION.—Noth23 ing in this subsection may be construed to pro24 hibit the use of a book entry or other electronic 
30

•S 2737 IS 

1 form of registration for trust certificates issued 

2 under this section.

3 ‘‘SEC. 377. OPERATIONAL ASSISTANCE GRANTS. 

4 ‘‘(a) IN GENERAL.— 

5 ‘‘(1) GRANTS AUTHORIZED.—The Adminis6 trator may award grants to science park venture 

7 capital companies and other entities to provide oper8 ational assistance to high-technology start-up com9 panies financed, or expected to be financed, by such 

10 companies. 

11 ‘‘(2) TERMS.—Grants under this subsection 

12 shall be made over a period not to exceed 10 years, 

13 under such other terms as the Administrator may 

14 require. 

15 ‘‘(3) GRANT AMOUNT.—Each grant awarded 

16 under this subsection shall be equal to the lesser 

17 of— 

18 ‘‘(A) 10 percent of the private capital 

19 raised by the science park venture capital com20 pany; or 

21 ‘‘(B) $1,000,000. 

22 ‘‘(4) OTHER ENTITIES.—The amount of a 

23 grant made under this subsection to any entity other 

24 than a science park venture capital company shall be 

25 equal to the resources (in cash or in kind) raised by 
31

•S 2737 IS 

1 the entity in accordance with the requirements appli2 cable to science park venture capital companies 

3 under this part. 

4 ‘‘(b) SUPPLEMENTAL GRANTS.— 

5 ‘‘(1) IN GENERAL.—The Administrator may 

6 award supplemental grants to science park venture 

7 capital companies and other entities, under such 

8 terms as the Administrator may require, to provide 

9 additional operational assistance to start-up compa10 nies financed, or expected to be financed, by such 

11 companies or entities. 

12 ‘‘(2) MATCHING REQUIREMENT.—The Adminis13 trator may require, as a condition of any supple14 mental grant made under this subsection, that the 

15 company or entity receiving the grant provide a 

16 matching contribution equal to the amount of the 

17 supplemental grant from non-Federal cash or in18 kind resources. 

19 ‘‘(c) LIMITATION.—None of the assistance made 

20 available under this section may be used for any overhead 

21 or general and administrative expense of a science park 

22 venture capital company or other entity. 

23 ‘‘SEC. 378. REPORTING REQUIREMENTS. 

24 ‘‘(a) SCIENCE PARK VENTURE CAPITAL COMPA25 NIES.—Each science park venture capital company shall 
32

•S 2737 IS 

1 provide the Administrator with such information as the 

2 Administrator may require, including information relating 

3 to the criteria described in section 374(b)(4). 

4 ‘‘(b) PUBLIC REPORTS.— 

5 ‘‘(1) IN GENERAL.—The Administrator shall 

6 prepare and make available to the public an annual 

7 report on the Program, which shall include detailed 

8 information on— 

9 ‘‘(A) the number of science park venture 

10 capital companies licensed by the Administrator 

11 during the previous fiscal year; 

12 ‘‘(B) the aggregate amount of leverage 

13 that science park venture capital companies 

14 have received from the Federal Government 

15 during the previous fiscal year; 

16 ‘‘(C) the aggregate number of each type of 

17 leveraged instruments used by science park ven18 ture capital companies during the previous fis19 cal year, and how each such number compares 

20 to the number in previous fiscal years; 

21 ‘‘(D) for the previous fiscal year, the num22 ber of— 

23 ‘‘(i) science park venture capital com24 pany licenses surrendered; and 
33

•S 2737 IS 

1 ‘‘(ii) the number of science park ven2 ture capital companies placed in liquida3 tion; 

4 ‘‘(E) the amount and type of leverage each 

5 such company has received from the Federal 

6 Government; 

7 ‘‘(F) the amount of losses sustained by the 

8 Federal Government as a result of operations 

9 under this part during the previous fiscal year 

10 and an estimate of the total losses that the 

11 Federal Government can reasonably expect to 

12 incur as a result of the operations during the 

13 current fiscal year; 

14 ‘‘(G) actions taken by the Administrator to 

15 maximize recoupment of funds of the Federal 

16 Government expended to implement and admin17 ister the Program during the previous fiscal 

18 year and to ensure compliance with the require19 ments of this part, including implementing reg20 ulations; 

21 ‘‘(H) the amount of Federal Government 

22 leverage that each licensee received in the pre23 vious fiscal year and the types of leverage in24 struments used by each licensee;
34

•S 2737 IS 

1 ‘‘(I) for each type of financing instrument, 

2 the sizes, types of geographic locations, and 

3 other characteristics of the small business in4 vestment companies using the instrument dur5 ing the previous fiscal year, including the extent 

6 to which the investment companies have used 

7 the leverage from each instrument to make 

8 loans or equity investments in science parks; 

9 and 

10 ‘‘(J) the actions of the Administrator to 

11 carry out this part. 

