rowers by private lending institutions, community develop-
ment financial institutions, and other lenders as the Sec-
retary considers appropriate.
‘‘(b) ELIGIBLE ACTIVITIES.—Activities for which
loans may be guaranteed under this title include the devel-
opment of land and facilities (including machinery and
equipment) for industrial or commercial usage (such as
the construction of new buildings and the rehabilitation
of abandoned or unoccupied buildings, and alterations,
conversion, or enlargement of existing buildings), or for
the provision of working capital.
‘‘(c) TERMS AND CONDITIONS.—
‘‘(1) IN GENERAL.—The Secretary may make
such guarantees upon application of the lenders and
upon such terms and conditions as the Secretary
may prescribe, except that no such guarantee shall
at any time exceed 90 percent of the amount of the
outstanding unpaid balance of such loans.
‘‘(2) PRESUMPTION OF VALIDITY.—Guarantees
under paragraph (1) shall be conclusive evidence
that the guarantee has been properly obtained, that
the underlying loan qualifies for such guarantee, and
that, but for fraud or material misrepresentation by
the holder, such guarantee will be presumed to be
valid, legal, and enforceable.
‘‘(3) FULL FAITH AND CREDIT OF U.S.—Guar-
antees under paragraph (1) shall have the full faith
and credit of the United States Government.
‘‘(4) LENDER RESPONSIBILITIES.—No guaran-
tee may be provided unless the lender is responsible
and makes adequate provision for servicing the loan
on reasonable terms and for protecting the financial
interest of the United States.
‘‘(5) PROHIBITION ON CERTAIN LOAN GUARAN-
TEES.—No loan may be guaranteed if the proceeds
of such loan are excluded from gross income for the
purposes of Chapter 1 of the Internal Revenue Code
of 1986 or if the guarantee provides sufficient collat-
eral or security, as determined by the Secretary, for
other obligations the income from which is so
excluded.
‘‘(d) PREFERRED LENDER PREFERENCE.—To the
extent feasible, the Secretary shall conduct the guarantee
program established under this subsection on a preferred
lender basis and authorize lenders, in accordance with
agreements entered into between the Secretary and such
lenders, to take such actions on the Secretary’s behalf as
the Secretary deems appropriate, including, but not lim-
ited to, the determination of eligibility and credit worthi-
ness and loan monitoring, collection and liquidation.
‘‘SEC. 712. PILOT EQUITY FINANCE PROGRAM.
‘‘(a) IN GENERAL.—In order to study the feasibility
and desirability of a program of equity financing, the Sec-
retary shall establish a 5-year pilot program under which
the Secretary may, either directly or through grants made
to eligible recipients (as defined in section 702), purchase
or commit to purchase nonvoting equity instruments, with
or without equity warrants or commit to guarantee the
payment of up to 50 percent of the redemption price of,
and dividends on, such equity instruments of private Unit-
ed States businesses or nonprofit organizations and asso-
ciations for the purpose of providing capital for any
project which is consistent with the provisions of this title.
‘‘(b) ESTABLISHMENT OF FUND.—For purposes of
conducting the pilot program provided under subsection
(a), the Secretary shall establish an Equity Investment
Revolving Fund to carry out the purposes of this section.
‘‘(c) DISPOSAL OF EQUITY INSTRUMENTS.—The Sec-
retary shall endeavor to dispose of any equity instruments
purchased or guaranteed under this section within the 10-
year period beginning on the date of the acquisition of
such interest.
‘‘(d) USE OF PAYMENTS.—
‘‘(1) USE OF PAYMENTS TO THE SECRETARY.—
Amounts received by the Secretary from the pay-
ment of dividends and the redemption of equity in-
struments shall be deposited in the Equity Invest-
ment Revolving Fund and shall be available to make
or guarantee additional equity investments consist-
ent with this section.
‘‘(2) USE OF PAYMENTS TO ELIGIBLE RECIPI-
ENT INTERMEDIARIES.—Of the amounts received by
eligible recipient intermediaries from the payment of
dividends and the redemption of equity instru-
ments—
‘‘(A) up to 50 percent may be retained by
such organizations to make or guarantee addi-
tional equity investments consistent with this
section; and
‘‘(B) no less than 50 percent shall be re-
turned to the Secretary to be deposited into the
Fund established under subsection (b) to make
or guarantee additional equity investments con-
sistent with this section.
‘‘(e) INVESTMENT OF EXCESS FUNDS.—If the Sec-
retary determines that the amount of money in the Fund
exceeds the current requirements of the Fund, the Sec-
retary may direct the Secretary of the Treasury to invest
such amounts in obligations of the United States, in obli-
gations guaranteed by the United States Government, or
in such other obligations or securities of the United States
as the Secretary of the Treasury deems appropriate.
‘‘(f) AUTHORIZATION OF APPROPRIATIONS.—In addi-
tion to the funds authorized to be appropriated under sec-
tion 705, there are authorized to be appropriated
$10,000,000 for fiscal year 1995, to carry out this section.
