
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 15USC689c]

 
                      TITLE 15--COMMERCE AND TRADE
 
             CHAPTER 14B--SMALL BUSINESS INVESTMENT PROGRAM
 
              SUBCHAPTER III--INVESTMENT DIVISION PROGRAMS
 
               Part B--New Markets Venture Capital Program
 
Sec. 689c. Selection of New Markets Venture Capital companies


(a) Eligibility

    A company shall be eligible to apply to participate, as a New 
Markets Venture Capital company, in the program established under this 
part if--
        (1) the company is a newly formed for-profit entity or a newly 
    formed for-profit subsidiary of an existing entity;
        (2) the company has a management team with experience in 
    community development financing or relevant venture capital 
    financing; and
        (3) the company has a primary objective of economic development 
    of low-income geographic areas.

(b) Application

    To participate, as a New Markets Venture Capital company, in the 
program established under this part a company meeting the eligibility 
requirements set forth in subsection (a) of this section shall submit an 
application to the Administrator that includes--
        (1) a business plan describing how the company intends to make 
    successful developmental venture capital investments in identified 
    low-income geographic areas;
        (2) information regarding the community development finance or 
    relevant venture capital qualifications and general reputation of 
    the company's management;
        (3) a description of how the company intends to work with 
    community organizations and to seek to address the unmet capital 
    needs of the communities served;
        (4) a proposal describing how the company intends to use the 
    grant funds provided under this part to provide operational 
    assistance to smaller enterprises financed by the company, including 
    information regarding whether the company intends to use licensed 
    professionals, when necessary, on the company's staff or from an 
    outside entity;
        (5) with respect to binding commitments to be made to the 
    company under this part, an estimate of the ratio of cash to in-kind 
    contributions;
        (6) a description of the criteria to be used to evaluate whether 
    and to what extent the company meets the objectives of the program 
    established under this part;
        (7) information regarding the management and financial strength 
    of any parent firm, affiliated firm, or any other firm essential to 
    the success of the company's business plan; and
        (8) such other information as the Administrator may require.

(c) Conditional approval

                           (1) In general

        From among companies submitting applications under subsection 
    (b) of this section, the Administrator shall, in accordance with 
    this subsection, conditionally approval \1\ companies to participate 
    in the New Markets Venture Capital Program.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``approve''.
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                       (2) Selection criteria

        In selecting companies under paragraph (1), the Administrator 
    shall consider the following:
            (A) The likelihood that the company will meet the goal of 
        its business plan.
            (B) The experience and background of the company's 
        management team.
            (C) The need for developmental venture capital investments 
        in the geographic areas in which the company intends to invest.
            (D) The extent to which the company will concentrate its 
        activities on serving the geographic areas in which it intends 
        to invest.
            (E) The likelihood that the company will be able to satisfy 
        the conditions under subsection (d) of this section.
            (F) The extent to which the activities proposed by the 
        company will expand economic opportunities in the geographic 
        areas in which the company intends to invest.
            (G) The strength of the company's proposal to provide 
        operational assistance under this part as the proposal relates 
        to the ability of the applicant to meet applicable cash 
        requirements and properly utilize in-kind contributions, 
        including the use of resources for the services of licensed 
        professionals, when necessary, whether provided by persons on 
        the company's staff or by persons outside of the company.
            (H) Any other factors deemed appropriate by the 
        Administrator.

                     (3) Nationwide distribution

        The Administrator shall select companies under paragraph (1) in 
    such a way that promotes investment nationwide.

(d) Requirements to be met for final approval

    The Administrator shall grant each conditionally approved company a 
period of time, not to exceed 2 years, to satisfy the following 
requirements:

                       (1) Capital requirement

        Each conditionally approved company shall raise not less than 
    $5,000,000 of private capital or binding capital commitments from 
    one or more investors (other than agencies or departments of the 
    Federal Government) who met criteria established by the 
    Administrator.

     (2) Nonadministration resources for operational assistance

        (A) In general

            In order to provide operational assistance to smaller 
        enterprises expected to be financed by the company, each 
        conditionally approved company--
                (i) shall have binding commitments (for contribution in 
            cash or in kind)--
                    (I) from any sources other than the Small Business 
                Administration that meet criteria established by the 
                Administrator;
                    (II) payable or available over a multiyear period 
                acceptable to the Administrator (not to exceed 10 
                years); and
                    (III) in an amount not less than 30 percent of the 
                total amount of capital and commitments raised under 
                paragraph (1);

                (ii) shall have purchased an annuity--
                    (I) from an insurance company acceptable to the 
                Administrator;
                    (II) using funds (other than the funds raised under 
                paragraph (1)), from any source other than the 
                Administrator; and
                    (III) that yields cash payments over a multiyear 
                period acceptable to the Administrator (not to exceed 10 
                years) in an amount not less than 30 percent of the 
                total amount of capital and commitments raised under 
                paragraph (1); or

                (iii) shall have binding commitments (for contributions 
            in cash or in kind) of the type described in clause (i) and 
            shall have purchased an annuity of the type described in 
            clause (ii), which in the aggregate make available, over a 
            multiyear period acceptable to the Administrator (not to 
            exceed 10 years), an amount not less than 30 percent of the 
            total amount of capital and commitments raised under 
            paragraph (1).

        (B) Exception

            The Administrator may, in the discretion of the 
        Administrator and based upon a showing of special circumstances 
        and good cause, consider an applicant to have satisfied the 
        requirements of subparagraph (A) if the applicant has--
                (i) a viable plan that reasonably projects the capacity 
            of the applicant to raise the amount (in cash or in-kind) 
            required under subparagraph (A); and
                (ii) binding commitments in an amount equal to not less 
            than 20 percent of the total amount required under paragraph 
            (A).

        (C) Limitation

            In order to comply with the requirements of subparagraphs 
        (A) and (B), the total amount of a company's in-kind 
        contributions may not exceed 50 percent of the company's total 
        contributions.

(e) Final approval; designation

    The Administrator shall, with respect to each applicant 
conditionally approved to operate as a New Markets Venture Capital 
company under subsection (c) of this section, either--
        (1) grant final approval to the applicant to operate as a New 
    Markets Venture Capital company under this part and designate the 
    applicant as such a company, if the applicant--
            (A) satisfies the requirements of subsection (d) of this 
        section on or before the expiration of the time period described 
        in that subsection; and
            (B) enters into a participation agreement with the 
        Administrator; or

        (2) if the applicant fails to satisfy the requirements of 
    subsection (d) of this section on or before the expiration of the 
    time period described in that subsection, revoke the conditional 
    approval granted under that subsection.

(Pub. L. 85-699, title III, Sec. 354, as added Pub. L. 106-554, 
Sec. 1(a)(8) [Sec. 1(b)(3)], Dec. 21, 2000, 114 Stat. 2763, 2763A-655.)

                  Section Referred to in Other Sections

    This section is referred to in sections 689, 689b, 689g of this 
title.
