111
ficer may restrict competition for any contract for
the procurement of goods or services by the Federal
Government to small business concerns owned and
controlled by women, if—
‘‘(A) each of the concerns is not less than
51 percent owned by 1 or more women who are
economically disadvantaged (and such owner-
ship is determined without regard to any com-
munity property law);
‘‘(B) the contracting officer has a reason-
able expectation that 2 or more small business
concerns owned and controlled by women will
submit offers for the contract;
‘‘(C) the contract is for the procurement of
goods or services with respect to an industry
identified by the Administrator pursuant to
paragraph (3);
‘‘(D) the anticipated award price of the
contract (including options) does not exceed—
‘‘(i) $5,000,000, in the case of a con-
tract assigned an industrial classification
code for manufacturing; or
‘‘(ii) $3,000,000, in the case of all
other contracts;
112
‘‘(E) in the estimation of the contracting
officer, the contract award can be made at a
fair and reasonable price; and
‘‘(F) each of the concerns—
‘‘(i) is certified by a Federal agency,
a State government, or a national certi-
fying entity approved by the Adminis-
trator, as a small business concern owned
and controlled by women; or
‘‘(ii) certifies to the contracting officer
that it is a small business concern owned
and controlled by women and provides ade-
quate documentation, in accordance with
standards established by the Administra-
tion, to support such certification.
‘‘(3) WAIVER.—With respect to a small busi-
ness concern owned and controlled by women, the
Administrator may waive subparagraph (2)(A) if the
Administrator determines that the concern is in an
industry in which small business concerns owned
and controlled by women are substantially underrep-
resented.
‘‘(4) IDENTIFICATION
OF
INDUSTRIES.—The
Administrator shall conduct a study to identify in-
dustries in which small business concerns owned and
113
controlled by women are underrepresented with re-
spect to Federal procurement contracting.
‘‘(5) ENFORCEMENT; PENALTIES.—
‘‘(A) VERIFICATION
OF
ELIGIBILITY.—In
carrying out this subsection, the Administrator
shall establish procedures relating to—
‘‘(i) the filing, investigation, and dis-
position by the Administration of any chal-
lenge to the eligibility of a small business
concern to receive assistance under this
subsection (including a challenge, filed by
an interested party, relating to the veracity
of a certification made or information pro-
vided to the Administration by a small
business concern under paragraph (2)(F));
and
‘‘(ii) verification by the Administrator
of the accuracy of any certification made
or information provided to the Administra-
tion by a small business concern under
paragraph (2)(F).
‘‘(B) EXAMINATIONS.—The procedures es-
tablished under subparagraph (A) may provide
for program examinations (including random
program examinations) by the Administrator of
114
any small business concern making a certifi-
cation or providing information to the Adminis-
trator under paragraph (2)(F).
‘‘(C) PENALTIES.—In addition to the pen-
alties described in section 16(d), any small busi-
ness concern that is determined by the Admin-
istrator to have misrepresented the status of
that concern as a small business concern owned
and controlled by women for purposes of this
subsection, shall be subject to—
‘‘(i) section 1001 of title 18, United
States Code; and
‘‘(ii) sections 3729 through 3733 of
title 31, United States Code.
‘‘(6) PROVISION OF DATA.—Upon the request
of the Administrator, the head of any Federal de-
partment or agency shall promptly provide to the
Administrator such information as the Adminis-
trator determines to be necessary to carry out this
subsection.’’.
115
TITLE 
IX—COMMUNITY 
RE-
NEWAL AND NEW MARKETS
INITIATIVES
SEC. 901. NEW MARKETS VENTURE CAPITAL PROGRAM.
(a) SHORT TITLE.—This section may be cited as the
‘‘New Markets Venture Capital Program Act of 2000’’.
(b) NEW MARKETS VENTURE CAPITAL PROGRAM.—
Title III of the Small Business Investment Act of 1958
(15 U.S.C. 681 et seq.) is amended—
(1) in the heading for the title, by striking
‘‘SMALL BUSINESS INVESTMENT COMPA-
NIES’’ and inserting ‘‘INVESTMENT DIVISION
PROGRAMS’’;
(2) by inserting before the heading for section
301 the following:
‘‘PART A—SMALL BUSINESS INVESTMENT COMPANIES’’;
and
(3) by adding at the end the following:
‘‘PART B—NEW MARKETS VENTURE CAPITAL PROGRAM
‘‘SEC. 351. DEFINITIONS.