Such sums shall remain available until expended.
‘‘SEC. 713. TREATMENT OF REVOLVING LOAN FUNDS.
‘‘(a) IN GENERAL.—Amounts from grants under this
title which are used by an eligible recipient to establish
a revolving loan fund shall not be treated, except as pro-
vided by subsection (b), as amounts derived from Federal
funds for the purposes of any Federal law after such
amounts are loaned from the fund to a borrower and re-
paid to the fund.
‘‘(b) EXCEPTION.—Amounts described in subsection
(a) which are loaned from a revolving loan fund to a bor-
rower and repaid to the fund—
‘‘(1) may only be used for projects which are
consistent with the purposes of this title; and
‘‘(2) shall be subject to the financial manage-
ment, accounting, reporting, and auditing standards
which were originally applicable to such amounts.
‘‘(c) REGULATIONS.—Not later than 30 days after
the enactment of this section, the Secretary shall issue
regulations to carry out subsection (a).
‘‘(d) PUBLIC REVIEW AND COMMENT.—Before issu-
ing any final guidelines or administrative manuals govern-
ing the operation of revolving loan funds established using
amounts from grants under this title, the Secretary shall
provide reasonable opportunity for public review of and
comment on such guidelines and administrative manuals.
‘‘SEC. 714. SALE OF FINANCIAL INSTRUMENTS IN REVOLV-
ING LOAN FUNDS.
‘‘Any loan, loan guarantee, equity, or other financial
instrument in the portfolio of a Revolving Loan Fund may
be sold, at the discretion of the administrator of the Fund,
to a third party provided that the proceeds of the sale—
‘‘(1) shall be deposited in the Fund and only
used for projects which are consistent with the pur-
poses of this title, and
‘‘(2) shall be subject to the financial manage-
ment, accounting, reporting, and auditing standards
which were originally applicable to the financial
instrument.
‘‘SEC. 715. ECONOMIC DEVELOPMENT CHALLENGE GRANTS
DEMONSTRATION PROJECT.
‘‘(a) IN GENERAL.—In order to study the feasibility
and desirability of using challenge grants to generate new
pools of investment capital in areas suffering from long-
term economic deterioration, the Secretary shall establish
a multiyear demonstration project under which the Sec-
retary shall provide grants to selected recipients, to be
matched by the recipients 1 dollar for every 2 Federal dol-
lars, for the purpose of establishing substantially leveraged
financing for business development and other innovative
economic development efforts.
‘‘(b) FEDERAL AND COMMUNITY CONTRIBUTIONS.—
‘‘(1) IN GENERAL.—The Secretary shall grant 2
dollars for every 1 dollar raised by each selected re-
cipient, up to $10,000,000 per year per selected re-
cipient.
‘‘(2) USE OF OTHER FEDERAL FUNDS IN CON-
JUNCTION WITH CHALLENGE GRANT.—Funds from
other Federal programs may be used in conjunction
or merged with the challenge grant and matching
funds to form a larger investment fund.
‘‘(c) ESTABLISHMENT AND USE OF FUNDS.—
‘‘(1) ESTABLISHMENT.—For purposes of this
Act, an investment fund established by a selected re-
cipient consists of—
‘‘(A) the economic development challenge
grant received by the selected recipient;
‘‘(B) the matching funds required under
subsection (b); and
‘‘(C) any such other funds that may be de-
rived from other sources, including other Fed-
eral funds.
‘‘(2) USE.—An investment fund shall be used
by the selected recipients for the purposes of gener-
ating long-term sustainable economic development
and job growth in areas identified by the selected re-
cipients, pursuant to the requirements and limita-
tions of eligibility and performance in subsections
(d), (e), (f), (g) and (h).
‘‘(d) ELIGIBLE RECIPIENTS.—The Secretary shall
make grants to any eligible recipients for use in an area
which must meet 1 or more of the following criteria:
‘‘(1) The area has a per capita income of 80
percent or less of the national average.
‘‘(2) The area has an unemployment rate 1 per-
cent above the national average percentage for the
more recent 24-month period for which statistics are
available.
‘‘(3) The area has been determined by the Sec-
retary to have at least 1 of the following conditions:
‘‘(A) A large concentration of low-income
persons (as defined in section 401(e)).
‘‘(B) Areas having substantial outmigra-
tion.
‘‘(C) Substantial underemployment or un-
employment.
An eligible recipient may include any local government or
group of local governments, economic development dis-
trict, Indian tribe, public or private nonprofit organization
or association, community-based organization, business or
worker organization, or any consortium of such entities,
that is able to demonstrate to the satisfaction of the Sec-
retary that they can carry out the objectives of this pro-
gram pursuant to the criteria and requirements estab-
lished in this section.
‘‘(e) SELECTION OF DEMONSTRATION PROJECTS.—
‘‘(1) IN GENERAL.—The Secretary shall make
grants to selected recipients from 3 to 5 areas suf-
fering from long-term economic distress.
