section, including compensation of the exam-
iners, against the company examined.
‘‘(B) DEPOSIT
OF
FUNDS.—Funds col-
lected under this section shall be deposited in
the account for salaries and expenses of the Ad-
ministration.
‘‘(C) 
AUTHORIZATION
OF
APPROPRIA-
TIONS.—Funds deposited under subparagraph
(B) are authorized to be appropriated solely to
cover the costs of examinations and other pro-
gram oversight activities.
‘‘SEC. 362. INJUNCTIONS AND OTHER ORDERS.
‘‘(a) IN GENERAL.— Whenever, in the Administrator
considers that a New Markets Venture Capital company,
or any other person, has engaged or is about to engage
in any acts or practices which constitute, or will constitute,
a violation of any provision of this Act, of any rule or regu-
lation under this Act, or of any order issued under this
Act, the Administration may make application to the prop-
er district court of the United States or to a United States
court of any place subject to the jurisdiction of the United
States for an order enjoining such acts or practices, or
for an order enforcing compliance with such provision,
rule, regulation, or order, and such courts shall have juris-
diction of such actions and, upon a showing by the Admin-
istration that such New Markets Venture Capital company
or other person has engaged or is about to engage in any
such acts or practices, a permanent or temporary injunc-
tion, restraining order, or other order, shall be granted
without bond.
‘‘(b) SEIZING OF ASSETS.—In any such proceeding
the court, as a court of equity may, to the extent it deems
necessary, take exclusive jurisdiction of the New Markets
Venture Capital company and the assets thereof, wherever
located. The court shall have jurisdiction in any such pro-
ceeding to appoint a trustee or receiver to hold or admin-
ister under the direction of the court the assets so pos-
sessed.
‘‘(c) ADMINISTRATION AS TRUSTEE OR RECEIVER.—
‘‘(1) IN
GENERAL.—The Administration may
act as trustee or receiver under subsection (b) of a
New Markets Venture Capital company.
‘‘(2) APPOINTMENT.—At the request by the Ad-
ministration, the court may appoint the Administra-
tion to act as a trustee or receiver of a New Markets
Venture Capital company unless the court deems
such appointment inequitable or otherwise inappro-
priate.
‘‘SEC. 363. UNLAWFUL ACTS AND OMISSIONS BY OFFICERS,
DIRECTORS, 
EMPLOYEES, 
OR 
AGENTS;
BREACH OF FIDUCIARY DUTY.
‘‘(a) PARTIES DEEMED TO COMMIT A VIOLATION.—
Whenever an New Markets Venture Capital company vio-
lates any provision of this Act, or any regulation issued
thereunder, by reason of its failure to comply with its
terms or by reason of its engaging in any act or practice
which constitutes or will constitute a violation thereof,
such violation shall also be deemed to be a violation and
an unlawful act committed by any person who, directly
or indirectly, authorizes, orders, participates in, causes,
brings about, counsels, aids, or abets in the commission
of any acts, practices, or transactions which constitute or
will constitute, in whole or in part, such violation.
‘‘(b) FIDUCIARY DUTIES.—It shall be unlawful for
any officer, director, employee, agent, or other participant
in the management or conduct or the affairs of an New
Markets Venture Capital company to engage in any act
or practice, or to omit any act, in breach of his fiduciary
duty as such officer, director, employee, agent, or partici-
pant if, as a result thereof, the New Markets Venture Cap-
ital company has suffered or is in imminent danger or suf-
fering financial loss or other damage.
‘‘(c) UNLAWFUL ACTS.—Except with the written con-
sent of the Administration, it shall be unlawful—
‘‘(1) for any person to take office as an officer,
director, or employee of an New Markets Venture
Capital company, or to become an agent or partici-
pant in the conduct of the affairs or management of
an New Markets Venture Capital company, if the
person—
‘‘(A) has been convicted of a felony, or any
other criminal offense involving dishonesty or
breach of trust, or
‘‘(B) the person has been found civilly lia-
ble in damages, or has been permanently or
temporarily enjoined by order, judgment, or de-
cree 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 found civilly liable in dam-
ages, or is permanently or temporarily enjoined
by an order, judgment, or decree of a court of
competent jurisdiction, by reason of any act or
practice involving fraud or breach of trust.