‘‘In this part, the following definitions apply:
‘‘(1) DEVELOPMENTAL
VENTURE
CAPITAL.—
The term ‘developmental venture capital’ means cap-
ital in the form of equity capital investments in busi-
nesses made with a primary objective of fostering
116
economic development in low-income geographic
areas. For the purposes of this paragraph, the term
‘equity capital’ has the same meaning given such
term in section 303(g)(4).
‘‘(2) LOW-INCOME
INDIVIDUAL.—The term
‘low-income individual’ means an individual whose
income (adjusted for family size) does not exceed—
‘‘(A) for metropolitan areas, 80 percent of
the area median income; and
‘‘(B) for nonmetropolitan areas, the great-
er of—
‘‘(i) 80 percent of the area median in-
come; or
‘‘(ii) 80 percent of the statewide non-
metropolitan area median income.
‘‘(3) LOW-INCOME
GEOGRAPHIC
AREA.—The
term ‘low-income geographic area’ means—
‘‘(A) any population census tract (or in the
case of an area that is not tracted for popu-
lation census tracts, the equivalent county divi-
sion, as defined by the Bureau of the Census of
the Department of Commerce for purposes of
defining poverty areas), if—
‘‘(i) the poverty rate for that census
tract is not less than 20 percent;
117
‘‘(ii) in the case of a tract—
‘‘(I) that is located within a met-
ropolitan area, 50 percent or more of
the households in that census tract
have an income equal to less than 60
percent of the area median gross in-
come; or
‘‘(II) that is not located within a
metropolitan area, the median house-
hold income for such tract does not
exceed 80 percent of the statewide
median household income; or
‘‘(iii) as determined by the Adminis-
trator based on objective criteria, a sub-
stantial population of low-income individ-
uals reside, an inadequate access to invest-
ment capital exists, or other indications of
economic distress exist in that census
tract; or
‘‘(B) any area located within—
‘‘(i) a HUBZone (as defined in sec-
tion 3(p) of the Small Business Act and
the implementing regulations issued under
that section);
118
‘‘(ii) an urban empowerment zone or
urban enterprise community (as designated
by the Secretary of Housing and Urban
Development); or
‘‘(iii) a rural empowerment zone or
rural enterprise community (as designated
by the Secretary of Agriculture).
‘‘(4) NEW MARKETS VENTURE CAPITAL COM-
PANY.—The term ‘New Markets Venture Capital
company’ means a company that—
‘‘(A) has been granted final approval by
the Administrator under section 354(e); and
‘‘(B) has entered into a participation
agreement with the Administrator.
‘‘(5) OPERATIONAL
ASSISTANCE.—The term
‘operational assistance’ means management, mar-
keting, and other technical assistance that assists a
small business concern with business development.
‘‘(6) PARTICIPATION
AGREEMENT.—The term
‘participation agreement’ means an agreement, be-
tween the Administrator and a company granted
final approval under section 354(e), that—
‘‘(A) details the company’s operating plan
and investment criteria; and
119
‘‘(B) requires the company to make invest-
ments in smaller enterprises at least 80 percent
of which are located in low-income geographic
areas.
‘‘(7) SPECIALIZED
SMALL
BUSINESS
INVEST-
MENT COMPANY.—The term ‘specialized small busi-
ness investment company’ means any small business
investment company that—
‘‘(A) invests solely in small business con-
cerns that contribute to a well-balanced na-
tional economy by facilitating ownership in such
concerns by persons whose participation in the
free enterprise system is hampered because of
social or economic disadvantages;
‘‘(B) is organized or chartered under State
business or nonprofit corporations statutes, or
formed as a limited partnership; and
‘‘(C) was licensed under section 301(d), as
in effect before September 30, 1996.
‘‘(8) STATE.—The term ‘‘State’’ means each of
the several 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 common-
wealth, territory, or possession of the United States;
120
‘‘SEC. 352. PURPOSES.