‘‘(2) DISTRIBUTION.—At least 1 selected recipi-
ent shall be from a rural area, 1 from a declining
industrial area, and 1 from an area that is a com-
bination of rural, small metropolitan, and suburban
communities.
‘‘(3) INDUSTRIAL
RETENTION
STRATEGY
RE-
QUIREMENT.—Of the 3 recipients described in para-
graph (2), at least 1 of the projects selected shall in-
clude an industrial retention strategy.
‘‘(f) GRANT SELECTION PROCESS.—
‘‘(1) NATIONAL COMPETITION.—The Secretary
shall select recipients of the challenge grants
through a nationally competitive process.
‘‘(2) ELIGIBILITY
REQUIREMENT.—Each se-
lected recipient must submit a comprehensive strat-
egy for generating sustained, long-term economic
growth and for both preserving and creating high-
quality jobs.
‘‘(3) PREFERENCE FOR CERTAIN PROJECTS.—
The Secretary shall give preference to eligible recipi-
ents which—
‘‘(A) utilize Federal the grant plus match-
ing funds to further leverage private and public
capital to create an even larger economic devel-
opment investment fund;
‘‘(B) represent consortia or partnerships
comprised of at least 2 or more of the groups
identified in subsection (d); or
‘‘(C) intend to use their investment funds
to finance or leverage financing for new busi-
ness development and startups, industrial serv-
ices, industrial modernization of local-based
firms or industrial retention (including em-
ployee stock ownership plans and worker or
management buyouts), or other economic devel-
opment strategies that illustrate ‘best practices’
in economic development.
‘‘(4) BROAD-BASED PARTICIPATION TO BE EN-
COURAGED.—The Secretary shall strongly encourage
broad-based participation of public and private enti-
ties within an area in the development and imple-
mentation of the challenge grant proposals submit-
ted by eligible recipients.
‘‘(g) LIMITATIONS.—The investment funds estab-
lished by the selected recipients shall—
‘‘(1) not be used to permit units of State and
local government to offer tax inducements to attract
businesses to locate in the area; and
‘‘(2) be subject to the same conditions described
in section 202(b)(1).
No area may receive an economic development challenge
grant if it has been designated an empowerment or enter-
prise community under section 13301 of the Omnibus
Budget Reconciliation Act of 1993.
‘‘(h) PERFORMANCE
EVALUATIONS; REPORT
TO
CONGRESS.—
‘‘(1) EVALUATION
OF
EFFECTIVENESS.—The
Secretary shall conduct performance evaluations of
the demonstration challenge grant project to assess
the effectiveness of this kind of program in generat-
ing sustained economic growth and job creation in
areas of the Nation experiencing long-term economic
distress.
‘‘(2) REPORT.—Based on the evaluations con-
ducted pursuant to paragraph (1), the Secretary
shall submit an annual report to Congress with rec-
ommendations for expansion, modification or termi-
nation of the program.
‘‘(i) AUTHORIZATION OF APPROPRIATIONS.—In addi-
tion to the funds authorized to be appropriated under sec-
tion 705, there is authorized to be appropriated
$30,000,000 for fiscal year 1995 to carry out this section.
Such sums shall remain available until expended.
‘‘Subtitle C—Business Development
Assistance
‘‘SEC. 721. FINDINGS, PURPOSES, AND DEFINITIONS.
‘‘(a) FINDINGS.—The Congress hereby finds the
following:
nologies, and processes than can reasonably be ex-
pected by the Federal Government performing this
function.
‘‘(b) PURPOSES.—The purposes of this subtitle are
as follows:
‘‘(1) To provide assistance to private-sector
United States businesses, located in areas in need of
economic development, to commercialize patents, li-
censes, technologies, and processes owned, or held in
whole or part, by the Federal Government.
‘‘(2) To create new employment opportunities
by facilitating the commercialization of patents, li-
censes, technologies, and processes by United States
businesses and entrepreneurs in areas in need of
economic development.
‘‘(3) To develop a single, comprehensive data
base of information on patents, licenses, tech-
nologies, and processes owned, or held in whole or
part, by the Federal Government, which is standard-
ized and easily accessible.
‘‘(4) To heighten the awareness of United
States businesses and entrepreneurs of the availabil-
ity for commercialization of patents, licenses, tech-
nologies, and processes owned, or held in whole or
part, by the Federal Government.
‘‘(c) DEFINITIONS.—For purposes of this subtitle,
the following definitions shall apply:
‘‘(1) SECRETARY.—The term ‘Secretary’ means
the Secretary of Commerce.
‘‘(2) CORPORATION.—The term ‘Corporation’
means the Business Development and Technology
Commercialization Corporation established under
this subtitle.
‘‘(3) BOARD.—The term ‘Board’ means the
Board of Directors of the Business Development and
Technology Commercialization Corporation.
