SUMMARY

National Innovation Funds Act of 2011 – Establishes a Corporation for National Innovation and a National Innovation Bond
program to provide incentives to small, fixed life-cycle venture capital funds for the purpose of acting as investment
intermediaries between the Federal Government and companies that pursue technological innovations deemed by Congress and
the President to be key national priorities, i.e. alternative power or fuel sources.

The three forms of incentive created by this Act, investment of Federal funds, exclusive rights to market a subsidized financial
instrument, and access to Federal publicity support, shall greatly increase investment in innovative companies pursuing research,
development and implementation that might otherwise fail to attract investment, thereby adding greater dynamism to the
American economy.

The national technological priorities set by Congress and the President shall have direct commercial application. The enactment
of such limitations is intended, in part, to fill the gaps in ARPA (later DARPA) created by the restriction of research and
development to only those projects which have a direct military application.

The Role of Venture Capital (VC) Funds:

VC funds selected to receive funds will be responsible for soliciting applications from potential start-up companies and
determining which companies have the greatest potential for success. The Corporation will provide assistance and advisement
as required, as well as promotion aimed at encouraging small companies conducting research and development on priority
technologies to apply for funding.

VC funds selected to receive funding under this Act shall be small. Research shows that larger VC Funds tend to over-capitalize
early stage companies and one of the purposes of this Act is to increase competitiveness and diversity in the American economy.

VC funds shall be required to match federal funds, whether through independent fundraising or through the sale of National
Innovation Bonds, however they shall not solicit or accept such funds from second or third party investment firms, or any
monies originating therein, in order to prevent such large firms from creating ‘dummy funds’ intended to compete for funding
under this Act. Rules established herein are not however intended, and could not legally, bar such large firms from investing
alongside selected VC funds. Large firms and the general public are encouraged to invest in these companies by purchasing
American Innovation Bonds as established by this Act, which includes provisions for other rigorous oversight mechanisms:

• The Securities and Exchange Commission shall have an unprecedented level of input in the activities of the
Corporation, whose chairman shall exercise a veto over decisions made by the Corporation if such decisions or
activities are deemed to violate SEC regulations, and shall appoint members to the Inspector General Oversight
Committee of the Corporation.

• The Corporation shall make frequent reports to Congress on the nature of its investment activities.

• Recipient Financial Institutions are required to provide 50 percent matching funds, and of those funds which are
leveraged for this purpose, a 20 percent cash balance must be maintained and held in escrow by the U.S. Treasury.

Building on Existing Paradigms:

While this Act is modeled in part on the Corporation for National Service established by the National Service Trust Act of 1993,
the Build America Bonds program established by the American Recovery and Reinvestment Act of 2009, and Ohio’s Third
Frontier Program, the National Innovation Funds Act of 2011 is designed to address several flaws:

• These programs must evaluate potential grant recipients, thereby creating the need for a large number of government
employees and greater use of resources for administrative purposes.

• This Act seeks to limit the organizational profile necessary to achieve its stated goals by creating separation between
potential innovators and government sponsorship via investment intermediaries. By transferring the responsibility for
identifying, mentoring, and partially funding companies to small investment firms, this program will lower costs and
maximize benefits for the American economy.

• While Build America Bonds expose the Federal Government to high levels of debt liability, the National Innovation
Bond program seeks to limit risk exposure by constraining subsidies for interest payments to tax credits instead of
direct payments. The provisions of this Act also stipulate that such tax credits shall first be applied to the tax liability of
the bonds themselves, further limiting Federal liability as such tax revenue would not exist without these bonds.


National Innovation Funds Act of 2011 (Introduced in House)
HR ****

112th CONGRESS
1st Session

H. R. ****

To establish a Corporation for National Innovation that shall be a Government Corporation as defined in section 103 of title 5,
USC, to administer the programs established under this Act, and to establish a National Innovation Bond program to partially
fund such programs.

IN THE HOUSE OF REPRESENTATIVES

January 3, 2011

Ms. SAUJANI shall introduce the following bill; which shall be referred to the Committee on Small Business, and in addition to
the Committee on Science and Technology, for a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the committee concerned.

A BILL

To establish a Corporation for National Innovation that shall be a Government Corporation as defined in section 103 of title 5,
USC, to administer the programs established under this Act, and to establish a National Innovation Bond program to partially
fund such programs.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SEC. 1. SHORT TITLE.

