II
109th CONGRESS
1st Session
S. 1581
IN THE SENATE OF THE UNITED STATES
July 29, 2005
Mr. Bingaman (for himself and Mr. Bunning) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To facilitate the development of science parks, and for other purposes.
Short title
This Act may be cited as the
Science Park Administration Act of
2005
.
Development of science parks
Finding
Section 2 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3701) is amended by adding at the end the following new paragraph:
It is in the best interests of the Nation to encourage the formation of science parks to promote the clustering of innovation through high technology activities.
.
Definition
Section 4 of such Act (15 U.S.C. 3703) is amended by adding at the end the following new paragraphs:
Science park means a group of interrelated companies and institutions, including suppliers, service providers, institutions of higher education, start-up incubators, and trade associations that cooperate and compete and are located in a specific area whose administration promotes real estate development, technology transfer, and partnerships between such companies and institutions, and does not mean a business or industrial park.
Business or industrial park means primarily a for-profit real estate venture of businesses or industries which do not necessarily reinforce each other through supply chain or technology transfer mechanisms.
Science park infrastructure means facilities that support the daily economic activity of a science park.
.
Promotion of development of science parks
Section 5(c) of such Act (15 U.S.C. 3704(c)) is amended—
in paragraph (14), by striking
and
at the end;
in paragraph (15), by striking the period
at the end and inserting ; and
; and
by adding at the end the following new paragraph:
promote the formation of science parks.
.
Science parks
Such Act is further amended by adding at the end the following new section:
Science parks
Development of plans for construction of science parks
In general
The Secretary shall award grants for the development of feasibility studies and plans for the construction of new or expansion of existing science parks.
Limitation on amount of grants
The amount of a grant awarded under this subsection may not exceed $750,000.
Award
Competition required
The Secretary shall award any grant under this subsection pursuant to a full and open competition.
Advertising
The Secretary shall advertise any competition under this paragraph in the Commerce Business Daily.
Selection criteria
The Secretary shall publish the criteria to be utilized in any competition under this paragraph for the selection of recipients of grants under this subsection. Such criteria shall include requirements relating to—
the number of jobs to be created at the science park each year for a period of 5 years;
the funding to be required to construct or expand the science park over the first 5 years;
the amount and type of cost matching by the applicant;
the types of businesses and research entities expected in the science park and surrounding community;
letters of intent by businesses and research entities to locate in the science park;
the capacity of the science park for expansion over a period of 25 years;
the quality of life at the science park for employees at the science park;
the capability to attract a well trained workforce to the science park;
the management of the science park;
expected risks in the construction and operation of the science park;
risk mitigation;
transportation and logistics;
physical infrastructure, including telecommunications; and
ability to collaborate with other science parks throughout the world.
Authorization of appropriations
There is authorized to be appropriated for each of fiscal years 2006 through 2011, $7,500,000 to carry out this subsection.
Revolving loan Program for development of science park infrastructure
In general
The Secretary shall make grants to six regional centers for the development of existing science park infrastructure through the operation of revolving loan funds by such centers.
Selection of centers
In general
The Secretary shall select the regional centers to be awarded grants under this subsection utilizing such criteria as the Secretary shall prescribe.
Criteria
The criteria prescribed by the Secretary under this paragraph shall include criteria relating to revolving loan funds and revolving loan fund operators under paragraph (4), including—
the qualifications of principal officers;
non-Federal cost matching requirements; and
conditions for the termination of loan funds.
Limitation on loan amount
The amount of any loan for the development of existing science park infrastructure that is funded under this subsection may not exceed $3,000,000.
Revolving loan funds
In general
A regional center receiving a grant under this subsection shall fund the development of existing science park infrastructure through the utilization of a revolving loan fund.
Operation and integrity
The Secretary shall prescribe regulations to maintain the proper operation and financial integrity of revolving loan funds under this paragraph.
Efficient Administration
The Secretary may—
at the request of a grantee, amend and consolidate grant agreements governing revolving loan funds to provide flexibility with respect to lending areas and borrower criteria;
assign or transfer assets of a revolving loan fund to a third party for the purpose of liquidation, and a third party may retain assets of the fund to defray costs related to liquidation; and
take such actions as are appropriate to enable revolving loan fund operators to sell or securitize loans (except that the actions may not include issuance of a Federal guaranty by the Secretary).