‘‘(4) QUALIFIED CONCERN.—The term ‘quali-
fied concern’ means a United States-based consor-
tium, a private United States business, or an edu-
cational institution participating in a joint project
with 1 or more private United States businesses, for
the development and commercialization of patents,
licenses, processes, and technologies—
‘‘(A) owned or held in whole or part by
Federal departments, agencies, or government-
controlled corporations;
‘‘(B) developed in Federal laboratories;
‘‘(C) arising in the course of federally
funded research at educational institutions,
other units of government, or with private con-
cerns; or
‘‘(D) which are made available to the Fed-
eral Government by private concerns.
‘‘SEC. 722. CONSOLIDATION OF INFORMATION ON TECH-
NOLOGIES.
‘‘(a) ESTABLISHMENT
OF DATA.—The Secretary
shall establish and maintain an integrated, comprehensive
data base describing all patents, licenses, technologies, and
processes owned, or held in whole or part, by the Federal
Government, or which originated in the course of federally
funded research in which the Federal Government has an
interest.
‘‘(b) STANDARDIZATION AND ACCESSIBILITY OF IN-
FORMATION.—The Secretary shall take such steps as are
necessary to ensure that the information contained in the
data base established under subsection (a) is in a stand-
ardized form, is accessible and usable in a manner as sim-
ple and easy to use as possible, recognizing the needs of
small- and medium-sized businesses.
‘‘(c) RESPONSIBILITIES.—In carrying out this sec-
tion, the Secretary shall—
‘‘(1) consult with and, to the extent practicable,
utilize the capabilities of other executive agencies, as
appropriate, to ensure the efficient and effective im-
plementation of this section; and
‘‘(2) explore, with other executive agencies,
ways to avoid duplication of effort by consolidating
the administration of the program established by
this section with any other similar Federal program,
and as part of such consolidation may delegate ad-
ministrative functions, as necessary and appropriate,
to another executive agency.
‘‘(d) OTHER FEDERAL AGENCIES.—Other executive
agencies shall provide such information, and in such form,
as determined by the Secretary and shall cooperate with
the Secretary in carrying out this section.
‘‘(e) ACCESS TO THE DATA BASE.—
‘‘(1) ACCESS TO THE DATA BASE BY THE COR-
PORATION.—Except as provided in paragraph (3),
the Secretary shall provide unlimited access to the
data base established under this section to the Busi-
ness Development and Technology Commercializa-
tion Corporation established under this part, without
fee, to assist the Corporation in meeting its respon-
sibilities under this Part.
‘‘(2) ACCESS TO THE DATA BASE BY THE PUB-
LIC.—Except as provided in paragraph (3), the Sec-
retary shall, by regulation, develop and implement
procedures providing for access to the data base es-
tablished under this section to members of the gen-
eral public.
‘‘(3) RESTRICTIONS.—If, in consultation with
the heads of other executive agencies, the Secretary
determines that access by the Corporation or any
other person to information contained in the data
base established under this section would—
‘‘(A) threaten national security;
‘‘(B) violate the proprietary rights of any
private interest; or
‘‘(C) be otherwise inappropriate,
the Secretary shall take such steps as the Secretary
may determine to be appropriate to limit access to
the information in the data base described in sub-
paragraph (A), (B), or (C) to the Corporation or
any other person.
‘‘(f) REVIEW OF CURRENT FEDERAL TECHNOLOGY
TRANSFER EFFORTS.—
‘‘(1) IN GENERAL.—The Secretary shall con-
duct a review of all technology transfer and commer-
cialization activities within all Federal departments,
agencies, and laboratories, or which are otherwise
supported by federal funds. This review shall iden-
tify those activities which may overlap or duplicate
the technology transfer and commercialization activi-
ties provided for under this subtitle.
‘‘(2) REPORTS.—Before the end of the 1-year
period beginning on the date of the enactment of the
Economic Development and Financing Act of 1994,
the Secretary shall issue a report to the Congress
describing in detail—
‘‘(A) the findings of the review directed
under paragraph (1),
‘‘(B) the funding levels of each existing
federal technology transfer and commercializa-
tion activities, and
‘‘(C) recommendations for the modification
or elimination of any existing federal technology
transfer and commercialization activities which
he finds to be duplicative of the activities pro-
vided for under this subtitle.
‘‘SEC. 723. BUSINESS DEVELOPMENT AND TECHNOLOGY
COMMERCIALIZATION CORPORATION.
‘‘(a) ESTABLISHMENT OF CORPORATION.—
‘‘(1) IN GENERAL.—There shall be established
a Business Development and Technology Commer-
cialization Corporation (hereafter in this section re-
ferred to as the ‘Corporation’).
