HR 4766 IH
(c) PREFERRED LENDER PREFERENCE.—To the ex-
tent feasible, the Secretary shall exercise the guarantee
authority established under this section 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.
(d) TARGET SUBSIDY RATE.—In exercising the loan
guarantee authority provided under this section, the Sec-
retary shall attempt to administer the program in a man-
ner which results in a subsidy rate not to exceed approxi-
mately 6 percent of the amount of the overall loan guaran-
tees.
(e) AUTHORIZATION OF APPROPRIATIONS.—Of the
funds authorized to be appropriated under section 106,
for purposes of this section there are authorized to be ap-
propriated $50,000,000 per fiscal year to cover the costs
(as defined in section 502(5) of the Federal Credit Reform
Act of 1990 (2 U.S.C. 661a(5))) of loan guarantees issued
pursuant to subsection (b)(3) of such section. Such sums
shall remain available until expended.
HR 4766 IH
SEC. 102. INTEREST RATE SUBSIDY DEMONSTRATION PRO-
GRAM.
(a) IN GENERAL.—In order to study the feasibility
and desirability of a program of interest rate subsidies for
economic growth and stabilization in communities facing
economic distress, the Secretary is authorized to pay inter-
est rate subsidies to private lending institutions, commu-
nity development financial institutions, and other lenders
as the Secretary considers appropriate, for loans made to
private borrowers.
(b) TERMS AND CONDITIONS.—The Secretary may
pay interest rate subsidies upon application of the lenders
and upon such terms and conditions as the Secretary may
prescribe, except that no interest rate subsidy may be pro-
vided 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.
(c) PREFERRED LENDER PREFERENCE.—To the ex-
tent feasible, the Secretary shall exercise the interest rate
subsidy authority established under this section on a pre-
ferred 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 be-
half as the Secretary deems appropriate, including, but
not limited to, the determination of eligibility and credit
worthiness and loan monitoring, collection and liquidation.
HR 4766 IH
SEC. 103. EQUITY FINANCE DEMONSTRATION PROGRAM.
(a) IN GENERAL.—In order to study the feasibility
and desirability of a program of equity financing for eco-
nomic growth and stabilization in communities facing eco-
nomic distress, the Secretary is authorized to establish a
demonstration program under which the Secretary may di-
rectly, 
or 
indirectly 
through 
grants 
to 
eligible
intermediaries, purchase or commit to purchase warrants,
subordinated debt, or nonvoting preferred securities of pri-
vate United States businesses or nonprofit organizations
and associations.
(b) ESTABLISHMENT OF FUND.—For purposes of
conducting the program provided under subsection (a), the
Secretary shall establish an Equity Investment Revolving
Fund.
(c) DISPOSAL OF EQUITY INSTRUMENTS.—The Sec-
retary shall endeavor to dispose of any financial instru-
ments purchased or guaranteed under this section within
a period of 10 years after their date 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 financial
instruments acquired under this section shall be de-
posited in the Equity Investment Revolving Fund
HR 4766 IH
and shall, subject to appropriations, be available to
make or guarantee additional investments consistent
with this section.
(2) 
USE
OF
PAYMENTS
TO
ELIGIBLE
INTERMEDIARIES.—Of the amounts received by eligi-
ble recipient intermediaries from the payment of
dividends and the redemption of financial instru-
ments acquired under this section—
(A) up to 50 percent may be retained by
such eligible intermediaries to make or guaran-
tee additional 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 investments consistent
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. Pro-
HR 4766 IH
vided, however, that any subsequent use of monies so in-
vested shall be subject to appropriations.
SEC. 104. SECONDARY MARKET CREDIT ENHANCEMENT
DEMONSTRATION PROGRAM.
In order to study the feasibility and desirability of
a program of providing credit enhancements to pools of
financial instruments related to economic growth and sta-
bilization activities in communities facing economic dis-
tress, the Secretary is authorized to establish a dem-
onstration program under which the Secretary may pro-
vide credit enhancements to pools of financial instruments
related to economic growth and stabilization activities in
such areas.
SEC. 105. PERFORMANCE EVALUATIONS; REPORT TO CON-
GRESS.
(a) PERFORMANCE EVALUATIONS.—The Secretary
shall conduct performance evaluations of each of the dem-
onstration projects established under this Act to assess
their effectiveness in promoting economic growth and sta-
bilization in communities facing economic distress.
(b) ANNUAL REPORT.—Based on the evaluations
conducted under subsection (a), the Secretary shall pre-
pare and submit annually a report to the Congress con-
taining a full and detailed account of operations under this
Act. Such a report shall include—
HR 4766 IH
(1) performance measures established under
subsection (a);
(2) an audit setting forth the amount, type, re-
cipient, and source of disbursements, receipts, and
losses sustained as a result of operations under this
Act during the preceding fiscal year and since incep-
tion of the demonstration programs; and
(3) recommendations with respect to program
changes, statutory changes, and other matters to im-
prove and facilitate the operations of the demonstra-
tion programs and to encourage the use of these
programs by qualified concerns.
SEC. 106. AUTHORIZATION OF APPROPRIATIONS.
For purposes of this Act, there are authorized to be
appropriated $90,000,000 per fiscal year. Such sums shall
remain available until expended.
SEC. 107. SEPARABILITY.
If any provision of this Act, or any application of such
provision to any person or circumstance, shall be held in-
valid, the remainder of this Act, or the application of such
provision to person or circumstance other than those as
to which it is held invalid, shall not be affected thereby.
Æ