This Act may be cited as the `National Innovation Funds Act of 2011'.

SEC. 2. FINDINGS AND PURPOSE.

(a) FINDINGS— THE CONGRESS FINDS—

(1) America is no longer the global leader in technological innovation and lags in several key areas such as
Internet connectivity and development and implementation of alternative power and fuel sources, as well as
other environmentally sustainable initiatives.

(2) Promoting technological innovation will foster much needed diversification in the economy, create millions
of jobs, and ensure that America will remain a dynamic, competitive force in an increasingly global economy.

(3) Technological innovation requires large, long-term investment.

(4) The current financial system lacks incentive to provide funding for technological innovation and current
public investment strategies are insufficient.

(b) PURPOSE— IT IS THE PURPOSE OF THE ACT TO—

(1) Provide inventive and ability to small venture capital firms to lend monies and provide other support to
American innovators and entrepreneurs who have promising ideas but lack the funding and support necessary
to realize them.

(2) Increase the competitiveness of the American economy.

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 (3) Diversify the American economy so as to lessen dependence on the financial sector and other industries the
nation relies on for economic growth.

(4) Foster development of ‘green technologies’ that will create new economic sectors and thousands of new
jobs.

(5) Provide individual States with opportunities to invest in American innovation by matching investments for
recipients of funding, and create incentives for States to provide incubation hubs for innovation that will not
only fuel entrepreneurship and market growth, but will also foster industry innovation clusters.

(6) Provide a new opportunity for all Americans to invest in and profit from the future success of American
innovation through purchase of National Innovation Bonds.

(7) Build on the existing organizational small business support infrastructure of Federal, State, and local
programs and agencies to expand opportunities for all citizens to turn innovative ideas into successful
businesses.

TITLE I: PROGRAMS AND RELATED PROVISIONS

SEC. 3. FEDERAL INVESTMENT IN SUPPORT OF NATIONAL INNOVATION.

(a) PROVISION OF ASSISTANCE- The Corporation for National Innovation (hereafter referred to as “the
Corporation”) shall distribute funds to eligible Financial Institutions as defined by section 4 of this title to—

(1) invest in Companies that fulfill the requirements established in section 5 of this title; and

(2) sell National Innovation Bonds as established in section 12 and facilitate and encourage the sale of such
instruments by Financial Institutions for the sole purpose of raising required matching funds pursuant to
subsection (e).

(b) AGREEMENTS WITH FEDERAL AGENCIES- The Corporation may enter into a contract or cooperative
agreement with another Federal agency to support a national innovation program carried out by that agency. The
support provided by the Corporation pursuant to the contract or cooperative agreement may not include the transfer
to the Federal agency of funds available to the Corporation under this Act.

(c) RULES ON USE- The Corporation may by rule prescribe the manner and extent to which—

(1) funds provided to Companies by Financial Institutions pursuant to section 4(a) of this title may be used
for advertisement; and

(2) that portion of the assistance available to cover administrative costs should be distributed between—

(A) the original recipient Financial Institution of the funds authorized under section 11; and

(B) the Companies receiving funds from such Financial Institutions.

(d) MATCHING FUNDS REQUIREMENTS-

(1) REQUIREMENTS- Financial Institutions must match Federal funds provided for investment at a rate of
no less than 50 percent.

(2) CALCULATION- In providing for matching funds the recipient Financial Institution—

(A) shall provide for such share through a payment in cash or in kind, fairly evaluated, including
facilities, equipment, or services, however payment in kind shall not exceed 15 percent of the
matching funds required under this subsection;

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 (B) may provide for such share through State sources, local sources, or other Federal sources
except where prohibited by law;

(C) may provide for such share through the sale of National Innovation Bonds; and

(D) may not provide for such share through funding provided by second or third party financial
institution or any monies originating therein.

(3) DEBT LIMITS- In addition to its responsibility to raise matching funds, the recipient Financial
Institution—

(A) must maintain a twenty percent cash balance for all leveraged funding used to fulfill the fifty
percent matching funds requirement;

(B) submit such monies to be held in escrow by the United States Treasury; and

(C) must maintain a twenty percent balance for all leveraged funds exceeding those used to fulfill
the matching funds requirement in cash, equity, or other verifiable assets.