12 ‘‘(2) PROHIBITION.—In compiling the report re13 quired under paragraph (1), the Administrator may 

14 not— 

15 ‘‘(A) compile the report in a manner that 

16 permits identification of any particular type of 

17 investment by an individual science park ven18 ture capital company in which a science park 

19 venture capital company invests; or 

20 ‘‘(B) release any information that is pro21 hibited under section 1905 of title 18, United 

22 States Code. 

23 ‘‘SEC. 379. EXAMINATIONS. 

24 ‘‘(a) IN GENERAL.—Each science park venture cap25 ital company that participates in the Program shall be 
35

•S 2737 IS 

1 subject to examinations made at the direction of the Ad2 ministrator, in accordance with this section. 

3 ‘‘(b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—

4 An examination under this section may be conducted with 

5 the assistance of a private sector entity that has the quali6 fications and expertise necessary to conduct such an exam7 ination. 

8 ‘‘(c) COSTS.—

9 ‘‘(1) IN GENERAL.—The Administrator may as10 sess the cost of an examination under this section, 

11 including compensation of the examiners, against the 

12 science park venture capital company examined. 

13 ‘‘(2) PAYMENT.—Any science park venture cap14 ital company against which the Administrator as15 sesses costs under this subsection shall pay the costs 

16 assessed. 

17 ‘‘(d) DEPOSIT OF FUNDS.—Funds collected under 

18 this section— 

19 ‘‘(1) shall be deposited in the account that in20 curred the costs for carrying out this section; 

21 ‘‘(2) shall be made available to the Adminis22 trator to carry out this section, without further ap23 propriation; and 

24 ‘‘(3) shall remain available until expended. 
36

•S 2737 IS 

1 ‘‘SEC. 380. BANK PARTICIPATION. 

2 ‘‘(a) IN GENERAL.—Except as provided under sub3 section (b), any national bank, any member bank of the 

4 Federal Reserve System, and, to the extent permitted 

5 under applicable State law, any insured bank that is not 

6 a member of such system, may invest in— 

7 ‘‘(1) any science park venture capital company; 

8 or 

9 ‘‘(2) any entity established to invest solely in 

10 science park venture capital companies. 

11 ‘‘(b) LIMITATION.—No bank described in subsection 

12 (a) may make investments described in that subsection 

13 that are greater than 5 percent of the capital and surplus 

14 of the bank. 

15 ‘‘SEC. 381. FEES. 

16 ‘‘(a) IN GENERAL.—Except as provided under sub17 section (b), the Administrator may charge such fees as 

18 it determines to be appropriate with respect to any guar19 antee or grant issued under this part. 

20 ‘‘(b) EXCEPTION.—The Administrator shall not col21 lect a fee for any guarantee of a trust certificate under 

22 this section. Any agent of the Administrator may collect 

23 a fee, upon the approval of the Administrator, for the 

24 functions described in section 376(e)(2). 
37

•S 2737 IS 

1 ‘‘SEC. 382. APPLICABLE LAW. 

2 ‘‘(a) IN GENERAL.—The provisions relating to New 

3 Market Venture Capital companies under sections 361 

4 through section 366 shall apply to science park venture 

5 capital companies. 

6 ‘‘(b) PURCHASE OF GUARANTEED OBLIGATIONS.—

7 Section 318 shall not apply to any debenture issued by 

8 a science park venture capital company under this part. 

9 ‘‘SEC. 383. REGULATIONS. 

10 ‘‘Not later than 12 months after the date of enact11 ment of this part, the Administrator shall issue such regu12 lations as it determines necessary to carry out this part. 

13 ‘‘SEC. 384. AUTHORIZATIONS OF APPROPRIATIONS. 

14 ‘‘(a) IN GENERAL.—There are authorized to be ap15 propriated to the Administration for each of the fiscal 

16 years 2005 through 2010, to remain available until ex17 pended— 

18 ‘‘(1) such subsidy budget authority as may be 

19 necessary to guarantee $1,000,000,000 of deben20 tures under this part; and 

21 ‘‘(2) $50,000,000 to make grants under this 

22 part. 