‘‘The purposes of the New Markets Venture Capital
Program established under this part are—
‘‘(1) to promote economic development and the
creation of wealth and job opportunities in low-in-
come geographic areas and among individuals living
in such areas by encouraging developmental venture
capital investments in smaller enterprises primarily
located in such areas; and
‘‘(2) to establish a developmental venture cap-
ital program, with the mission of addressing the
unmet equity investment needs of small enterprises
located in low-income geographic areas, to be admin-
istered by the Administrator—
‘‘(A) to enter into participation agreements
with New Markets Venture Capital companies;
‘‘(B) to guarantee debentures of New Mar-
kets Venture Capital companies to enable each
such company to make developmental venture
capital investments in smaller enterprises in
low-income geographic areas; and
‘‘(C) to make grants to New Markets Ven-
ture Capital companies, and to other entities,
for the purpose of providing operational assist-
ance to smaller enterprises financed, or ex-
pected to be financed, by such companies.
121
‘‘SEC. 353. ESTABLISHMENT.
‘‘In accordance with this part, the Administrator
shall establish a New Markets Venture Capital Program,
under which the Administrator may—
‘‘(1) enter into participation agreements with
companies granted final approval under section
354(e) for the purposes set forth in section 352;
‘‘(2) guarantee the debentures issued by New
Markets Venture Capital companies as provided in
section 355; and
‘‘(3) make grants to New Markets Venture
Capital companies, and to other entities, under sec-
tion 358.
‘‘SEC. 354. SELECTION OF NEW MARKETS VENTURE CAP-
ITAL COMPANIES.
‘‘(a) ELIGIBILITY.—A company shall be eligible to
apply to participate, as a New Markets Venture Capital
company, in the program established under this part if—
‘‘(1) the company is a newly formed for-profit
entity or a newly formed for-profit subsidiary of an
existing entity;
‘‘(2) the company has a management team with
experience in community development financing or
relevant venture capital financing; and
122
‘‘(3) the company has a primary objective of
economic development of low-income geographic
areas.
‘‘(b) APPLICATION.—To participate, as a New Mar-
kets Venture Capital company, in the program established
under this part a company meeting the eligibility require-
ments set forth in subsection (a) shall submit an applica-
tion to the Administrator that includes—
‘‘(1) a business plan describing how the com-
pany intends to make successful developmental ven-
ture capital investments in identified low-income ge-
ographic areas;
‘‘(2) information regarding the community de-
velopment finance or relevant venture capital quali-
fications and general reputation of the company’s
management;
‘‘(3) a description of how the company intends
to work with community organizations and to seek
to address the unmet capital needs of the commu-
nities served;
‘‘(4) a proposal describing how the company in-
tends to use the grant funds provided under this
part to provide operational assistance to smaller en-
terprises financed by the company, including infor-
mation regarding whether the company intends to
123
use licensed professionals, when necessary, on the
company’s staff or from an outside entity;
‘‘(5) with respect to binding commitments to be
made to the company under this part, an estimate
of the ratio of cash to in-kind contributions;
‘‘(6) a description of the criteria to be used to
evaluate whether and to what extent the company
meets the objectives of the program established
under this part;
‘‘(7) information regarding the management
and financial strength of any parent firm, affiliated
firm, or any other firm essential to the success of
the company’s business plan; and
‘‘(8) such other information as the Adminis-
trator may require.
‘‘(c) CONDITIONAL APPROVAL.—
‘‘(1) IN
GENERAL.—From among companies
submitting applications under subsection (b), the
Administrator shall, in accordance with this sub-
section, conditionally approve companies to partici-
pate in the New Markets Venture Capital Program.
‘‘(2) SELECTION CRITERIA.—In selecting com-
panies under paragraph (1), the Administrator shall
consider the following:
124
‘‘(A) The likelihood that the company will
meet the goals of its business plan.
‘‘(B) The experience and background of
the company’s management team.
‘‘(C) The need for developmental venture
capital investments in the geographic areas in
which the company intends to invest.
‘‘(D) The extent to which the company will
concentrate its activities on serving the geo-
graphic areas in which it intends to invest.
‘‘(E) The likelihood that the company will
be able to satisfy the conditions under sub-
section (d).
‘‘(F) The extent to which the activities
proposed by the company will expand economic
opportunities in the geographic areas in which
the company intends to invest.
‘‘(G) The strength of the company’s pro-
posal to provide operational assistance under
this part as the proposal relates to the ability
of the applicant to meet applicable cash require-
ments and properly utilize in-kind contribu-
tions, including the use of resources for the
services of licensed professionals, when nec-
essary, whether provided by persons on the
125
company’s staff or by persons outside of the
company.