SEC. 4. COMPANIES AND FINANCIAL INSTITUTIONS ELIGIBLE FOR

FUNDING.

(a) ELIGIBLE FINANCIAL INSTITUTIONS- The recipient of funding shall use such funds to directly invest in the
type of Companies determined by the Corporation Investment Council to have the potential to contribute innovative
solutions to technological shortfalls subject to subsection (b)(1) and according to criteria established in subsection
(e). The Corporation shall authorize the distribution of funds based on the discretion of the Investment Council as set
forth in subsection (d) and only to those financial institutions that meet the following criteria:

(1) ORGANIZATIONAL REQUIREMENTS— THE RECIPIENT MUST BE AN ENTITY THAT—

(A) operates or is willing and able to operate a fixed life-cycle venture capital fund registered
under the Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.);

(B) is an investment company, as defined in subsection (a)(1) of section 3 of such Act (15 U.S.C.
80a-3);

(C) is organized or incorporated, and domiciled, in the United States, and the majority ownership
of which is composed of United States citizens or aliens lawfully admitted to the United States for
permanent residence;

(D) possesses the capacity to provide companies with active, hands-on assistance in all phases of
expansion, including marketing, finance, and management development as determined by the
Corporation according to criteria set forth in subsection (d);

(E) adhere to nondiscrimination policies as required by law and subsection (d)(3); and

(F) submit to an independent financial audit at intervals determined by the Corporation.

(2) LIMITATIONS—

(A) A recipient Financial Institution shall not be a publicly traded company or a subsidiary in
whole or in part of a publicly traded company.

(B) Recipient Financial Institutions must not hold at the time of application, or at any time prior,
funds in excess of an amount that would place them higher than the lowest quartile of all Financial
Institutions which operate or have operated a fixed life-cycle venture capital fund, in terms of
overall value and average deal value, when duly evaluated by the Corporation, whether as a
Limited Partnership, Limited Liability Company, or any other form of legal partnership.

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 (C) Recipient Financial Institutions must be exempt from registration under subsection (c)(1) or
(c)(7) of section 3 of Investment Company Act of 1940 (15 U.S.C. 80a-3), and is not registered as
such.

(b) QUALIFICATION CRITERIA TO DETERMINE ELIGIBILITY-

(1) ESTABLISHMENT BY CORPORATION- Based on national priorities established under subsection

(c) the Corporation shall establish criteria for different types of technological needs for the purpose of
determining whether a particular Financial Institution be considered eligible to receive funds under this
Act.

(2) CONSULTATION- In establishing qualification criteria under paragraph (1), the Corporation shall
consult with—

(A) organizations and individuals with extensive experience in financial investment in high tech
industries.

(B) organizations and individuals with expert knowledge of the technology or science identified in
paragraph (1).

(3) APPLICATION TO INVESTMENTS- The qualification criteria established by paragraph (1) shall also
be used by each Financial Institution in receipt of funds when determining which Companies are eligible
for investment.

(c) TECHNOLOGICAL PRIORITIES—

(1) ESTABLISHMENT BY CORPORATION- In order to concentrate national efforts on meeting certain

unmet technological needs and to achieve the other purposes of this Act, the Corporation shall establish,
and periodically alter, priorities regarding the types of technology companies eligible for receipt of funds
under this subsection and the purposes for which such assistance may be used.

(A) The Corporation will adhere to priorities set forth by Congress or the President; and

(B) in the absence of such guidance, will establish priorities with consultation set forth in
subsection (a)(2).

(2) LIMITATIONS- Neither Congress nor the President shall set forth priorities that do have commercial
application, however—

(A) such limitations shall not be construed as to contradict section 3(b); and

(2) NOTICE TO APPLICANTS- The Corporation shall provide advance notice to potential applicants of
any national technological priorities to be in effect under this subsection for a fiscal year. The notice shall
specifically include—

(A) a description of any alteration made in the priorities since the previous notice;

(B) a description of the national technological priorities that are designated by the Corporation
under subsection (c) as eligible for priority consideration in the next competitive selection of
Financial Institutions pursuant to this section; and

(C) guidelines for investment in Companies as established in subsection (e).