‘‘(d) REMOVAL OR SUSPENSION.—
‘‘(1) IN GENERAL.—As provided in section 313,
the Administration may remove or suspend any per-
son upon whom the Administration has served a no-
tice under this subsection.
‘‘(2) NOTICE.—The Administration may serve
upon any person who is an officer, director, or em-
ployee of a New Markets Venture Capital company,
or an agent or participant in the conduct of the af-
fairs or management of the company, a written no-
tice of the Administration’s intention to remove or
suspend such person from the person’s office or po-
sition, if in the opinion of the Administration, such
person—
‘‘(A) has willfully and knowingly com-
mitted any substantial violation of—
‘‘(i) this Act,
‘‘(ii) any regulation issued under this
Act, or
‘‘(iii) a cease-and-desist order which
has become final, or
‘‘(B) has willfully and knowingly com-
mitted or engaged in any act, omission, or prac-
tice which constitutes a substantial breach of
his fiduciary duty, and that such violation or
such breach of fiduciary duty is one involving
personal dishonesty on the part of such person.
‘‘SEC. 364. REGULATIONS.
‘‘The Administration is authorized to issue such regu-
lations as it deems necessary to carry out the provisions
of this part in accordance with its purposes.
‘‘SEC. 365. AUTHORIZATION OF APPROPRIATIONS.
‘‘For fiscal years 2000 through 2005, the Adminis-
tration is authorized to be appointed such subsidy budget
authority as may be necessary to guarantee up to
$100,000,000 of debentures, and up to $30,000,000 to
make technical assistance grants, for the purposes of this
part, to remain available until expended. This authority
shall be in effect for the period commencing with fiscal
year 2000 through fiscal year 2005.’’.
SEC. 102. CONFORMING AMENDMENTS.
The table of contents in section 101 of the Small
Business Investment Act of 1958 (15 U.S.C. 661 note)
is amended—
(1) by striking ‘‘TITLE III—SMALL BUSI-
NESS INVESTMENT COMPANIES’’ and insert-
ing the following:
‘‘TITLE III—INVESTMENT DIVISION PROGRAMS
‘‘PART A—SMALL BUSINESS INVESTMENT COMPANIES’’;
and
(2) by inserting after the item relating to sec-
tion 322 the following:
‘‘PART B—NEW MARKETS VENTURE CAPITAL PROGRAM
‘‘Sec. 350. Definitions.
‘‘Sec. 351. Purposes.
‘‘Sec. 352. Program establishment.
‘‘Sec. 353. Selection of new markets venture capital companies.
‘‘Sec. 354. Debentures.
‘‘Sec. 355. Technical assistance.
‘‘Sec. 356. Issuance and guarantee of trust certificates.
‘‘Sec. 357. Fees.
‘‘Sec. 358. Bank participation.
‘‘Sec. 359. Federal financing bank.
‘‘Sec. 360. Reporting requirements.
‘‘Sec. 361. Examinations.
‘‘Sec. 362. Injunctions and other orders.
‘‘Sec. 363. Unlawful acts and omissions by officers, directors, employees, or
agents; breach of fiduciary duty.
‘‘Sec. 364. Regulations.
‘‘Sec. 365. Authorization of appropriations.’’.
SEC. 103. BANKRUPTCY EXEMPTION FOR NEW MARKETS
VENTURE 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 350 of the Small Business
Investment Act of 1958,’’ after ‘‘homestead association,’’.
SEC. 104. 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 350 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.’’.
TITLE II—SMALL BUSINESS
LOANS
SEC. 201. PARTICIPATION RATE.
Section 7(a)(2)(A) of the Small Business Act (15
U.S.C. 636(a)(2)(A)) is amended by striking ‘‘$100,000’’
each place it appears and inserting ‘‘$150,000’’.
SEC. 202. GUARANTEE FEE.