‘‘(2) PURPOSE.—The Corporation shall be oper-
ated for the purpose of fostering economic growth,
assisting in the creation of new employment oppor-
tunities, and strengthening the industrial base of the
United States by providing credit for businesses and
by facilitating the transfer and commercialization of
patents, licenses, processes, and technologies—
‘‘(A) owned or held in whole or part by
Federal departments, agencies, or government
controlled corporations;
‘‘(B) developed in Federal laboratories;
‘‘(C) arising in the course of federally
funded research at educational institutions,
other units of government, or with private con-
cerns; and
‘‘(D) which are made available by private
concerns.
‘‘(3) CORPORATION
NOT
AN
ESTABLISHMENT
OF
THE
UNITED
STATES.—The Corporation shall
not be an agency or establishment of the United
States.
‘‘(b) PROCESS OF ORGANIZATION.—
‘‘(1) INCORPORATION.—
‘‘(A) IN
GENERAL.—The Secretary of
Commerce, the Secretary of Labor, and the Ad-
ministrator of the Small Business Administra-
tion shall serve as the incorporators of the
Business Development and Technology Com-
mercialization Corporation and as the initial
members of the Board of Directors established
under subsection (c)(1) until their successors
are elected and qualified.
‘‘(B) NECESSARY ACTION AUTHORIZED.—
The incorporators referred to in subparagraph
(A) shall take such other actions as may be nec-
essary to establish the Corporation, including
the filing of articles of incorporation.
‘‘(2) OWNERSHIP OF THE CORPORATION.—
‘‘(A) RETENTION
OF
FEDERAL
GOVERN-
MENT
INTEREST.—The Federal Government
shall retain a 60 percent nonvoting equity own-
ership of the Corporation, except as otherwise
provided under this subtitle.
‘‘(B) SOLICITATION
OF
PROPOSALS
FOR
EQUITY INVESTMENT AND MANAGEMENT.—Be-
fore the end of the 6-month period beginning on
the date of the enactment of the Economic De-
velopment and Financing Act of 1994, the Sec-
retary of Commerce shall solicit proposals for
the sale of the remaining 40 percent of the eq-
uity ownership in the Corporation to a United
States private entity or consortium which will
assume the management and operation of the
Corporation.
‘‘(C) DEADLINE FOR TRANSFER.—The sale
of the equity ownership interests pursuant to
paragraph (3) shall be completed before the end
of the 6-month period beginning on the date of
the enactment of the Economic Development
and Financing Act of 1994.
‘‘(D) SUBSEQUENT
STOCK
OFFERING.—
Any subsequent stock offering in the Corpora-
tion will be managed in such a manner that 60
percent of such offering is conveyed as
nonvoting equity ownership, without cost, to the
Federal Government.
‘‘(3) SELECTION
CRITERIA
AND
PROCEDURES
FOR THE SALE OF 40 PERCENT OF THE EQUITY IN
THE CORPORATION.—
‘‘(A) IN GENERAL.—The President, in con-
sultation with the Secretary of Commerce, shall
make the final selection of a proposal for the
sale of 40 percent of the equity in the Corpora-
tion, as provided under this subsection.
‘‘(B) CRITERIA
FOR
SELECTING
A
PRO-
POSAL TO RECOMMEND TO THE PRESIDENT.—
In selecting a proposal to recommend to the
President for the sale of 40 percent of the eq-
uity in the Corporation, as described in sub-
paragraph (A), the Secretary of Commerce shall
take into consideration the following factors—
‘‘(i) the quality of the operational
plan;
‘‘(ii) the soundness of the financing of
the organization and of the operational
plan;
‘‘(iii) the qualifications of, and the di-
versity of talents and skills represented by,
the submitters of the proposal, including
the extent to which a combination of orga-
nizations is submitting a joint proposal;
‘‘(iv) whether a State government, or
unit of a State government, is participat-
ing financially with the organization sub-
mitting a proposal;
‘‘(v) the intentions of the submitters
of the proposal to locate the headquarters
of the Corporation in an area which is not
located in the 50 largest Metropolitan Sta-
100
tistical Areas, based on the 1990 Census;
and
‘‘(vi) such other factors as the
incorporators determine to be appropriate
in meeting the objectives of this Act.
‘‘(C) PROCEDURES FOR SELECTING A PRO-
POSAL TO RECOMMEND TO THE PRESIDENT.—
In selecting a proposal to recommend to the
President for the sale of 40 percent of the eq-
uity in the Corporation, as described in sub-
paragraph (A), the Secretary of Commerce shall
ensure that in the selection process—
‘‘(i) not less than 3 proposals are
identified as proposals to receive further
consideration, as provided in clauses (ii)
and (iii), except that, if fewer than 3 pro-
posals are received, each of them shall re-
ceive further consideration;
‘‘(ii) a review procedure is imple-
mented under which the sponsors of the
proposals identified in clause (i) are pro-
vided an opportunity to make personal
presentations of their proposals to the Sec-
retary or the Secretary’s designee; and
101
‘‘(iii) individual negotiations for the
revision of proposals identified in clause (i)
may be entered into.