Treatment of actions
An action taken by the Secretary under this paragraph with respect to a revolving loan fund shall not constitute a new obligation if all grant funds associated with the original grant award have been disbursed to the recipient.
Preservation of securities laws
Not treated as exempted securities
No securities issued pursuant to subparagraph (C)(iii) shall be treated as exempted securities for purposes of the Securities Act of 1933 or the Securities Exchange Act of 1934, unless exempted by rule or regulation of the Securities and Exchange Commission.
Preservation
Except as provided in clause (i), no provision of this paragraph or any regulation issued by the Secretary under this paragraph shall supersede or otherwise affect the application of the securities laws (as such term is defined in section 2(a)(47) of the Securities Exchange Act of 1934) or the rules, regulations, or orders of the Securities and Exchange Commission or a self-regulatory organization thereunder.
Authorization of appropriations
There is authorized to be appropriated for each of fiscal years 2006 through 2011, $60,000,000 to carry out this subsection.
Loan guarantees for science park infrastructure
In general
The Secretary shall guarantee up to 80 percent of the loan amount for loans exceeding $10,000,000 for projects for the construction of science park infrastructure.
Limitations on guarantee amounts
The maximum amount of loan principal guaranteed under this subsection may not exceed—
$50,000,000 with respect to any single project; and
$500,000,000 with respect to all projects.
Selection of guarantee recipients
The Secretary shall select recipients of loan guarantees under this subsection based upon the ability of the recipient to collateralize the loan amount through bonds, equity, property, and other such criteria as the Secretary shall prescribe.
Terms and conditions for loan guarantees
For purposes of this section, the loans guaranteed shall be subject to such terms and conditions as the Secretary may prescribe, except that—
the final maturity of such loans made or guaranteed shall not exceed (as determined by the Secretary) the lesser of—
30 years and 32 days, or
90 percent of the useful life of any physical asset to be financed by such loan;
no loan made or guaranteed may be subordinated to another debt contracted by the borrower or to any other claims against the borrowers in the case of default;
no loan may be guaranteed unless the Secretary determines that the lender is responsible and that adequate provision is made for servicing the loan on reasonable terms and protecting the financial interest of the United States;
no loan may be guaranteed if the income from such loan is excluded from gross income for purposes of chapter 1 of the Internal Revenue Code of 1986, or if the guarantee provides significant collateral or security, as determined by the Secretary, for other obligations the income from which is so excluded;
any guarantee shall be conclusive evidence that said guarantee has been properly obtained, that the underlying loan qualified for such guarantee, and that, but for fraud or material misrepresentation by the holder, such guarantee shall be presumed to be valid, legal, and enforceable;
the Secretary shall prescribe explicit standards for use in periodically assessing the credit risk of new and existing direct loans or guaranteed loans;
the Secretary must find that there is a reasonable assurance of repayment before extending credit assistance; and
new loan guarantees may not be committed except to the extent that appropriations of budget authority to cover their costs are made in advance, as required in section 504 of the Federal Credit Reform Act of 1990.
Payment of losses
For purposes of this section—
In general
If, as a result of a default by a borrower under a guaranteed loan, after the holder thereof has made such further collection efforts and instituted such enforcement proceedings as the Secretary may require, the Secretary determines that the holder has suffered a loss, the Secretary shall pay to such holder the percentage of such loss (not more than 80 percent) specified in the guarantee contract. Upon making any such payment, the Secretary shall be subrogated to all the rights of the recipient of the payment. The Secretary shall be entitled to recover from the borrower the amount of any payments made pursuant to any guarantee entered into under this section.
Enforcement of rights
The Attorney General shall take such action as may be appropriate to enforce any right accruing to the United States as a result of the issuance of any guarantee under this section.
Forbearance
Nothing in this section may be construed to preclude any forbearance for the benefit of the borrower which may be agreed upon by the parties to the guaranteed loan and approved by the Secretary, if budget authority for any resulting subsidy costs (as defined under the Federal Credit Reform Act of 1990) is available.
Management of property
Notwithstanding any other provision of law relating to the acquisition, handling, or disposal of property by the United States, the Secretary shall have the right in the Secretary's discretion to complete, recondition, reconstruct, renovate, repair, maintain, operate, or sell any property acquired by the Secretary pursuant to the provisions of this section.