‘‘(H) Any other factors deemed appro-
priate by the Administrator.
‘‘(3) NATIONWIDE DISTRIBUTION.—The Admin-
istrator shall select companies under paragraph (1)
in such a way that promotes investment nationwide.
‘‘(d) REQUIREMENTS TO BE MET FOR FINAL AP-
PROVAL.—The Administrator shall grant each condi-
tionally approved company a period of time, not to exceed
2 years, to satisfy the following requirements:
‘‘(1) CAPITAL
REQUIREMENT.—Each condi-
tionally approved company shall raise not less than
$5,000,000 of private capital or binding capital com-
mitments from one or more investors (other than
agencies or departments of the Federal Government)
who meet criteria established by the Administrator.
‘‘(2) NONADMINISTRATION
RESOURCES
FOR
OPERATIONAL ASSISTANCE.—
‘‘(A) IN
GENERAL.—In order to provide
operational assistance to smaller enterprises ex-
pected to be financed by the company, each
conditionally approved company—
‘‘(i) shall have binding commitments
(for contribution in cash or in kind)—
126
‘‘(I) from any sources other than
the Small Business Administration
that meet criteria established by the
Administrator;
‘‘(II) payable or available over a
multiyear period acceptable to the Ad-
ministrator (not to exceed 10 years);
and
‘‘(III) in an amount not less than
30 percent of the total amount of cap-
ital and commitments raised under
paragraph (1);
‘‘(ii) 
shall 
have 
purchased 
an
annuity—
‘‘(I) from an insurance company
acceptable to the Administrator;
‘‘(II) using funds (other than the
funds raised under paragraph (1))
from any source other than the Ad-
ministrator; and
‘‘(III) that yields cash payments
over a multiyear period acceptable to
the Administrator (not to exceed 10
years) in an amount not less than 30
percent of the total amount of capital
127
and commitments raised under para-
graph (1); or
‘‘(iii) shall have binding commitments
(for contributions in cash or in kind) of the
type described in clause (i) and shall have
purchased an annuity of the type described
in clause (ii), which in the aggregate make
available, over a multiyear period accept-
able to the Administrator (not to exceed 10
years), an amount not less than 30 percent
of the total amount of capital and commit-
ments raised under paragraph (1).
‘‘(B) 
EXCEPTION.—The 
Administrator
may, in the discretion of the Administrator and
based upon a showing of special circumstances
and good cause, consider an applicant to have
satisfied the requirements of subparagraph (A)
if the applicant has—
‘‘(i) a viable plan that reasonably
projects the capacity of the applicant to
raise the amount (in cash or in-kind) re-
quired under subparagraph (A); and
‘‘(ii) binding commitments in an
amount equal to not less than 20 percent
128
of the total amount required under para-
graph (A).
‘‘(C) LIMITATION.—In order to comply
with the requirements of subparagraphs (A)
and (B), the total amount of a company’s in-
kind contributions may not exceed 50 percent
of the company’s total contributions.
‘‘(e) FINAL APPROVAL; DESIGNATION.—The Admin-
istrator shall, with respect to each applicant conditionally
approved to operate as a New Markets Venture Capital
company under subsection (c), either—
‘‘(1) grant final approval to the applicant to op-
erate as a New Markets Venture Capital company
under this part and designate the applicant as such
a company, if the applicant—
‘‘(A) satisfies the requirements of sub-
section (d) on or before the expiration of the
time period described in that subsection; and
‘‘(B) enters into a participation agreement
with the Administrator; or
‘‘(2) if the applicant fails to satisfy the require-
ments of subsection (d) on or before the expiration
of the time period described in that subsection, re-
voke the conditional approval granted under that
subsection.
129
‘‘SEC. 355. DEBENTURES.
‘‘(a) IN GENERAL.—The Administrator may guar-
antee the timely payment of principal and interest, as
scheduled, on debentures issued by any New Markets Ven-
ture Capital company.
‘‘(b) TERMS AND CONDITIONS.—The Administrator
may make guarantees under this section on such terms
and conditions as it deems 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.—
‘‘(1) IN GENERAL.—Under this section, the Ad-
ministrator may guarantee the debentures issued by
a New Markets Venture Capital company only to the
extent that the total face amount of outstanding
guaranteed debentures of such company does not ex-
ceed 150 percent of the private capital of the com-
pany, as determined by the Administrator.