‘‘(4) CONVERSION OF NONVOTING EQUITY TO
VOTING EQUITY.—Before the solicitation for propos-
als in accordance with paragraph (2)(B), the Sec-
retary shall prescribe regulations setting forth the
circumstances under which the Federal Govern-
ment’s 60 percent nonvoting equity ownership may
be converted into voting equity ownership in order to
meet the objectives of this Act or otherwise protect
the interests of the American taxpayers.
‘‘(c) DIRECTORS, OFFICERS, AND EMPLOYEES.—
‘‘(1) BOARD OF DIRECTORS.—
‘‘(A) APPOINTMENT
AND
NUMBER.—The
Corporation shall be under the management of
a Board of Directors (hereafter in this section
referred to as the ‘Board’) consisting of individ-
uals who are citizens of the United States, of
whom 1 shall be elected by the Board to serve
as chairperson.
‘‘(B) TERM.—The members of the Board
shall be elected annually by the stockholders of
the Corporation.
102
‘‘(C) PROHIBITION ON CONFLICTS OF IN-
TEREST.—
‘‘(i) IN
GENERAL.—A director may
not participate in the deliberations on, or
vote on, a matter regarding an application,
claim, or other matter pending before the
Corporation if, to the director’s knowledge,
the director, the director’s spouse, minor
child, parent, sibling, or partner, or any
organization, other than the Corporation,
in which the director is serving as an offi-
cer, director, trustee, partner, or employee,
or any person with whom the director is
negotiating or has any arrangement con-
cerning perspective employment, has a fi-
nancial interest in the matter.
‘‘(ii) CONSEQUENCE OF VIOLATION.—
A director who violates this subparagraph
shall be subject to removal from the
Board, but such a violation shall not im-
pair, nullify, or otherwise affect the valid-
ity of any otherwise lawful action by the
Corporation in which such director partici-
pated.
‘‘(D) COMPENSATION OF THE BOARD.—
103
‘‘(i) AMOUNT.—The rate of compensa-
tion of members of the Board shall be
fixed by the stockholders of the Corpora-
tion.
‘‘(ii) FUNDS.—Funds for such com-
pensation shall be drawn from the capital
and earnings of the Corporation.
‘‘(E) BYLAWS.—The Board may adopt and
amend bylaws governing the operation of the
Corporation in a manner consistent with the
provisions of this title and the articles of incor-
poration of the Corporation.
‘‘(2) OFFICERS AND EMPLOYEES.—
‘‘(A) APPOINTMENT.—The Board shall ap-
point a chief executive officer, who shall have
the authority to appoint such other officers and
employees as the officer determines to be nec-
essary to carry out the provisions of this section
and the functions of the Corporation.
‘‘(B) PROHIBITION ON CONFLICTS OF IN-
TEREST.—
‘‘(i) IN GENERAL.—An officer or em-
ployee may not participate in a matter re-
garding an application, claim, or other
matter pending before the Corporation if,
104
to such person’s knowledge, the person, the
person’s spouse, minor child, parent, sib-
ling, or partner, or an organization, other
than the Corporation, in which the person
is serving as an officer, director, trustee,
partner, or employee, or any person with
whom the person is negotiating or has any
arrangement concerning perspective em-
ployment, has a financial interest in the
matter.
‘‘(ii) CONSEQUENCE OF VIOLATION.—
An officer or employee who violates this
subparagraph shall be subject to termi-
nation, but such a violation shall not im-
pair, nullify, or otherwise affect the valid-
ity of any otherwise lawful action by the
Corporation in which such officer or em-
ployee participated.
‘‘(C) COMPENSATION
OF
OFFICERS
AND
EMPLOYEES.—
‘‘(i) IN GENERAL.—Subject to clause
(i), the rate of compensation of the chief
executive officer, and all officers and em-
ployees, of the Corporation shall be fixed
by the Board.
105
‘‘(ii) DELEGATION TO C.E.O.—At the
discretion of the Board, the Board may
delegate to the chief executive officer, sub-
ject to the provisions of subparagraph (B),
the authority to fix the rate of compensa-
tion for other officers and employees.
‘‘(D) SOURCE OF FUNDS FOR COMPENSA-
TION.—Funds for compensation for the chief
executive officer, and for all officers and em-
ployees, shall be drawn from the capital and
earnings of the Corporation.
‘‘(E) TENURE.—Officers and employees
shall serve at the pleasure of the Board.
‘‘(d) GENERAL POWERS.—The Corporation shall
have the power to do the following:
‘‘(1) Have succession in the name of the Cor-
poration.
‘‘(2) Adopt, alter, and use a corporate seal.
‘‘(3) Sue and be sued in the name of the Cor-
poration.
‘‘(4) Make and carry out contracts.
‘‘(5) Exercise such other incidental powers not
inconsistent with this section that are necessary or
appropriate to carry out the purposes and functions
of the Corporation, including the usual powers con-
106
ferred upon a corporation by the District of Colum-
bia Business Corporation Act.