Review
The Comptroller General of the United States shall, within 2 years of the date of enactment of this section, conduct a review of the subsidy estimates for the loan guarantees under this subsection, and shall submit to Congress a report on the review conducted under this paragraph.
Termination
No loan may be guaranteed under this subsection after September 30, 2011.
Authorization of appropriations
There is authorized to be appropriated—
such sums as may be necessary for the cost, as defined in section 502(5) of the Federal Credit Reform Act of 1990, of guaranteeing $500,000,000 of loans under this subsection, and
$6,000,000 for administrative expenses for fiscal year 2006 and such sums as necessary thereafter for administrative expenses in subsequent years.
National Academy of Sciences evaluation
In general
The Secretary shall enter into an agreement with the National Academy of Sciences under which the Academy shall evaluate, on a tri-annual basis, the activities under this section.
Tri-annual report
Under the agreement under paragraph (1), the Academy shall submit to the Secretary a report on its evaluation of science park development under that paragraph. Each report may include such recommendations as the Academy considers appropriate for additional activities to promote and facilitate the development of science parks in the United States.
Tri-Annual report
Not later than March 31 of every third year, the Secretary shall submit to Congress a report on the activities under this section during the preceding 3 years, including any recommendations made by the National Academy of Sciences under subsection (d)(2) during such period. Each report may include such recommendations for legislative or administrative action as the Secretary considers appropriate to further promote and facilitate the development of science parks in the United States.
Regulations
Regulations
Consistent with Office of Management and
Budget Circular A–129, Policies for Federal Credit Programs and Non-Tax
Receivables
, the Secretary shall prescribe regulations to carry out
this section.
Deadline
The Secretary shall prescribe such regulations not later than one year after the date of enactment of this section.
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Science park venture capital fund pilot Program
Title III of the Small Business Investment Act of 1958 (15 U.S.C. 681 et seq.) is amended by adding at the end the following:
Science park venture capital fund pilot Program
Definitions
As used in this part, the following definitions shall apply:
Business or industrial park
The term Business or industrial park means primarily a for-profit real estate venture of businesses or industries which do not necessarily reinforce each other through supply chain or technology transfer mechanisms.
Equity capital
The term equity capital means common or preferred stock or a similar instrument, including subordinated debt with equity features.
High-technology
The term high-technology means
any of the high technology industries in the North American Industrial
Classification System, as listed in table 8–25 of the National Science Board
publication entitled Science and Engineering Indicators 2004
, or
as listed in any succeeding editions of such publication.
Leverage
The term leverage includes—
debentures purchased or guaranteed by the Administrator;
participating securities purchased or guaranteed by the Administrator; and
preferred securities outstanding as of the date of enactment of this part.
Mezzanine financing
The term mezzanine financing means late-stage venture capital usually associated with the final round of financing prior to an initial public offering.
Operational assistance
The term operational assistance means management, marketing, and other technical assistance that assists high-technology start-up companies with business development.
Participation agreement
The term participation agreement means an agreement, between the Administrator and a company granted final approval by the Administrator under section 374(e), that—
details the operating plan and investment criteria of the company; and
requires the company to make investments in high-technology start-up companies within a science park.
Private capital
The term private capital—
means the total of—
the paid-in capital and paid-in surplus of a corporate science park venture capital company;
the contributed capital of the partners of a partnership science park venture capital company; or
the equity investment of the members of a limited liability company science park venture capital company; and
unfunded binding commitments from investors that meet criteria established by the Administrator to contribute capital to the science park venture capital company, except that—
unfunded commitments may be counted as private capital for purposes of approval by the Administrator of any request for leverage; and
leverage shall not be funded based on the commitments; and
does not include—
any funds borrowed by a science park venture capital company from any source;
any funds obtained through the issuance of leverage; or
any funds obtained directly or indirectly from Federal, State, or local government, except for—
funds obtained from the business revenues of any federally chartered or government-sponsored enterprise established before the date of enactment of this part;
funds invested by an employee welfare benefit plan or pension plan; and
any qualified nonprivate funds, if the investors of such funds do not directly or indirectly control the management, board of directors, general partners, or members of the science park venture capital company.