(d) PROCESS OF SELECTION-

(1) REQUESTS FOR PROPOSALS- Pursuant to subsection (c) the Corporation shall solicit proposals from
Financial Institutions meeting the requirements set forth in this section. In addition to the information
required by section 4(c)(2) requests for proposals shall include—

(A) a deadline for submission not to exceed a period of 6 months from time of issuance;

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 (B) information regarding the eligibility requirements set forth in this section;

(C) the stage of development a company must be in to receive funds; and

(D) any other information as deemed appropriate by the Investment Council.

(2) EVALUATION- The Corporation must render selection decisions, drawing only from the pool of
submitted proposals, within 2 months from the passage of the submission deadline.

(A) The Corporation may choose to reissue a request for proposals if the Corporation judges that
such action is warranted by a lack of acceptable proposals.

(3) NONDESCRIMINATION—

(A) BASIS- In rendering decisions on applications and in general The Corporation shall not
discriminate against an applicant for funds or an applicant for employment with the Corporation
on the basis of race, color, national origin, sex, age, or political affiliation, or on the basis of
disability, if the applicant is a qualified individual with a disability.

(B) DEFINITION- As used in subparagraph (A), the term ‘qualified individual with a disability’
has the meaning given the term in section 101(8) of the Americans with Disabilities Act of 1990
(42 U.S.C. 12111(8)).

(e) ELIGIBLE COMPANIES- Recipient Financial Institutions shall only invest such funds received from the
Corporation in Companies that meet the following criteria—

(1) Recipient Financial Institutions shall not invest such funds in a publicly traded Company or a
subsidiary in whole or in part of a publicly traded company.

(2) Recipient Financial Institutions shall invest such funds in early, mid, or late stage development
companies as directed by the Corporation and only those Companies in such stages of
development will be eligible during any given cycle of requests for proposals to receive such
funds.

(3) Recipient Financial Institutions shall not invest such funds in a Company that is not registered
in the United States of America.

TITLE II: ORGANIZATION

SEC. 5. CORPORATION FOR NATIONAL INNOVATION.

There is established a Corporation for National Service that shall administer the programs established under Title I of
this Act. The Corporation shall be a Government Corporation, as defined in section 103 of title 5, USC.

SEC. 6. INVESTMENT COUNCIL.

(a) COMPOSITION-

(1) IN GENERAL- There shall be in the Corporation an Investment Council (hereafter referred to as “the
Council”) that shall be composed of—

(A) 15 members, including the Chairperson appointed under section 2(A), to be appointed by the
President by and with the advice and consent of the Senate; and

(B) the ex-officio members described in paragraph (3).

(2) QUALIFICATIONS- To the maximum extent practicable, the President shall appoint members—

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 (A) who are experts in financial investment strategies;

(B) who have extensive experience providing technology companies with capital, resources and
mentorship;

(C) who have experience in a broad range of high-tech industries; so that

(D) the Council shall consist of experts from academia, the private sector, and government.

(3) EX OFFICIO MEMBERS- The Secretary of the Treasury, the Chairman of the Federal Reserve, the
Chairman of the Federal Trade Commission, the Secretary of the Department of Energy, the Secretary of
Agriculture, the Director of the National Science Foundation, the Administrator of the National Oceanic and
Atmospheric Administration, the Chairman of the Federal Communications Commission, the Administrator of
the Environmental Protection Agency, and the White House Chief Technology Officer shall serve as ex-officio
non-voting members of the Council.

(A) The Chairman of the United States Securities and Exchange Commission shall serve as an ex-
officio member of the Council and shall wield the power to veto decisions made by the Council if the
Chairman determines such decisions violate Public Law 107-204 or any other Federal or State statute.

(b) TERMS- Each appointed member of the Council shall serve for a term of 5 years, except that, as designated by
the President—

(1) 3 of the members first appointed to the Board shall serve for a term of 1 year;

(2) 3 of the members first appointed to the Board shall serve for a term of 2 years;

(3) 3 of the members first appointed to the Board shall serve for a term of 3 years;

(4) 3 of the members first appointed to the Board shall serve for a term of 4 years; and

(5) 3 of the members first appointed to the Board shall serve for a term of 5 years;

(c) VACANCIES- As vacancies occur on the Council, new members shall be appointed by the President, by and
with the advice and consent of the Senate, and serve for a term of 5 years or the remainder of the term for which the
predecessor of such member was appointed. The vacancy shall not affect the power of the remaining members to
execute the duties of the Council.