Section 7(a)(18)(B) of the Small Business Act (15
U.S.C. 636(a)(18)(B)) is amended by striking ‘‘$80,000’’
and inserting ‘‘$120,000’’.
SEC. 203. GUARANTEE REDUCTION.
Section 7(a)(23)(A) of the Small Business Act (15
U.S.C. 636(a)(23)(A)) is amended by striking the period
at the end and adding the following: ‘‘, except that with
respect to each loan of less than $150,000 guaranteed
under this subsection, the Administration shall assess and
collect an annual fee in an amount equal to 0.3 percent
of the outstanding balance of the deferred participation
share of the loan.’’
TITLE III—AMERICA’S PRIVATE
INVESTMENT COMPANIES
SEC. 301. CONGRESSIONAL FINDINGS AND PURPOSES.
(a) CONGRESSIONAL FINDINGS.—
(1) People living in distressed areas, both urban
and rural, characterized by high levels of joblessness,
poverty, and low incomes continue to miss out on
the economic expansion experienced by the Nation as
a whole.
(2) Unequal access to economic opportunities
continues to make the social costs of joblessness and
poverty to our Nation very high.
(3) There are significant untapped markets in
our Nation, and many of these are in areas that are
underserved by institutions that can make equity
and credit investments.
(b) PURPOSES.—The purposes of this Act are to—
(1) license private for profit community devel-
opment entities that will focus on making equity and
credit investments for large-scale business develop-
ments that benefit low-income communities;
(2) provide credit enhancement for those enti-
ties for use in low-income communities; and
(3) provide a vehicle under which the economic
and social returns on financial investments made
pursuant to this Act may be available both to the in-
vestors in these entities and to the residents of the
low-income communities.
SEC. 302. DEFINITIONS.
As used in this Act:
(1) The term ‘‘Agency’’ has the meaning given
such term in section 551(1) of title 5, United States
Code.
(2) The term ‘‘APIC’’ means a business entity
that has been licensed under the terms of this Act
as an America’s Private Investment Company, and
the license of which has not been revoked.
(3) The term ‘‘Administrator’’ means the Ad-
ministrator of the Small Business Administration.
(4) The term ‘‘community development entity’’
means an entity whose primary mission must be
serving or providing investment capital for low-in-
come communities or low-income persons, which
maintains accountability to residents of low-income
communities, and which has 60 percent of its aggre-
gate gross assets invested in low-income community
investments or residential property located in low-
income communities.
(5) The term ‘‘cost’’ has the meaning set forth
in section 502(5) of the Federal Credit Reform Act
of 1990.
(6) The term ‘‘debentures’’ means debt instru-
ments the terms of any of which may be specified
by the Secretary.
(7) The term ‘‘HUD’’ means the Secretary of
Housing and Urban Development or the Department
of Housing and Urban Development, as the context
requires.
(8) The term ‘‘low-income communities’’ means
census tracts with (A) poverty rates of at least 20
percent, based on the most recent census data; or
(B) median family income that does not exceed 80
percent of the greater of (i) metropolitan area me-
dian family income, or (ii) statewide median family
income.
(9) The term ‘‘qualified low-income community
investments’’ means equity investments in, or loans
to, qualified active businesses located in low-income
communities.
(10) The term ‘‘qualified active business’’
means a business or trade—
(A) at least 50 percent of the gross income
of which is derived from conduct of trade or
business activities in low-income communities;
(B) a substantial portion of the use of the
tangible property of which is used within low-
income communities;
(C) a substantial portion of the services
that the employees of which perform are per-
formed in low-income communities; and
(D) less than 5 percent of the aggregate
unadjusted bases of the property of which is at-
tributable to certain financial property, as the
Secretary shall set forth in regulations, or in
collectibles, other than collectibles held pri-
marily for sale to customers.
(11) The term ‘‘Secretary’’ means the Secretary
of Housing and Urban Development, unless other-
wise specified in this Act.
SEC. 303. AUTHORIZATION.
(a) LICENSES.—The Secretary is authorized to li-
cense America’s Private Investment Companies, in accord-
ance with the terms of this Act.