Program
The term Program means the Science Park Venture Capital Program established under section 372.
Qualified nonprivate funds
The term qualified nonprivate funds means—
any funds directly or indirectly invested in any applicant or science park venture capital company on or before the date of enactment of this part, by any Federal agency other than the Administration, under a law explicitly mandating the inclusion of those funds in the definition of the term private capital; and
any funds invested in any applicant or science park venture capital company by 1 or more entities of any State, including any guarantee extended by any such entity, in an aggregate amount not to exceed 33 percent of the private capital of the applicant or science park venture capital company.
Science park
The term science park means a group of interrelated companies and institutions, including suppliers, service providers, institutions of higher education, start-up incubators, and trade associations that cooperate and compete and are located in a specific area whose administration promotes real estate development, technology transfer, and partnerships between such companies and institutions, and does not mean a business or industrial park.
Science park venture capital
The term science park venture capital means equity capital investments in high-technology start-up businesses located in science parks to foster economic development and technological innovation.
Science park venture capital company
The term science park venture capital company means a company that—
meets the requirements under section 373;
has been granted final approval by the Administrator under section 374(e); and
has entered into a participation agreement with the Administrator.
Start-up company
The term start-up company means a company that has developed intellectual property protection of research and development, but has not reached the stage associated with equity or securitized investments typical of venture capital or mezzanine financing.
State
The term State means each of the several States of the United 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 commonwealth, territory, or possession of the United States.
Establishment
There is established a Science Park Venture Capital Program, under which the Administrator may—
enter into participation agreements with companies granted final approval under section 374(e);
guarantee the debentures issued by science park venture capital companies under section 375; and
award grants to science park venture capital companies under section 377.
Requirements for science park venture capital companies
Organization
For purposes of this part, a science park venture capital company—
shall be an incorporated body, a limited liability company, or a limited partnership organized and chartered, or otherwise existing under State law solely for the purpose of performing the functions and conducting the activities authorized by this part;
if incorporated, shall have succession for a period of not less than 30 years unless earlier dissolved by the shareholders of the company;
if a limited partnership or a limited liability company, shall have succession for a period of not less than 10 years; and
shall possess the powers reasonably necessary to perform the functions and conduct the activities.
Articles
The articles of any science park venture capital company—
shall specify in general terms—
the purposes for which the company is formed;
the name of the company;
the area or areas in which the operations of the company are to be carried out;
the place where the principal office of the company is to be located; and
the amount and classes of the shares of capital stock of the company;
may contain any other provisions consistent with this part that the science park venture capital company may determine to be appropriate to adopt for the regulation of the business of the company and the conduct of the affairs of the company; and
shall be subject to the approval of the Administrator.
Capital requirements
In general
Except as provided in paragraph (2), the private capital of each science park venture capital company shall be not less than—
$5,000,000; or
$10,000,000, with respect to each science park venture capital company authorized or seeking authority to issue participating securities to be purchased or guaranteed by the Administrator under this part.
Exception
The Secretary may, in the discretion of the Administrator, and based on a showing of special circumstances and good cause, permit the private capital of science park venture capital company described in paragraph (1)(B) to be less than $10,000,000, but not less than $5,000,000, if the Administrator determines that the action would not create or otherwise contribute to an unreasonable risk of default or loss to the Federal Government.
Adequacy
In addition to the requirements under paragraph (1), the Administrator shall—
determine whether the private capital of each science park venture capital company is adequate to ensure a reasonable prospect that the company will be operated soundly and profitably, and managed actively and prudently in accordance with the articles of the company;
determine that the science park venture capital company will be able to comply with the requirements of this part; and
ensure that the science park venture capital company is designed primarily to meet equity capital needs of the businesses in which the company invests and not to compete with traditional financing by commercial lenders of high-technology startup businesses.
Diversification of ownership
The Administrator shall ensure that the management of each science park venture capital company licensed after the date of enactment of this part is sufficiently diversified from, and unaffiliated with, the ownership of the company so as to ensure independence and objectivity in the financial management and oversight of the investments and operations of the company.
Selection of science park venture capital companies
Eligibility
A company is eligible to participate as a science park venture capital company in the Program if the company—
is a newly formed for-profit entity or a newly formed for-profit subsidiary of an existing entity;
has a management team in the science park with experience in development financing or relevant venture capital financing;
has a primary objective of economic development of the science park and its surrounding geographic area; and
promotes innovation of science and technology in the science park.