SEC. 7. AUTHORITIES AND DUTIES OF THE COUNCIL OF INVESTORS.

(a) MEETINGS- The Council shall meet not less than once each month. The Council shall hold additional meetings
at the call of the Chairperson or if a majority of the members of the Council request such meetings in writing. In
addition, the Council (or designated members of the Council) shall conduct periodic public hearings throughout the
United States to examine and review operation of the Corporation.

(b) QUORUM- A majority of the appointed members of the Council shall constitute a quorum.

(c) OFFICERS—

(1) VICE CHAIRPERSON- The Council shall elect a Vice Chairperson from among its membership. The
Vice Chairperson may conduct meetings of the Council in the absence of the Chairperson.

(2) OTHER OFFICERS- The Council may elect from among its membership such additional officers of the
Board as the Board determines to be appropriate.

(d) INSPECTOR GENERAL OVERSIGHT COMMITTEE- The Council shall establish an Inspector General
oversight committee (hereafter referred to as the “Oversight Committee”). Such Oversight Committee shall be

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 comprised of the Vice Chairperson and two members selected by the Chairman of the United States Securities and
Exchange Commission.

(1) DUTIES – THE OVERSIGHT COMMITTEE SHALL—

(A) provide detailed quarterly reports on the activities of the Council and the disbursement of
monies, to the Chairman of the United States Securities and Exchange Commission and any
additional officials designated by the Chairman of the United States Securities and Exchange
Commission;

(B) carry out other evaluations of the activities of the Council as determined to be appropriate by
the Chairman of the United States Securities and Exchange Commission or the President of the
United States;

(C) make recommendations with respect to the compliance with regulations established under
section 3(c) and 4(d)(3); and

(D) inform the Chairperson of any aspects of the actions of the Corporation that are not in
compliance with the annual strategic plan described in subsection (g)(1), the recommendations
described in subparagraph (C), or are not consistent with the objectives of this Act;

(e) SPECIAL GOVERNMENT EMPLOYEES- Members of the Council (to whom such provisions would not
otherwise apply except for this subsection) shall be special Government employees as under section 202 of title 8,
USC.

(f) STATUS OF MEMBERS—

(1) OTHER CLAIMS- A member of the Council has no personal liability under Federal law with respect to
any claim arising out of or resulting from any act or omission by such person, within the scope of the
service of the member on the Council, in connection with any transaction involving the provision of
financial assistance by the Corporation. This paragraph shall not be construed to limit personal liability for
criminal acts or omissions, willful or malicious misconduct, acts or omissions for private gain, or any other
act or omission outside the scope of the service of such member on the Council.

(2) EFFECT ON OTHER LAW— THIS SUBSECTION SHALL NOT BE CONSTRUED—

(A) to affect any other immunities and protections that may be available to such member under
applicable law with respect to such transactions;

(B) to affect any other right or remedy against the Corporation, against the United States under
applicable law, or against any person other than a member of the Council participating in such
transactions; or

(C) to limit or alter in any way the immunities that are available under applicable law for Federal
officials and employees not described in this subsection.

(g) DUTIES— THE COUNCIL SHALL—

(1) Solicit requests for proposals from Financial Institutions based on the technological priorities set forth
in section 4(c);

(2) By process of a majority vote and processes of consultation pursuant to section 4(b)(2), select Financial
Institutions from those having submitted proposals to receive funds based on the guidelines established in
section 4;

(3) PREPARE AND SUBMIT TO CONGRESS—

(A) a strategic plan every year, and quarterly updates of the plan, for the Corporation with respect
to the grants, allotments, contracts, assistance, and payments made by the Corporation and

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 financial institutions selected to receive funds, and with respect to such standards, policies,
procedures, programs, and initiatives as are necessary or appropriate to carry out this Act;

(B) an annual report with respect to the manner in which the Corporation used or distributed such
services, money, and property at its disposal;

(4) receive reports issued by the Oversight Committee and review actions taken by the Chairperson with
respect to such reports;

(5) make recommendations for research with respect to national technological priorities pursuant to section
4(c);

(6) advise the President and the Congress concerning advances in technological innovation that merit their
attention;

(7) disseminate information regarding the programs and initiatives of the Corporation and the Financial
Institutions selected to receive funds as well as the technological priorities set forth in section 4)(c); and

(8) carry out any other activities determined to be appropriate by the Chairperson in order to implement this
Act.