‘‘(6) Modify the name of the Corporation.
‘‘(e) PROMOTION OF TECHNOLOGIES.—
‘‘(1) MARKETING
OF
TECHNOLOGIES.—The
Corporation 
shall 
undertake 
an 
aggressive,
multifaceted outreach program to increase awareness
of the availability of patents, licenses, processes, and
technologies to qualified concerns under this subtitle.
This program shall emphasize the use of new infor-
mation technologies, including the utilization of
cable television and the modern electronic media,
and the data base established under this subtitle.
‘‘(2) UTILIZATION OF CABLE TELEVISION.—
‘‘(A) IN GENERAL.—In implementing the
outreach program provided under paragraph
(1), the Corporation shall enter into contracts
for the establishment of a cable television net-
work devoted to marketing efforts for the com-
mercialization of patents, licenses, processes,
and technologies—
‘‘(i) owned or held in whole or part by
Federal departments, agencies, or govern-
ment controlled corporations,
107
‘‘(ii) developed in Federal labora-
tories,
‘‘(iii) arising in the course of federally
funded research at educational institutions,
other units of government or with private
concerns; and
‘‘(iv) which are otherwise made avail-
able to the government by private con-
cerns.
‘‘(B) PROMOTIONAL FEES.—Under terms
negotiated between the Secretary and the Cor-
poration, the Secretary is authorized to make
payments to the Corporation for promotional
fees for the production of segments for broad-
cast over cable television, or other appropriate
media, which identify—
‘‘(i) the technologies described in
paragraph (A);
‘‘(ii) their potential commercial appli-
cations; and
‘‘(iii) methods available for obtaining
additional information on the technologies.
‘‘(3) TECHNICAL ASSISTANCE.—
‘‘(A) IN GENERAL.—The Corporation shall,
upon request, provide technical assistance and
108
services, as appropriate and needed, to qualified
concerns under this subtitle.
‘‘(B) FEES.—The Corporation may—
‘‘(i) charge fees for technical assist-
ance and services provided under this sec-
tion in amounts sufficient to cover the rea-
sonable cost of such assistance and serv-
ices; and
‘‘(ii) waive such fees on a case-by-case
basis.
‘‘(4) OUTREACH
TO
SPECIFIC
AREAS.—The
Corporation shall seek to ensure that qualified con-
cerns located in areas determined by the Secretary
of Commerce to have a depressed economy or chron-
ically high unemployment are notified of the avail-
ability assistance through the program established
under this section and, to the extent practicable, to
encourage and facilitate the participation of such
qualified concerns in such program.
‘‘(f) AUTHORITY
TO REPRESENT
THE GOVERN-
MENT.—
‘‘(1) IN GENERAL.—In accordance with regula-
tions prescribed by the Secretary, the Corporation
shall act as an agent, and represent the interests, of
the Federal Government in facilitating the transfer
109
of patents, licenses, processes, and technologies to
qualified concerns under this Act.
‘‘(2) RIGHTS OF QUALIFIED CONCERNS.—In ac-
cordance with regulations promulgated by the Sec-
retary, the Corporation is authorized to convey, to
qualified concerns, under terms and conditions to be
negotiated between the Corporations and qualified
concerns, title, exclusive license, nonexclusive license,
or other rights which may be necessary and appro-
priate to facilitate the commercialization of patents,
licenses, processes, and technologies as provided
under this Act.
‘‘(3) MINIMUM RIGHTS OF THE FEDERAL GOV-
ERNMENT.—In the conveyance of rights to qualified
concerns as provided for under paragraph (2), the
Corporation shall ensure the following:
‘‘(A) The conveyance agreement contains
language providing for the right of the Corpora-
tion to revoke the rights provided under para-
graph (2) if—
‘‘(i) the qualified concern does not
demonstrate that it is undertaking a good
faith effort to achieve the commercializa-
tion of the patent, license, process, or tech-
nology; or
110
‘‘(ii) the Secretary certifies that the
interests of national security or the general
welfare of the American people necessitates
the revocation of such rights.
‘‘(B) The Federal Government retains a li-
cense to such patents, processes, and tech-
nologies for its own use.
‘‘(C) The Federal Government receives in
compensation for the conveyance of such
rights—
‘‘(i) royalty fees;
‘‘(ii) partial equity ownership in the
qualified concerns to whom such rights are
conveyed;
‘‘(iii) the right to share in the earn-
ings of the qualified entity proportionate to
the value of the rights so conveyed; or
‘‘(iv) a sum of money or other com-
pensation that the Corporation determines
to be appropriate.
‘‘(g) FINANCING OF CORPORATION.—
‘‘(1) CAPITAL
STOCK.—The Corporation may
issue and have outstanding, in such amounts as it
shall determine, shares of capital stock, without par
111
value, which shall carry voting rights and be eligible
for dividends.