‘‘(2) 
TREATMENT
OF
CERTAIN
FEDERAL
FUNDS.—For the purposes of paragraph (1), private
capital shall include capital that is considered to be
Federal funds, if such capital is contributed by an
130
investor other than an agency or department of the
Federal Government.
‘‘SEC. 356. ISSUANCE AND GUARANTEE OF TRUST CERTIFI-
CATES.
‘‘(a) ISSUANCE.—The Administrator may issue trust
certificates representing ownership of all or a fractional
part of debentures issued by a New Markets Venture Cap-
ital 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 com-
posed solely of guaranteed debentures.
‘‘(b) GUARANTEE.—
‘‘(1) IN
GENERAL.—The Administrator may,
under such terms and conditions as it deems appro-
priate, guarantee the timely payment of the principal
of and interest on trust certificates issued by the
Administrator or its agents for purposes of this sec-
tion.
‘‘(2) LIMITATION.—Each guarantee under this
subsection shall be limited to the extent of principal
and interest on the guaranteed debentures that com-
pose the trust or pool.
‘‘(3) PREPAYMENT OR DEFAULT.—In the event
that a debenture in a trust or pool is prepaid, or in
the event of default of such a debenture, the guar-
131
antee 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. Interest on
prepaid or defaulted debentures shall accrue and be
guaranteed by the Administrator only through the
date of payment of the guarantee. At any time dur-
ing its term, a trust certificate may be called for re-
demption due to prepayment or default of all deben-
tures.
‘‘(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 of a trust certificate issued by
the Administrator or its agents under this section.
‘‘(d) FEES.—The Administrator shall not collect a fee
for any guarantee of a trust certificate under this section,
but any agent of the Administrator may collect a fee ap-
proved by the Administrator for the functions described
in subsection (f)(2).
‘‘(e) SUBROGATION AND OWNERSHIP RIGHTS.—
‘‘(1) SUBROGATION.—In the event the Adminis-
trator pays a claim under a guarantee issued under
this section, it shall be subrogated fully to the rights
satisfied by such payment.
132
‘‘(2) OWNERSHIP RIGHTS.—No Federal, State,
or local law shall preclude or limit the exercise by
the Administrator of its ownership rights in the de-
bentures residing in a trust or pool against which
trust certificates are issued under this section.
‘‘(f) MANAGEMENT AND ADMINISTRATION.—
‘‘(1) REGISTRATION.—The Administrator may
provide for a central registration of all trust certifi-
cates issued under this section.
‘‘(2) CONTRACTING OF FUNCTIONS.—
‘‘(A) IN
GENERAL.—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, notwithstanding
any other provision of law—
‘‘(i) maintenance, on behalf of and
under the direction of the Administrator,
of such commercial bank accounts or in-
vestments in obligations of the United
States as may be necessary to facilitate the
creation of trusts or pools backed by de-
bentures guaranteed under this part; and
133
‘‘(ii) the issuance of trust certificates
to facilitate the creation of such trusts or
pools.
‘‘(B) FIDELITY BOND OR INSURANCE RE-
QUIREMENT.—Any agent performing functions
on behalf of the Administrator under this para-
graph shall provide a fidelity bond or insurance
in such amounts as the Administrator deter-
mines to be necessary to fully protect the inter-
ests of the United States.
‘‘(3) REGULATION
OF
BROKERS
AND
DEAL-
ERS.—The Administrator may regulate brokers and
dealers in trust certificates issued under this section.
‘‘(4) ELECTRONIC REGISTRATION.—Nothing in
this subsection may be construed to prohibit the use
of a book-entry or other electronic form of registra-
tion for trust certificates issued under this section.
‘‘SEC. 357. FEES.
‘‘Except as provided in section 356(d), the Adminis-
trator may charge such fees as it deems appropriate with
respect to any guarantee or grant issued under this part.
‘‘SEC. 358. OPERATIONAL ASSISTANCE GRANTS.
‘‘(a) IN GENERAL.—
‘‘(1) AUTHORITY.—In accordance with this sec-
tion, the Administrator may make grants to New
134
Markets Venture Capital companies and to other en-
tities, as authorized by this part, to provide oper-
ational assistance to smaller enterprises financed, or
expected to be financed, by such companies or other
entities.