SEC. 8. CHAIRPERSON AND DIRECTOR.

(a) APPOINTMENT- The Corporation shall be headed by an individual who shall serve as Chairperson of the
Council and as Director of the Corporation, and who shall be appointed by the President, by and with the advice and
consent of the Senate.

(b) COMPENSATION- The Chairperson shall be compensated at the rate provided for level III of the Executive
Schedule under section 5314 of title 5, United States Code.

(c) REGULATIONS- The Chairperson shall prescribe such rules and regulations as are necessary or appropriate to
carry out this Act.

SEC. 9. AUTHORITIES AND DUTIES OF THE CHAIRPERSON.

(a) GENERAL POWERS AND DUTIES- The Chairperson shall be responsible for the exercise of the powers and
the discharge of the duties of the Corporation that are not reserved to the Council, and shall have authority and
control over all personnel of the Corporation.

(b) DUTIES- In addition to the duties conferred on the Chairperson under any other provision of this Act, the
Chairperson shall—

(1) submit proposals to the Council regarding, such standards, policies, and procedures, as are necessary or
appropriate to carry out this Act;

(2) establish and administer such programs and initiatives as the Chairperson, acting on the
recommendation of the Council, may determine to be necessary or appropriate to carry out this Act;

(3) consult with appropriate Federal agencies in administering such programs and initiatives;

(4) on the recommendation of the Council or the direction of the Chairman of the Federal Reserve, suspend
or terminate payments to recipient Financial Institutions, in accordance with section 6(a)(3)(A); and

(5) prepare and submit to the appropriate committees of Congress an annual report, and such interim
reports as required by section 7(g)(3).

(c) POWERS- In addition to the authority conferred on the Chairperson under any other provision of this Act, the
Chairperson may—

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 (1) establish, alter, consolidate, or discontinue such organizational units or components within the
Corporation as the Chairperson considers necessary or appropriate;

(2) with their consent, utilize the services and facilities of Federal agencies without reimbursement, and,
with the consent of any State, or political subdivision of a State, accept and utilize the services and facilities
of the agencies of such State or subdivisions without reimbursement;

(3) disseminate, without regard to the provisions of section 3204 of title 39, United States Code, data and
information, in such form as the Chairperson shall determine to be appropriate to public agencies, private
organizations, and the general public;

(4) collect or compromise all obligations to or held by the Chairperson and all legal or equitable rights
accruing to the Chairperson in connection with the payment of obligations in accordance with chapter 37 of
title 31, United States Code (commonly known as the `Federal Claims Collection Act of 1966');

(5) file a civil action in any court of record of a State having general jurisdiction or in any district court of
the United States, with respect to a claim arising under this Act on behalf of the Corporation;

(6) exercise the authorities of the Corporation under section 7; and

(7) generally perform such functions and take such steps consistent with the objectives and provisions of
this Act, as the Chairperson determines to be necessary or appropriate to carry out such provisions.

SEC. 10. OFFICERS.

(a) MANAGING DIRECTORS—

(1) IN GENERAL- There shall be in Council 2 Managing Directors, who shall be appointed by the
President, by and with the advice and consent of the Senate.

(2) COMPENSATION- The Managing Directors shall be compensated at the rate provided for level IV of
the Executive Schedule under section 5315 of title 5, United States Code.

(3) DUTIES—

(A) INVESTMENT PROGRAMS- A Managing Director shall be primarily responsible for

monitoring the funds distributed by the Corporation.

(B) MENTORING AND ADVISEMENT PROGRAMS- A Managing Director shall be primarily

responsible for monitoring the mentoring and advisement programs implemented by Financial
Institutions selected to receive funds.

(c) CHIEF FINANCIAL OFFICER—

(1) IN GENERAL- There shall be in the Council a Chief Financial Officer, who shall be appointed by the
President, by and with the advice and consent of the Senate.

(2) COMPENSATION- The Chief Financial Officer shall be compensated at the rate provided for level IV
of the Executive Schedule under section 5315 of title 5, United States Code.