‘‘(2) NONVOTING SECURITY ISSUES AND CER-
TIFICATES
OF
INDEBTEDNESS.—The Corporation
may issue, in addition to the stock authorized by
paragraph (1) of this section, nonvoting securities,
bonds, debentures, and other certificates of indebted-
ness as it may determine.
‘‘(h) CONSULTATION WITH FEDERAL AGENCIES, AND
WITH PRIVATE PARTIES.—
‘‘(1) CONSULTATION
WITH
FEDERAL
AGEN-
CIES.—In carrying out this title, the Board and the
Corporation shall consult frequently with the Sec-
retary of Commerce, and such Federal agencies and
departments as is appropriate, to ensure coordina-
tion and the maximum utilization of all related Fed-
eral resources to promote technology transfer and
commercialization.
‘‘(2) CONSULTATION WITH PRIVATE PARTIES.—
In carrying out this section, the Board and the Cor-
poration shall solicit comments from private parties,
including representatives of finance, industry, and
organized labor on the role of the Corporation and
the needs of private parties.
112
‘‘(i) AUDIT
BY
COMPTROLLER
GENERAL.—The
Comptroller General of the United States may audit the
financial transactions of the Corporation. For the pur-
poses of carrying out such an audit, the Comptroller Gen-
eral shall have access to all books, records, and property
belonging to, or in the possession of, the Corporation. In
the case of a person or entity which has entered into a
financial relationship with the Corporation, the Comptrol-
ler General shall have access only to those books, records,
and property belonging to, or in the possession of, the per-
son or entity which pertain to the Corporation and which
are necessary to carry out the audit. The Comptroller Gen-
eral shall make a report of each such audit to the Congress
and the President.
‘‘(j) ADMINISTRATION.—
‘‘(1) HEARINGS.—The Board may hold such
hearings, sit and act at such times and places, take
such testimony, receive such evidence, and publish or
otherwise distribute so much of its proceedings and
reports as it may deem advisable.
‘‘(2) OFFICE
SPACE
AND
EQUIPMENT.—The
Board may acquire, furnish, and equip such office
space as it determines necessary.
‘‘(3) NECESSARY EXPENSES.—The Board may
incur such necessary expenses and exercise such
113
powers as are consistent and reasonably required to
perform its functions.
‘‘(4) RECORDS.—To the extent permitted by
law, all appropriate records and papers of the Board
shall be made available for public inspection.
‘‘(5) AID FROM FEDERAL AGENCIES.—Upon the
request of the Board, the head of a Federal depart-
ment or agency is authorized to—
‘‘(A) furnish to the Board such informa-
tion as the Board deems necessary for carrying
out its functions and as is available to the agen-
cy; and
‘‘(B) detail for temporary duty, on a reim-
bursable basis, such personnel as the Board
deems necessary to carry out its functions.
‘‘(k) MISCELLANEOUS PROVISIONS.—
‘‘(1) JURISDICTION.—
‘‘(A) IN
GENERAL.—Whenever the Cor-
poration is a party to any civil action under this
title, such action shall be deemed to arise under
the laws of the United States. No attachment
or execution may be issued against the Corpora-
tion, or any property thereof, prior to entry of
final judgment.
114
‘‘(B) CITIZENSHIP OF CORPORATION.—The
Corporation shall be deemed to be a citizen only
of the District of Columbia for the purpose of
determining the original jurisdiction of the dis-
trict courts of the United States in civil actions
to which the Corporation is a party.
‘‘(2) BUSINESS
ACTIVITY
AND
QUALIFICA-
TION.—The Corporation shall be deemed to be quali-
fied to do business in each State in which it per-
forms any activity authorized under this title.
‘‘SEC. 724. ASSISTANCE TO BUSINESSES IN SECURING FI-
NANCING.
‘‘(a) INFORMATION CLEARINGHOUSE.—The Corpora-
tion established under this subtitle shall act as a one-stop
clearinghouse for information to assist qualified concerns
identify sources of business development and technology
commercialization financing available through the Federal
Government as well as through applicable State and local
government programs and through private sources.
‘‘(b) AGENT OF THE FEDERAL GOVERNMENT.—The
Corporation may act as an agent of the Federal Govern-
ment for purposes of accepting applications for financial
assistance and their submission to the appropriate Federal
agency on behalf of a qualified concern.
115
‘‘SEC. 725. TECHNICAL ASSISTANCE FOR LENDERS AND
BORROWERS.
‘‘(a) IN GENERAL.—The Corporation shall, upon re-
quest, provide technical assistance and services, as appro-
priate and needed, to lenders and borrowers under this
title, and shall ensure that such lenders and borrowers
have ready access to appropriate assistance in order to aid
such lenders and borrowers in achieving the purposes of
this subtitle.
‘‘(b) FEES.—The Corporation may—
‘‘(1) charge fees for technical assistance and
services provided under this section in amounts suf-
ficient to cover the reasonable cost of such assist-
ance and services; and
‘‘(2) waive such fees on a case-by-case basis.’’.
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