‘‘(2) TERMS.—Grants made under this sub-
section shall be made over a multiyear period not to
exceed 10 years, under such other terms as the Ad-
ministrator may require.
‘‘(3) GRANTS TO SPECIALIZED SMALL BUSINESS
INVESTMENT COMPANIES.—
‘‘(A) AUTHORITY.—In accordance with
this section, the Administrator may make
grants to specialized small business investment
companies to provide operational assistance to
smaller enterprises financed, or expected to be
financed, by such companies after the effective
date of the New Markets Venture Capital Pro-
gram Act of 2000.
‘‘(B) USE OF FUNDS.—The proceeds of a
grant made under this paragraph may be used
by the company receiving such grant only to
provide operational assistance in connection
with an equity investment (made with capital
raised after the effective date of the New Mar-
135
kets Venture Capital Program Act of 2000) in
a business located in a low-income geographic
area.
‘‘(C) SUBMISSION OF PLANS.—A special-
ized small business investment company shall
be eligible for a grant under this section only if
the company submits to the Administrator, in
such form and manner as the Administrator
may require, a plan for use of the grant.
‘‘(4) GRANT AMOUNT.—
‘‘(A) NEW
MARKETS
VENTURE
CAPITAL
COMPANIES.—The amount of a grant made
under this subsection to a New Markets Ven-
ture Capital company shall be equal to the re-
sources (in cash or in kind) raised by the com-
pany under with section 354(d)(2).
‘‘(B) OTHER ENTITIES.—The amount of a
grant made under this subsection to any entity
other than a New Markets Venture capital com-
pany shall be equal to the resources (in cash or
in kind) raised by the entity in accordance with
the requirements applicable to New Markets
Venture Capital companies set forth in section
354(d)(2).
136
‘‘(5) PRO RATA REDUCTIONS.—If the amount
made available to carry out this section is insuffi-
cient for the Administrator to provide grants in the
amounts provided for in paragraph (4), the Adminis-
trator shall make pro rata reductions in the amounts
otherwise payable to each company and entity under
such paragraph.
‘‘(b) SUPPLEMENTAL GRANTS.—
‘‘(1) IN
GENERAL.—The Administrator may
make supplemental grants to New Markets Venture
Capital companies and to other entities, as author-
ized by this part, under such terms as the Adminis-
trator may require, to provide additional operational
assistance to smaller enterprises financed, or ex-
pected to be financed, by the companies.
‘‘(2) MATCHING REQUIREMENT.—The Adminis-
trator may require, as a condition of any supple-
mental grant made under this subsection, that the
company or entity receiving the grant provide from
resources (in cash or in kind), other than those pro-
vided by the Administrator, a matching contribution
equal to the amount of the supplemental grant.
‘‘(c) LIMITATION.—None of the assistance made
available under this section may be used for any overhead
or general and administrative expense of a New Markets
137
Venture Capital company or a specialized small business
investment company.
‘‘SEC. 359. BANK PARTICIPATION.
‘‘(a) IN GENERAL.—Except as provided in subsection
(b), any national bank, any member bank of the Federal
Reserve System, and (to the extent permitted under appli-
cable State law) any insured bank that is not a member
of such system, may invest in any New Markets Venture
Capital company, or in any entity established to invest
solely in New Markets Venture Capital companies.
‘‘(b) LIMITATION.—No bank described in subsection
(a) may make investments described in such subsection
that are greater than 5 percent of the capital and surplus
of the bank.
‘‘SEC. 360. FEDERAL FINANCING BANK.
‘‘Section 318 shall not apply to any debenture issued
by a New Markets Venture Capital company under this
part.
‘‘SEC. 361. REPORTING REQUIREMENTS.
‘‘Each New Markets Venture Capital company that
participates in the program established under this part
shall provide to the Administrator such information as the
Administrator may require, including—
138
‘‘(1) information related to the measurement
criteria that the company proposed in its program
application; and
‘‘(2) in each case in which the company under
this part makes an investment in, or a loan or grant
to, a business that is not located in a low-income ge-
ographic area, a report on the number and percent-
age of employees of the business who reside in such
areas.
‘‘SEC. 362. EXAMINATIONS.
‘‘(a) IN GENERAL.—Each New Markets Venture
Capital company that participates in the program estab-
lished under this part shall be subject to examinations
made at the direction of the Investment Division of the
Small Business Administration in accordance with this
section.
