‘‘(A) has been convicted of a felony, or any
other criminal offense involving dishonesty or
breach of trust, or
‘‘(B) has been found civilly liable in dam-
ages, or has been permanently or temporarily
enjoined by an order, judgment, or decree of a
court of competent jurisdiction, by reason of
any act or practice involving fraud, or breach of
trust; and
‘‘(2) for any person continue to serve in any of
the capacities described in paragraph (1), if—
‘‘(A) the person is convicted of a felony, or
any other criminal offense involving dishonesty
or breach of trust, or
‘‘(B) the person is found civilly liable in
damages, or is permanently or temporarily en-
joined by an order, judgment, or decree of a
court of competent jurisdiction, by reason of
any act or practice involving fraud or breach of
trust.
‘‘SEC. 366. REMOVAL OR SUSPENSION OF DIRECTORS OR
OFFICERS.
‘‘Using the procedures for removing or suspending a
director or an officer of a licensee set forth in section 313
(to the extent such procedures are not inconsistent with
the requirements of this part), the Administration may re-
move or suspend any director or officer of any New Mar-
kets Venture Capital company.
‘‘SEC. 367. REGULATIONS.
‘‘The Administration may issue such regulations as
it deems necessary to carry out the provisions of this part
in accordance with its purposes.
‘‘SEC. 368. AUTHORIZATIONS OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—For fiscal years 2000 through
2005, the Administration is authorized to be appropriated,
to remain available until expended—
‘‘(1) such subsidy budget authority as may be
necessary to guarantee $150,000,000 of debentures
under this part; and
‘‘(2) $30,000,000 to make grants under this
part.
‘‘(b) FUNDS COLLECTED
FOR EXAMINATIONS.—
Funds deposited under section 362(c)(2) are authorized
to be appropriated only for the costs of examinations
under section 362 and for the costs of other oversight ac-
tivities with respect to the program established under this
part.’’.
SEC. 3. CONFORMING AMENDMENT.
Section 20(e)(1)(C) of the Small Business Act (15
U.S.C. 631 note) is amended by inserting ‘‘part A of’’ be-
fore ‘‘title III’’.
SEC. 4. CALCULATION OF MAXIMUM AMOUNT OF SBIC LE-
VERAGE.
(a) MAXIMUM LEVERAGE.—Section 303(b)(2) of the
Small Business Investment Act of 1958 (15 U.S.C.
683(b)(2)) is amended to read as follows:
‘‘(2) MAXIMUM LEVERAGE.—
‘‘(A) IN
GENERAL.—After March 31,
1993, the maximum amount of outstanding le-
verage made available to a company licensed
under section 301(c) of this Act shall be deter-
mined by the amount of such company’s private
capital—
‘‘(i) if the company has private capital
of not more than $15,000,000, the total
amount of leverage shall not exceed 300
percent of private capital;
‘‘(ii) if the company has private cap-
ital of more than $15,000,000 but not
more than $30,000,000, the total amount
of leverage shall not exceed $45,000,000
plus 200 percent of the amount of private
capital over $15,000,000; and
‘‘(iii) if the company has private cap-
ital of more than $30,000,000, the total
amount of leverage shall not exceed
$75,000,000 plus 100 percent of the
amount of private capital over $30,000,000
but 
not 
to 
exceed 
an 
additional
$15,000,000.
‘‘(B) ADJUSTMENTS.—
‘‘(i) 
IN
GENERAL.—The 
dollar
amounts in clauses (i), (ii), and (iii) of
subparagraph (A) shall be adjusted annu-
ally to reflect increases in the Consumer
Price Index established by the Bureau of
Labor Statistics of the Department of
Labor.
‘‘(ii) 
INITIAL
ADJUSTMENTS.—The
initial adjustments made under this sub-
paragraph after the date of enactment of
the Small Business Reauthorization Act of
1997 shall reflect only increases from
March 31, 1993.
‘‘(C) INVESTMENTS
IN
LOW- OR
MOD-
ERATE INCOME AREAS.—In calculating the out-
standing leverage of a company for the pur-
poses of subparagraph (A), the Administrator
shall not include the amount of the cost basis
of any equity investment made by the company
in a smaller enterprise located in a low- or mod-
erate-income geographic area (as defined in sec-
tion 351), to the extent that the total of such
amounts does not exceed 50 percent of the com-
pany’s private capital.’’.
(b) MAXIMUM
AGGREGATE
LEVERAGE.—Section
303(b)(4) of the Small Business Investment Act of 1958
(15 U.S.C. 683(b)(4)) is amended by adding at the end
the following new subparagraph:
‘‘(D) INVESTMENTS
IN
LOW- OR
MOD-
ERATE INCOME AREAS.—In calculating the ag-
gregate outstanding leverage of a company for
the purposes of subparagraph (A), the Adminis-
trator shall not include the amount of the cost
basis of any equity investment made by the
company in a smaller enterprise located in a
low- or moderate-income geographic area (as
defined in section 351), to the extent that the
total of such amounts does not exceed 50 per-
cent of the company’s private capital.’’.
SEC. 5. BANKRUPTCY EXEMPTION FOR NEW MARKETS VEN-
TURE CAPITAL COMPANIES.
Section 109(b)(2) of title 11, United States Code, is
amended by inserting ‘‘a New Markets Venture Capital
company as defined in section 351 of the Small Business
Investment Act of 1958,’’ after ‘‘homestead association,’’.
SEC. 6. FEDERAL SAVINGS ASSOCIATIONS.
Section 5(c)(4) of the Home Owners’ Loan Act (12
U.S.C. 1464(c)(4)) is amended by adding at the end the
following:
‘‘(F) NEW
MARKETS
VENTURE
CAPITAL
COMPANIES.—A Federal savings association
may invest in stock, obligations, or other securi-
ties of any New Markets Venture Capital com-
pany as defined in section 351 of the Small
Business Investment Act of 1958, except that a
Federal savings association may not make any
investment under this subparagraph if its ag-
gregate outstanding investment under this sub-
paragraph would exceed 5 percent of the capital
and surplus of such savings association.’’.
Union Calendar No. 452
106TH CONGRESS
2D SESSION
H. R. 4530
[Report No. 106–785]
A BILL
To amend the Small Business Investment Act of
1958 to direct the Administrator of the Small
Business Administration to establish a New Mar-
kets Venture Capital Program, and for other
purposes.
JULY 25, 2000
Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed