167
to forfeit rights or privileges under subsection (a), a
court of the United States of competent jurisdiction
must find that the company committed a violation,
or failed to comply, in a cause of action brought for
that purpose in the district, territory, or other place
subject to the jurisdiction of the United States, in
which the principal office of the company is located.
‘‘(2) PARTIES AUTHORIZED TO FILE CAUSES OF
ACTION.—Each cause of action brought by the
United States under this subsection shall be brought
by the Administration or by the Attorney General.
‘‘SEC. 365. UNLAWFUL ACTS AND OMISSIONS; BREACH OF
FIDUCIARY DUTY.
‘‘(a) PARTIES DEEMED TO COMMIT A VIOLATION.—
Whenever any New Markets Venture Capital company vio-
lates any provision of this Act, of a regulation issued
under this Act, or of a participation agreement entered
into under this Act, by reason of its failure to comply with
its terms or by reason of its engaging in any act or prac-
tice that 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
168
of any acts, practices, or transactions that 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 of the affairs of a New
Markets Venture Capital company to engage in any act
or practice, or to omit any act or practice, in breach of
the person’s fiduciary duty as such officer, director, em-
ployee, agent, or participant if, as a result thereof, the
company suffers or is in imminent danger of suffering fi-
nancial 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 any New Markets Venture
Capital company, or to become an agent or partici-
pant in the conduct of the affairs or management of
such a company, if the person—
‘‘(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
169
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.
170
‘‘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.’’.
(c) CONFORMING AMENDMENT.—Section 20(e)(1)(C)
of the Small Business Act (15 U.S.C 631 note) is amend-
ed by inserting ‘‘part A of’’ before ‘‘title III’’.
(d) CALCULATION OF MAXIMUM AMOUNT OF SBIC
LEVERAGE.—
(1) 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-
171
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-
172
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 ini-
tial adjustments made under this subpara-
graph after the date of the 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.’’.
(2) 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:
173
‘‘(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.’’.
(e) 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 sec-
tion 351 of the Small Business Investment Act of 1958,’’
after ‘‘homestead association,’’.
(f) 
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 fol-
lowing:
‘‘(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-
174
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.’’.
SEC. 706. BUSINESSLINC GRANTS AND COOPERATIVE
AGREEMENTS.
Section 8 of the Small Business Act (15 U.S.C. 637)
is amended by adding at the end the following:
‘‘(m) BUSINESSLINC GRANTS
AND COOPERATIVE
AGREEMENTS.—
‘‘(1) IN
GENERAL.—In accordance with this
subsection, the Administrator may make grants to
and enter into cooperative agreements with any coa-
lition of private entities, public entities, or any com-
bination of private and public entities—
‘‘(A) to expand business-to-business rela-
tionships between large and small businesses;
and
‘‘(B) to provide businesses, directly or indi-
rectly, with online information and a database
of companies that are interested in mentor-
175
prote´ge´ programs or community-based, state-
wide, or local business development programs.
‘‘(2) MATCHING
REQUIREMENT.—Subject to
subparagraph (B), the Administrator may make a
grant to a coalition under paragraph (1) only if the
coalition provides for activities described in para-
graph (1)(A) or (1)(B) an amount, either in kind or
in cash, equal to the grant amount.
‘‘(3) AUTHORIZATION
OF
APPROPRIATIONS.—
There is authorized to be appropriated to carry out
this subsection $6,600,000, to remain available until
expended, for each of fiscal years 2001 through
2003.’’.
Passed the House of Representatives July 25, 2000.
Attest:
JEFF TRANDAHL,
Clerk.
Calendar No. 780
106TH CONGRESS
2D SESSION
H. R. 4923
AN ACT
To amend the Internal Revenue Code of 1986 to
provide tax incentives for the renewal of dis-
tressed communities, to provide for nine addi-
tional empowerment zones and increased tax in-
centives for empowerment zone development, to
encourage investments in new markets, and for
other purposes.
SEPTEMBER 5, 2000
Read the second time and placed on the calendar