‘‘(b) ASSISTANCE OF PRIVATE SECTOR ENTITIES.—
Examinations under this section may be conducted with
the assistance of a private sector entity that has both the
qualifications and the expertise necessary to conduct such
examinations.
‘‘(c) COSTS.—
‘‘(1) ASSESSMENT.—
‘‘(A) IN
GENERAL.—The Administrator
may assess the cost of examinations under this
139
section, including compensation of the exam-
iners, against the company examined.
‘‘(B) PAYMENT.—Any company against
which the Administrator assesses costs under
this paragraph shall pay such costs.
‘‘(2) DEPOSIT
OF
FUNDS.—Funds collected
under this section shall be deposited in the account
for salaries and expenses of the Small Business Ad-
ministration.
‘‘SEC. 363. INJUNCTIONS AND OTHER ORDERS.
‘‘(a) IN GENERAL.—Whenever, in the judgment of
the Administrator, a New Markets Venture Capital com-
pany or any other person has engaged or is about to en-
gage in any acts or practices which constitute or will con-
stitute a violation of any provision of this Act, or of any
rule or regulation under this Act, or of any order issued
under this Act, the Administrator may make application
to the proper district court of the United States or 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 jurisdiction of such actions and, upon a showing by
the Administrator that such New Markets Venture Capital
company or other person has engaged or is about to en-
140
gage in any such acts or practices, a permanent or tem-
porary injunction, restraining order, or other order, shall
be granted without bond.
‘‘(b) JURISDICTION.—In any proceeding under sub-
section (a), the court as a court of equity may, to such
extent as it deems necessary, take exclusive jurisdiction
of the New Market Venture Capital company and the as-
sets thereof, wherever located, and the court shall have
jurisdiction in any such proceeding to appoint a trustee
or receiver to hold or administer under the direction of
the court the assets so possessed.
‘‘(c) ADMINISTRATOR AS TRUSTEE OR RECEIVER.—
‘‘(1) AUTHORITY.—The Administrator may act
as trustee or receiver of a New Markets Venture
Capital company.
‘‘(2) APPOINTMENT.—Upon request of the Ad-
ministrator, the court may appoint the Adminis-
trator to act as a trustee or receiver of a New Mar-
kets Venture Capital company unless the court
deems such appointment inequitable or otherwise in-
appropriate by reason of the special circumstances
involved.
‘‘SEC. 364. ADDITIONAL PENALTIES FOR NONCOMPLIANCE.
‘‘(a) IN GENERAL.—With respect to any New Mar-
kets Venture Capital company that violates or fails to
141
comply with any of the provisions of this Act, of any regu-
lation issued under this Act, or of any participation agree-
ment entered into under this Act, the Administrator may
in accordance with this section—
‘‘(1) void the participation agreement between
the Administrator and the company; and
‘‘(2) cause the company to forfeit all of the
rights and privileges derived by the company from
this Act.
‘‘(b) ADJUDICATION OF NONCOMPLIANCE.—
‘‘(1) IN GENERAL.—Before the Administrator
may cause a New Markets Venture Capital company
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 Administrator or by the Attorney General.
142
‘‘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
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 Administrator, it shall be unlawful—
143
‘‘(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
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.
144
‘‘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 Administrator may re-
move or suspend any director or officer of any New Mar-
kets Venture Capital company.
‘‘SEC. 367. REGULATIONS.
‘‘The Administrator 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.—There are authorized to be ap-
propriated for fiscal years 2001 through 2006, to remain
available until expended, the following sums:
‘‘(1) Such subsidy budget authority as may be
necessary to guarantee $150,000,000 of debentures
under this part.
‘‘(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-
145
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-
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
146
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 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-INCOME GEO-
GRAPHIC
AREAS.—In 
calculating 
the 
out-
147
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-income
geographic area (as defined in section 351), to
the extent that the total of such amounts does
not exceed 50 percent of the company’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:
‘‘(D) INVESTMENTS IN LOW-INCOME GEO-
GRAPHIC AREAS.—In calculating the aggregate
outstanding 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-income
geographic area (as defined in section 351), to
the extent that the total of such amounts does
not exceed 50 percent of the company’s private
capital.’’.
148
(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-
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. 902. 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:
149
‘‘(n) 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-
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
150
expended, for each of fiscal years 2001 through
2006.’’.
Æ