Summary: H.R.4530 — 106th Congress (1999-2000)All Information (Except Text)

There is one summary for H.R.4530. Bill summaries are authored by CRS.

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Introduced in House (05/24/2000)

New Markets Venture Capital Program Act of 2000 - Amends the Small Business Investment Act of 1958 to direct the Small Business Administration (SBA) to establish a New Markets Venture Capital Program, under which the SBA may: (1) enter into participation agreements with approved new market venture capital companies (companies) for the making of developmental venture capital investments in smaller enterprises in low or moderate income geographic areas; (2) guarantee debentures issued by companies; and (3) make operational assistance grants to such companies. Makes eligible as a participating company in the Program one which: (1) is a newly formed for-profit entity or newly formed for-profit subsidiary of an existing company; (2) has a management team with experience in community development financing or relevant venture capital financing; and (3) has a primary objective of economic development of low or moderate income geographic areas. Outlines application requirements and SBA selection criteria, requiring the SBA to ensure that companies are chosen so that investments under the Program will be made nationwide. Outlines conditions to be met by each company before final approval, including: (1) a capital investment requirement of at least $5 million from investors who meet SBA-established criteria; and (2) binding commitments with non-SBA sources for Program operational assistance.

Authorizes the SBA to: (1) guarantee the timely payment of principal and interest on debentures issued by companies, not to exceed 150 percent of the company capital; (2) issue trust certificates representing ownership of all or a fractional part of SBA-guaranteed debentures; (3) make grants to companies and to other entities such as specialized small business investment companies to provide operational assistance for the benefit of smaller enterprises financed by such companies or other entities; and (4) charge fees with respect to any guarantee or grant issued.

Authorizes any national bank, member bank of the Federal Reserve System, and any other insured bank to invest in any company or in any entity established to invest solely in such companies. Limits such investment to five percent of such bank's capital and surplus.

Requires each company to provide the SBA with any required information.

Subjects each company to examinations made at the direction of the Investment Division of the SBA.

Authorizes the SBA to obtain injunctions and other relief against companies violating requirements of this Act, which shall include: (1) voiding an operative participation agreement; and (2) a finding of breach of fiduciary duty in unlawful acts and omissions by company officers, directors, employees, or agents.

Authorizes appropriations for FY 2000 through 2005 to carry out this Act.

(Sec. 4) Revises provisions concerning the determination of the maximum amount of outstanding leverage made available to a company after March 31, 1993, for purposes of the Small Business Investment Act of 1958 to direct the SBA Administrator, in calculating such amount, to exclude any equity investment made by a company in a smaller enterprise located in a low or moderate income geographic area, to the extent that such amount does not exceed 50 percent of the company's private capital.

(Sec. 5) Exempts a company from debtor status under Federal bankruptcy law.

(Sec. 6) Amends the Home Owners' Loan Act to authorize a Federal savings association to invest in company securities, with an investment limit of five percent of the association's capital and surplus.