Application
Any eligible company that desires to participate as a science park venture capital company in the Program shall submit an application to the Administrator, which shall include—
a business plan describing how the company intends to make successful venture capital investments in start up companies within the science park;
a description of the qualifications and general reputation of the management of the company;
an estimate of the ratio of cash to in-kind contributions of binding commitments to be made to the company under the Program;
a description of the criteria to be used to evaluate whether, and to what extent, the company meets the objectives of the Program;
information regarding the management and financial strength of any parent firm, affiliated firm, or other firm essential to the success of the business plan of the company; and
such other information as the Administrator may require.
Status
Not later than 90 days after the initial receipt by the Administrator of an application under this section, the Administrator shall provide to the applicant a written report that describes the status of the applicants and any requirements remaining for completion of the application.
Matters considered
In reviewing and processing any application under this section, the Administrator—
shall determine if—
the applicant meets the requirements under subsection (e); and
the management of the applicant is qualified and has the knowledge, experience, and capability necessary to comply with this part;
shall take into consideration—
the need for and availability of financing for high-technology start-up companies in the science park in which the applicant is to commence business;
the general business reputation of the owners and management of the applicant; and
the probability of successful operations of the applicant, including adequate profitability and financial soundness;
shall not take into consideration any projected shortage or unavailability of grant funds or leverage; and
shall emphasize the promotion of regional science park venture capital companies to serve multiple research parks in order to avoid geographic dilution of management and capital.
Approval; license
The Administrator may approve an applicant to operate as a science park venture capital company under this part and license the applicant as a science park venture capital company, if—
the Administrator determines that the application satisfies the requirements under subsection (b);
the Administrator approves—
the area in which the science park venture capital company is to conduct its operations; and
the establishment of branch offices or agencies (if authorized by the articles); and
the applicant enters into a participation agreement with the Administrator.
Debentures
Guarantees
The Administrator may guarantee the timely payment of principal and interest, as scheduled, on debentures issued by any science park venture capital company.
Terms and conditions
The Administrator may make guarantees under this section on such terms and conditions as the Administrator determines to be appropriate, except that the term of any debenture guaranteed under this section shall not exceed 15 years.
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.
Maximum guarantee
The Administrator may—
guarantee the debentures issued by a science park venture capital company only to the extent that the total face amount of outstanding guaranteed debentures of such company does not exceed the lesser of—
300 percent of the private capital of the company, or
$100,000,000; and
provide for the use of discounted debentures.
Issuance and guarantee of trust certificates
Issuance
The Administrator may issue trust certificates representing ownership of all or a part of debentures issued by a science park venture capital 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 composed solely of guaranteed debentures.
Guarantee
In general
The Administrator may, under such terms and conditions as it deems appropriate, guarantee the timely payment of the principal of and interest on trust certificates issued by the Administrator or its agents for purposes of this section.
Limitation
Each guarantee under this subsection shall be limited to the extent of principal and interest on the guaranteed debentures that compose the trust or pool.
Prepayment or default
In general
In the event that a debenture in a trust or pool is prepaid, or in the event of default of such a debenture, the guarantee 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
Interest on prepaid or defaulted debentures shall accrue and be guaranteed by the Administrator only through the date of payment of the guarantee.
Redemption
At any time during its term, a trust certificate may be called for redemption due to prepayment or default of all debentures.
Full faith and credit
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.
Subrogation and ownership rights
Subrogation
If the Administrator pays a claim under a guarantee issued under this section, it shall be subrogated fully to the rights satisfied by such payment.
Ownership rights
No provision of Federal, State, or local law shall preclude or limit the exercise by the Administrator of its ownership rights in the debentures residing in a trust or pool against which 1 or more trust certificates are issued under this section.
Management and Administration
Registration
The Administrator may provide for a central registration of all trust certificates issued under this section.
Contracting of functions
In general
Notwithstanding any other provision of law, 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—
maintenance, on behalf of and under the direction of the Administrator, of such commercial bank accounts or investments in obligations of the United States as may be necessary to facilitate the creation of trusts or pools backed by debentures guaranteed under this part; and
the issuance of trust certificates to facilitate the creation of such trusts or pools.