(b) REGULATIONS.—The Secretary is authorized to
regulate APICs for compliance with sound financial man-
agement practices, and the program and procedural goals
of this and other related Acts, and other purposes as re-
quired or authorized by this Act, or determined by the
Secretary. The Secretary may issue regulations, Federal
Register notices, and other guidance or directives to carry
out licensing and regulatory and other duties under this
Act.
(c) USE OF CREDIT SUBSIDY FOR LICENSES.—
(1) NUMBER OF LICENSES.—The Secretary is
authorized to have outstanding at any one time the
number of licenses for APICs that may be supported
by the amount of the budget authority appropriated
in accordance with the Federal Credit Reform Act of
1990 for the subsidy cost and the investment strate-
gies of such APICs.
(2) USE OF CREDIT SUBSIDY AFTER INITIAL
APPROPRIATION TO HUD.—With respect to any ap-
propriation of budget authority for the credit costs
after the initial appropriation, the Secretary may li-
cense additional APICs, or as hereinafter provided,
increase the credit subsidy allocated to an APIC as
an award for high performance under this Act.
(d) COOPERATION AND COORDINATION.—
(1) PROGRAM POLICIES.—The Secretary is au-
thorized to coordinate and cooperate, through memo-
randa of understanding, an APIC liaison committee,
or otherwise, with the Administrator, the Secretary
of the Treasury, and other agencies in the discretion
of the Secretary, on implementation of this Act, in-
cluding regulation, examination, and monitoring of
APICs under this Act.
(2) OPERATIONS.—The Secretary may carry
out this Act—
(A) directly, through agreements with
other Federal entities under section 1535 of
title 31, United States Code, or otherwise, or
(B) indirectly, under contracts or agree-
ments, as the Secretary shall determine.
(e) FEES
AND
CHARGES
FOR
ADMINISTRATIVE
COSTS.—To the extent provided in appropriations Acts,
the Secretary is authorized to impose fees and charges for
application, review, licensing, and regulation, or other ac-
tions under this Act, and to pay for the costs of such ac-
tivities from the fees and charges collected.
(f) GUARANTEE FEES.—The Secretary is authorized
to set and collect fees for loan guarantee commitments and
loan guarantees that the Secretary makes under this Act.
(g) FUNDING.—
(1) AUTHORIZATION
FOR
APPROPRIATION
OF
COST
OF
ANNUAL
LOAN
GUARANTEE
COMMIT-
MENT.—For each of fiscal years 2000, 2001, 2002,
and 2003, there is authorized to be appropriated up
to $36,000,000 for the cost of annual loan guar-
antee commitments under this Act. The Secretary
may make commitments to guarantee loans only to
the extent that the total loan principal, any part of
which is guaranteed, will not exceed $1,000,000,000,
or the amount specified in appropriations Acts in
each such fiscal year. Amounts appropriated under
this paragraph shall remain available for 5 years.
(2) AUTHORIZATION
FOR
APPROPRIATION
OF
ADMINISTRATIVE EXPENSES.—For each of the fiscal
years 2000, 2001, 2002, and 2003, there is author-
ized to be appropriated $1,000,000 for administra-
tive expenses for carrying out this Act. The Sec-
retary may transfer amounts appropriated under
this paragraph to any appropriation account of
HUD or another agency, to carry out the program
under this Act. Any agency to which the Secretary
may transfer amounts under this Act is authorized
to accept such transferred amounts in any appro-
priation account of such agency.
SEC. 304. SELECTION OF APICS.
(a) NOTICE OF COMPETITIONS.—The Secretary shall
select APICs for licensing on the basis of competitions.
Such competitions shall be announced by a Federal Reg-
ister notice that invites applications for APIC licenses.
Each such notice shall set forth application requirements,
and such other terms of the competition not otherwise pro-
vided for, as determined by the Secretary.
(b) LICENSEE SELECTION CRITERIA.—The Secretary
shall select among applicants for licenses on the basis of
the extent to which an applicant may be expected to
achieve the goals of the Act by satisfying the requirements
set forth in this subsection.