23 ‘‘(b) FUNDS COLLECTED FOR EXAMINATIONS.—

24 Funds deposited pursuant to section 362(d) may only be 

25 used for— 

26 ‘‘(1) examinations under section 362; and 
38

•S 2737 IS 

1 ‘‘(2) other oversight activities of the Program.’’.

2 SEC. 4. TAX INCENTIVES FOR INVESTMENT IN SCIENCE 

3 PARKS. 

4 (a) EXPENSING.— 

5 (1) IN GENERAL.—Section 179(d) of the Inter6 nal Revenue Code of 1986 (relating to definitions 

7 and special rules) is amended by adding at the end 

8 the following new paragraph: 

9 ‘‘(11) APPLICATION OF SECTION TO PROPERTY

10 PLACED IN SERVICE IN SCIENCE PARKS.— 

11 ‘‘(A) IN GENERAL.—In the case of any sec12 tion 179 property placed in service in any 

13 science park, this section shall be applied with14 out regard to paragraphs (1) and (2) of sub15 section (b). 

16 ‘‘(B) SCIENCE PARK.—The term ‘science 

17 park’ means a group of interrelated companies 

18 and institutions, including suppliers, service 

19 providers, institutions of higher education, and 

20 trade associations that cooperate as well as 

21 compete and are located in a specific area ap22 proved by the Secretary and whose administra23 tion promotes real estate development, tech24 nology transfer, and partnerships between such 

25 companies and institutions.’’. 
39

•S 2737 IS 

1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall apply with respect to prop3 erty placed in service after the date of the enactment 

4 of this Act. 

5 (b) WAGE CREDIT.— 

6 (1) MEMBER OF TARGETED GROUP.—Section 

7 51(d)(1) of the Internal Revenue Code of 1986 (de8 fining members of targeted groups) is amended by 

9 striking ‘‘or’’ at the end of subparagraph (G), by 

10 striking the period at the end of subparagraph (H) 

11 and inserting ‘‘, or’’, and by adding at the end the 

12 following new subparagraph: 

13 ‘‘(I) a science park employee.’’. 

14 (2) SCIENCE PARK EMPLOYEE.—Section 51(d) 

15 of such Code is amended by adding at the end the 

16 following new paragraph: 

17 ‘‘(13) SCIENCE PARK EMPLOYEE.— 

18 ‘‘(A) IN GENERAL.—The term ‘science 

19 park employee’ means, with respect to any pe20 riod, any employee of any trade or business lo21 cated in a science park if substantially all the 

22 services performed during such period by such 

23 employee for such business are performed in 

24 such science park. 
40

•S 2737 IS 

1 ‘‘(B) SCIENCE PARK.—The term ‘science 

2 park’ means a group of interrelated companies 

3 and institutions, including suppliers, service 

4 providers, institutions of higher education, and 

5 trade associations that cooperate as well as 

6 compete and are located in a specific area ap7 proved by the Secretary and whose administra8 tion promotes real estate development, tech9 nology transfer, and partnerships between such 

10 companies and institutions.’’. 

11 (3) EFFECTIVE DATE.—The amendments made 

12 this subsection shall apply to any amount paid or in13 curred to an individual who begins work for the em14 ployer after the date of the enactment of this Act. 

15 (c) TAX CREDIT FOR RESEARCH ACTIVITIES.— 

16 (1) IN GENERAL.—Section 41(a) of the Internal 

17 Revenue Code of 1986 (relating to credit for increas18 ing research activities) is amended by striking ‘‘and’’ 

19 at the end of paragraph (1)(B), by striking the pe20 riod at the end of paragraph (2) and inserting ‘‘, 

21 and’’, and by adding at the end the following new 

22 paragraph: 

23 ‘‘(3) 20 percent of the qualified research ex24 penses paid or incurred by the taxpayer during the 
41

•S 2737 IS 

1 taxable year in carrying on any trade or business lo2 cated in a science park.’’. 

3 (2) SPACE PARK.—Section 41(f) of such Code 

4 (relating to special rules) is amended by adding at 

5 the end the following new paragraph: 

6 ‘‘(6) SCIENCE PARK.—The term ‘science park’ 

7 means a group of interrelated companies and institu8 tions, including suppliers, service providers, institu9 tions of higher education, and trade associations 

10 that cooperate as well as compete and are located in 

11 a specific area approved by the Secretary and whose 

12 administration promotes real estate development, 

13 technology transfer, and partnerships between such 

14 companies and institutions.’’. 

15 (3) EFFECTIVE DATE.—The amendments made 

16 by this subsection shall apply to taxable years begin17 ning after the date of the enactment of this Act.

Æ