Fidelity bond or insurance requirement
Any agent performing functions on behalf of the Administrator under this paragraph shall provide a fidelity bond or insurance in such amounts as the Administrator determines necessary to fully protect the interests of the United States.
Regulation of brokers and dealers
The Administrator may regulate brokers and dealers in trust certificates issued under this section.
Electronic registration
Nothing in this subsection may be construed to prohibit the use of a book entry or other electronic form of registration for trust certificates issued under this section.
Operational assistance grants
In general
Grants authorized
The Administrator may award grants to science park venture capital companies and other entities to provide operational assistance to high-technology start-up companies financed, or expected to be financed, by such companies.
Terms
Grants under this subsection shall be made over a period not to exceed 10 years, under such other terms as the Administrator may require.
Grant amount
Each grant awarded under this subsection shall be equal to the lesser of—
10 percent of the private capital raised by the science park venture capital company; or
$1,000,000.
Other entities
The amount of a grant made under this subsection to any entity other than a science park venture capital company shall be equal to the resources (in cash or in kind) raised by the entity in accordance with the requirements applicable to science park venture capital companies under this part.
Supplemental grants
In general
The Administrator may award supplemental grants to science park venture capital companies and other entities, under such terms as the Administrator may require, to provide additional operational assistance to start-up companies financed, or expected to be financed, by such companies or entities.
Matching requirement
The Administrator may require, as a condition of any supplemental grant made under this subsection, that the company or entity receiving the grant provide a matching contribution equal to 50 percent of the amount of the supplemental grant from non-Federal cash or in-kind resources.
Limitation
None of the assistance made available under this section may be used for any overhead or general and administrative expense of a science park venture capital company or other entity.
Reporting requirements
Science park venture capital companies
Each science park venture capital company shall provide the Administrator with such information as the Administrator may require, including information relating to the criteria described in section 374(b)(4).
Public reports
In general
The Administrator shall prepare and make available to the public an annual report on the Program, which shall include detailed information on—
the number of science park venture capital companies licensed by the Administrator during the previous fiscal year;
the aggregate amount of leverage that science park venture capital companies have received from the Federal Government during the previous fiscal year;
the aggregate number of each type of leveraged instruments used by science park venture capital companies during the previous fiscal year, and how each such number compares to the number in previous fiscal years;
for the previous fiscal year, the number of—
science park venture capital company licenses surrendered; and
the number of science park venture capital companies placed in liquidation;
the amount and type of leverage each such company has received from the Federal Government;
the amount of losses sustained by the Federal Government as a result of operations under this part during the previous fiscal year and an estimate of the total losses that the Federal Government can reasonably expect to incur as a result of the operations during the current fiscal year;
actions taken by the Administrator to maximize recoupment of funds of the Federal Government expended to implement and administer the Program during the previous fiscal year and to ensure compliance with the requirements of this part, including implementing regulations;
the amount of Federal Government leverage that each licensee received in the previous fiscal year and the types of leverage instruments used by each licensee;
for each type of financing instrument, the sizes, types of geographic locations, and other characteristics of the small business investment companies using the instrument during the previous fiscal year, including the extent to which the investment companies have used the leverage from each instrument to make loans or equity investments in science parks; and
the actions of the Administrator to carry out this part.
Prohibition
In compiling the report required under paragraph (1), the Administrator may not—
compile the report in a manner that permits identification of any particular type of investment by an individual science park venture capital company in which a science park venture capital company invests; or
release any information that is prohibited under section 1905 of title 18, United States Code.
Examinations
In general
Each science park venture capital company that participates in the Program shall be subject to examinations made at the direction of the Administrator, in accordance with this section.
Assistance of private sector entities
An examination under this section may be conducted with the assistance of a private sector entity that has the qualifications and expertise necessary to conduct such an examination.
Costs
In general
The Administrator may assess the cost of an examination under this section, including compensation of the examiners, against the science park venture capital company examined.
Payment
Any science park venture capital company against which the Administrator assesses costs under this subsection shall pay the costs assessed.
Deposit of funds
Funds collected under this section—
shall be deposited in the account that incurred the costs for carrying out this section;
shall be made available to the Administrator to carry out this section, without further appropriation; and
shall remain available until expended.