(3) DUTIES- THE CHIEF FINANCIAL OFFICER SHALL—

(A) report directly to the Chairperson regarding financial management matters;

(B) oversee all financial management activities relating to the programs and operations of the
Corporation;

(C) develop and maintain an integrated accounting and financial management system for the
Corporation, including financial reporting and internal controls;

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 (D) develop and maintain any joint financial management systems with Financial Institutions
selected to receive funds as necessary to carry out the of the provisions of this Act; and

(E) direct, manage, and provide policy guidance and oversight of the financial management
personnel, activities, and operations of the Corporation.

TITLE III: AUTHORIZATION OF APPROPRIATIONS

SEC. 11. AUTHORIZATION OF APPROPRIATIONS.

(a) There are authorized to be appropriated to carry out the provisions of the Act $200,000,000 for each fiscal year
for 5 years beginning in 2012, and such sums as may be necessary for each of the fiscal years proceeding 2017 as
determined and approved by Congress.

(b) ADMINISTRATION AND COORDINATION-

(1) IN GENERAL- For each fiscal year, there are authorized to be used for the administration of this Act, 15
percent of the total amount appropriated under subsection (a) with respect to such year.

(2) RECIPIENTS OF FUNDING- The Corporation shall direct Financial Institutions to limit administrative
expenditures to 15 percent of the total funds issued to them by the Corporation and further direct recipients on
the disposal of such funds as pursuant to section 3(d).

SEC. 12. UNITED STATES NATIONAL INNOVATION BONDS.

(a) IN GENERAL- There is established a National Innovation Bond that shall be marketable directly by the Corporation
for National Innovation, the United States Treasury, and such Financial Institutions designated to receive funds under
this Act.

(b) DEFINITION- For purposes of this Act, the term `National Innovation Bond' means an obligation—

(1) issued and guaranteed by the United States Treasury except when issued by a recipient Financial
Institution as according to subsection (c)(3); and

(2) marketed and sold by the Corporation, the United States Treasury or such Financial Institutions
designated to receive funds under this Act for the express and sole purpose of providing the Corporation,
and Financial Institutions selected to receive funds, with capital for investment in Companies that meet the
qualifications established in sections 4(c) and 4(e).

(c) LIMITATIONS—

(1) FEDERAL GUARANTEE- National Innovation Bonds shall be considered Federally guaranteed
financial instruments except when issued by Financial Institutions in receipt of funds from the Corporation.

(2) PROCEEDS- 100 percent of the proceeds from National Innovation Bonds must be used for investment
in Companies eligible for funding under sections 4(c) and 4(e).

(3) COMPLIANCE- The issuer must make an irrevocable election to have the provisions of subsection (c)
and section 13(c) apply.

(d) INTEREST ON NATIONAL INNOVATION BONDS INCLUDIBLE IN GROSS INCOME FOR FEDERAL
INCOME TAX PURPOSES- For purposes of this title, interest on any National Innovation Bond shall be includible
in gross income.

SEC. 13. TAX CREDIT FOR NATIONAL INNOVATION BONDS.

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 (a) IN GENERAL- In the case of a National Innovation Bond issued by a recipient of funds from the Corporation,
the owner of such a bond shall receive a portion of the interest, with respect to each interest payment under such
bond, in the form of a Federal tax credit pursuant to Internal Revenue Code 54AA.

(b) AMOUNT OF CREDIT- The maximum amount of the credit determined under this subsection with respect to
any interest payment date for a National Innovation Bond is 35 percent of the amount of interest payable by the
issuer with respect to such date.

(c) LIMITATIONS—

(1) TAX CREDIT LIMIT- The tax credit established by subsection (a) shall not exceed 50 percent of the
total Federal tax liability of the bondholder.

(2) APPLICATION OF TAX CREDITS- Tax credits established by subsection (a) shall first be applied
to—

(A) Federal tax liability resulting from interest accrued on the National Innovation Bond itself in
accordance with section 12(d); and

(B) then to all other Federal tax liability except where prohibited by law.

SEC. 14. RECIPIENT OBLIGATIONS.

(a) RECOUP OF FUNDS- Financial Institutions selected to receive funds shall enter into an agreement to return a
percentage of profits attained through investment in Companies with such funds back to the Corporation.

(b) DATE OF PAYMENT- Recipient Financial Institutions shall be required to make payments of all sums owed to
the Corporation pursuant to subsection (a) no later than 6 months subsequent to the life-cycle of the fund.

RESHMA SAUJANI FOR CONGRESS 11