(1) The applicant shall be a private for profit
entity that qualifies as a community development en-
tity for the purposes of the New Markets Tax Cred-
its, to the extent such credits are established under
Federal law.
(2) The entity must, as of the time that the li-
cense is approved, have reasonably available to it, as
determined by the Secretary, a minimum of
$25,000,000 in equity capital, as determined by the
Secretary.
(3) The entity must demonstrate that its man-
agers are qualified, and have the knowledge, experi-
ence, and capability necessary to raise large amounts
of capital and make investments for community eco-
nomic development in distressed areas.
(4) The entity must demonstrate that, as a
matter of sound financial management practices, it
is structured to preclude financial conflict of interest
between the APIC and a manager or investor.
(5) The entity must prepare and submit an in-
vestment strategy that includes benchmarks for eval-
uation of its progress.
(6) The entity must prepare and submit a
statement of public purpose goals. The statement
shall include elements specified by the Secretary, in-
cluding proposed measurements and strategies for
meeting the goals. The goals shall promote commu-
nity and economic development, and include at
least—
(A) making investments that are qualified
investments in low-income communities;
(B) creation of jobs that pay decent wages
in low-income communities and for residents of
such areas; and
(C) involvement of community-based orga-
nizations and residents in community develop-
ment activities.
(7) The entity must demonstrate a capacity to
cooperate with States or units of general local gov-
ernment and with community-based organizations
and residents of low-income communities.
(8) The entity must agree to comply with appli-
cable laws, including Federal executive orders, Office
of Management and Budget circulars, and Treasury
requirements, and such operating and regulatory re-
quirements as the Secretary may impose from time
to time.
(9) The entity must satisfy other application re-
quirements that the Secretary may impose by regu-
lation or Federal Register notice.
(c) COMMUNICATIONS BETWEEN HUD AND APPLI-
CANTS DURING SELECTION PROCESS.—
(1) The Secretary shall set forth in regulations
the procedures under which HUD, on the one hand,
and applicants for APIC licenses, and others, on the
other hand, may communicate. Such regulations
shall—
(A) specify by position the HUD officers
and employees who may communicate with such
applicants and others;
(B) permit such officers and employees to
request and discuss with the applicant and oth-
ers (such as banks or other credit or business
references, or potential investors, that the appli-
the first such notice shall be subject to notice and
comment rulemaking.
(3) Section 12(e)(2) of the Department of
Housing and Urban Development Act (42 U.S.C.
3537a(e)(2)) is amended by inserting before the pe-
riod at the end the following: ‘‘, or any license pro-
vided under the America’s Private Investment Com-
panies Act’’.
SEC. 305. OPERATIONS OF APICS.
(a) IN GENERAL.—
(1) An APIC shall have any powers or
authorities—
(A) that the APIC derives from the juris-
diction in which it is organized, or that the
APIC otherwise has;
(B) as may be conferred by a license under
this Act; and
(C) as the Secretary may prescribe by reg-
ulation.
(2) Nothing in this Act shall preclude an APIC
or its investors from receiving an allocation of New
Market Tax Credits (to the extent such credits are
established under Federal law) if the APIC satisfies
any applicable terms and conditions under the Inter-
nal Revenue Code of 1986.
(b) INVESTMENT LIMITATIONS.—
(1) QUALIFIED
LOW-INCOME
COMMUNITY
IN-
VESTMENTS.—Substantially all investments that an
APIC makes must be qualified low-income commu-
nity investments if the investments are financed
with—
(A) amounts available from the proceeds of
the issuance of an APICs debenture guaranteed
under this Act;
(B) proceeds of the sale of obligations de-
scribed under subsection (c)(3)(C)(iii); or
(C) the use of equity capital, as deter-
mined by the Secretary, in an amount specified
in the APICs license.
(2) INVESTMENT LIMIT.—An APIC shall not,
as a matter of sound financial practice, invest in any
one business, an amount that exceeds an amount
equal to 35 percent of the sum of—
(A) the APICs equity capital; plus
(B) an amount equal to the percentage
limit that the Secretary determines that APIC
may have outstanding at any one time, under
subsection (c)(2)(A).