Bank participation
In general
Except as provided under subsection (b), any national bank, any member bank of the Federal Reserve System, and, to the extent permitted under applicable State law, any insured bank that is not a member of such system, may invest in—
any science park venture capital company; or
any entity established to invest solely in science park venture capital companies.
Limitation
No bank described in subsection (a) may make investments described in that subsection that are greater than 5 percent of the capital and surplus of the bank.
Fees
In general
Except as provided under subsection (b), the Administrator may charge such fees as it determines to be appropriate with respect to any guarantee or grant issued under this part.
Exception
The Administrator shall not collect a fee for any guarantee of a trust certificate under this section. Any agent of the Administrator may collect a fee, upon the approval of the Administrator, for the functions described in section 376(e)(2).
Applicable law
In general
The provisions relating to New Market Venture Capital companies under sections 361 through section 366 shall apply to science park venture capital companies.
Purchase of guaranteed obligations
Section 318 shall not apply to any debenture issued by a science park venture capital company under this part.
Regulations
Not later than 12 months after the date of enactment of this part, the Administrator shall issue such regulations as it determines necessary to carry out this part.
Authorizations of appropriations
In general
There are authorized to be appropriated to the Administration for each of the fiscal years 2006 through 2011, to remain available until expended—
such sums as may be necessary for the cost, as defined in section 502(5) of the Federal Credit Reform Act of 1990, of guaranteeing $500,000,000 of debentures under this part; and
$50,000,000 to make grants under this part.
Funds collected for examinations
Funds deposited pursuant to section 362(d) may only be used for—
examinations under section 362; and
other oversight activities of the Program.
.
Tax incentives for investment in science parks
Expensing
In general
Section 179(d) of the Internal Revenue Code of 1986 (relating to definitions and special rules) is amended by adding at the end the following new paragraph:
Application of section to property placed in service in science parks
In general
In the case of any section 179 property placed in service in any science park, this section shall be applied without regard to paragraphs (1) and (2) of subsection (b).
Science park
In general
The term science park means a group of interrelated companies and institutions, including suppliers, service providers, institutions of higher education, start-up incubators, and trade associations that cooperate and compete and are located in a specific area whose administration promotes real estate development, technology transfer, and partnerships between such companies and institutions, and does not mean a business or industrial park.
Business or industrial park
The term business or industrial park means primarily a for-profit real estate venture of businesses or industries which do not necessarily reinforce each other through supply chain or technology transfer mechanisms.
.
Effective date
The amendment made by this subsection shall apply with respect to property placed in service after the date of the enactment of this Act.
Tax credit for research activities
In general
Section 41(a) of the
Internal Revenue Code of 1986 (relating to credit for increasing research
activities) is amended by striking and
at the end of paragraph
(1)(B), by striking the period at the end of paragraph (2) and inserting
, and
, and by adding at the end the following new
paragraph:
20 percent of the qualified research expenses paid or incurred by the taxpayer during the taxable year in carrying on any trade or business located in a science park.
.
Science park
Section 41(f) of such Code (relating to special rules) is amended by adding at the end the following new paragraph:
Science park
In general
The term science park means a group of interrelated companies and institutions, including suppliers, service providers, institutions of higher education, start-up incubators, and trade associations that cooperate and compete and are located in a specific area whose administration promotes real estate development, technology transfer, and partnerships between such companies and institutions, and does not mean a business or industrial park.
Business or industrial park
The term business or industrial park means primarily a for-profit real estate venture of businesses or industries which do not necessarily reinforce each other through supply chain or technology transfer mechanisms.
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Effective date
The amendments made by this subsection shall apply to taxable years beginning after the date of the enactment of this Act.
Private business use of a bond-Financed facility does not include performance of research using Federal Government funding in such facility
In general
Subparagraph (A) of
section 141(b)(6) of the Internal Revenue Code of 1986 (defining private
business use) is amended by inserting or use in the performance of
research using, in whole or in part, funds of the United States or any agency
or instrumentality thereof
before shall not be taken into
account
.
Effective date
In general
The amendment made by this subsection shall apply to any use on or after the date of the enactment of this Act.
No inference
Nothing in the amendment made by this subsection shall be construed to create any inference with respect to the use of tax-exempt bond financed facilities before the effective date of such amendment.