(c) BORROWING POWERS; DEBENTURES.—
(1) ISSUING.—An APIC may issue debentures
that the Secretary may guarantee under the terms
of this Act.
(2) LEVERAGE LIMITS.—In general, as a mat-
ter of sound financial management practices—
(A) the total amount of debentures that an
APIC issues under this Act that an APIC may
have outstanding at any one time shall not ex-
ceed an amount equal to 200 percent of the eq-
uity capital of the APIC, as determined by the
Secretary: Provided, That the Secretary may by
regulation increase the foregoing percentage to
up to 300 percent for all APICs, or any reason-
able class of APICs; and
(B) an APIC must not have more than
$300,000,000 in face value of debentures issued
under this Act outstanding at any one time.
(3) REPAYMENT.—
(A) An APIC must have repaid, or have
otherwise been relieved of indebtedness, with re-
spect to any interest or principal amounts of
borrowings under this subsection no less than 2
years before the APIC may dissolve or other-
wise complete the wind-up of its business.
(B) An APIC may repay any interest or
principal amounts of borrowings under this sub-
section at any time: Provided, That the repay-
ment of such amounts shall not relieve an APIC
of any duty otherwise applicable to the APIC
under this Act, unless the Secretary orders such
relief.
(C) Until an APIC has repaid all interest
and principal amounts on APIC borrowings
under this subsection, an APIC may use the
proceeds of investments in accordance with reg-
ulations issued by the Secretary only to—
(i) pay for proper costs and expenses
the APIC incurs in connection with such
investments;
(ii) pay for the reasonable administra-
tive expenses of the APIC;
(iii) purchase Treasury securities;
(iv) repay interest and principal
amounts on APIC borrowings under this
subsection;
(v) make interest, dividend, or other
distributions to or on behalf of an investor;
or
(vi) undertake such other purposes as
the Secretary may approve.
(D) After an APIC has repaid all interest
and principal amounts on APIC borrowings
under this subsection, and subject to continuing
compliance with subsection (a), the APIC may
use the proceeds from investments to make in-
terest, dividend, or other distributions to or on
behalf of investors in the nature of returns on
capital, or the withdrawal of equity capital,
without regard to subparagraph (C) but in con-
formity with the APICs investment strategy
and statement of public purpose goals.
(d) REUSE OF DEBENTURE PROCEEDS.—An APIC
may use the proceeds of sale of Treasury securities pur-
chased under subsection (c)(3)(C)(iii) to make qualified
low-income community investments, subject to the Sec-
retary’s approval. In making the request for the Sec-
retary’s approval, the APIC shall follow the procedures ap-
plicable to an APICs request for HUD guarantee action,
as the Secretary may modify such procedures for imple-
mentation of this subsection. Such procedures shall never-
theless include the description and certifications that an
APIC must include in all requests for guarantee action,
and the environmental certification applicable to initial ex-
penditures for a project or activity.
(e) ANTIPIRATING.—Notwithstanding any other pro-
vision of law, an APIC may not use any equity capital
required to be contributed under this Act, or the proceeds
from the sale of any debenture under this Act, to make
an investment, as determined by the Secretary, to assist
directly in the relocation of any industrial or commercial
plant, facility, or operation, from 1 area to another area,
if the relocation is likely to result in a significant loss of
employment in the labor market area from which the relo-
cation occurs.
(f) EXCLUSION
OF APIC FROM DEFINITION
OF
DEBTOR
UNDER
BANKRUPTCY
PROVISIONS.—Section
109(b)(2) of title 11 of the United States Code is amended
by inserting before ‘‘credit union’’ the following: ‘‘Amer-
ica’s Private Investment Companies licensed by the De-
partment of Housing and Urban Development under the
America’s Private Investment Companies Act,’’.
SEC. 306. CREDIT ENHANCEMENT BY THE FEDERAL GOV-
ERNMENT.
(a) ISSUANCE AND GUARANTEE OF DEBENTURES.—
Consistent with the Federal Credit Reform Act of 1990,
the Secretary is authorized to make commitments to guar-
antee and guarantee the timely payment of all principal