,,ii #aaith ,,congress #ast ,session ,s4 #afde ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #g1 #bjbe ,mr4 ,van ,hollen 7for himself1 ,mr4 ,moran1 ,ms4 ,baldwin1 ,mr4 ,young1 ,mrs4 ,shaheen1 ,mr4 ,schmitt1 and ,mr4 ,welch7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to establish a domestic ownership investment facility1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,american ,ownership and ,resilience ,act4 #b4 ,definitions ,in this ,act3 7#a7 #aidj ,act ,company ,the term #aidj ,act ,company means an investment company subject to registration under the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq474 7#b7 #aihj ,act ,company ,the term #aihj ,act ,company means an investment company subject to registration under the ,small ,business ,investment ,incentive ,act of #aihj 7#ae ,u4,s4,c4 #hj;a-#ea et seq474 7#c7 ,articles ,the term articles means-- 7,a7 articles of incorporation for an incorporated body2 or 7,b7 the functional equivalent or other similar documents specified by the ,secretary for other business entities4 7#d7 ,capital interest ,the term capital interest means an interest in a subsidiary ,,llc determined at the time of receipt that gives the holder of the interest a share of the proceeds in a complete liquidation of the subsidiary ,,llc if the assets of the subsidiary ,,llc are sold at fair market value4 7#e7 ,covered business concern ,the term covered business concern means an enterprise1 regardless of any size standard1 that is independently owned and operated1 except that an investment by a venture capital firm1 investment company1 employee welfare benefit plan or pension plan1 or trust1 foundation1 or endowment that is exempt from ,federal income taxation shall not cause a business concern to be deemed not independently owned and operated regardless of the allocation of control during the investment period under any investment agreement between the business concern and the entity making the investment4 7#f7 ,covered investment ,the term covered investment means1 with respect to an investment in a covered business concern-- 7,a7 the provision of capital to finance the sale of an ownership interest of a covered business concern1 including a covered business concern created as a result of a corporate divestiture1 to an employee stock ownership plan or eligible worker-owned cooperative if such sale results in-- 7i7 the employee stock ownership plan or eligible worker-owned cooperative1 respectively1 holding a majority interest of the outstanding stock of the covered business concern2 and 7ii7 with respect to such a sale to an employee stock ownership plan1 the appointment of an independent trustee for the transaction2 or 7,b7 the provision of capital to finance a covered business concern if-- 7i7 an employee stock ownership plan or eligible worker-owned cooperative holds a majority interest of the outstanding stock of the covered business concern1 prior to and immediately following the provision of capital2 and 7ii7 the provision of capital does not reduce the percentage of stock of the covered business concern held by the employee stock ownership plan or eligible worker-owned cooperative 7as applicable71 excluding any synthetic equity4 7#g7 ,department ,the term ,department means the ,department of ,commerce4 7#h7 ,eligible worker-owned cooperative ,the term eligible worker-owned cooperative has the meaning given that term in section #ajdb7;c7 of the ,internal ,revenue ,code of #aihf4 7#i7 ,employee stock ownership plan ,the term employee stock ownership plan has the meaning given that term in section #dige7;e7 of the ,internal ,revenue ,code of #aihf4 7#aj7 ,employee welfare benefit plan2 pension plan ,the terms employee welfare benefit plan and pension plan-- 7,a7 have the meanings given those terms in section #c of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajjb72 and 7,b7 include-- 7i7 public and private pension or retirement plans subject to such ,act2 and 7ii7 similar plans not covered by such ,act that have been established and that are maintained by the ,federal ,government or any ,state or political subdivision1 or any agency or instrumentality thereof1 for the benefit of employees4 7#aa7 ,independent financial advisor ,the term independent financial advisor means a financial or valuation advisor that-- 7,a7 is in the profession of serving as a financial or valuation advisor for transactions involving employee stock ownership plans2 7,b7 has never-- 7i7 performed services1 including a preliminary valuation1 for or on behalf of-- 7,i7 any party selling an ownership interest in the covered business concern to the employee stock ownership plan involved in the transaction that the advisor is evaluating2 or 7,,ii7 the covered business concern1 unless the services were provided solely to an existing employee stock ownership plan sponsored by the covered business concern2 or 7ii7 been a director1 officer1 or employee of the covered business concern2 7,c7 has not performed services related to the transaction the advisor is evaluating1 including a preliminary valuation1 for or on behalf of-- 7i7 the ownership investment company that is preparing to or has already allocated capital to the covered business concern2 or 7ii7 any other entity that is structuring or financing the transaction for any party other than the employee stock ownership plan2 and 7,d7 does not have a familial or corporate relationship 7such as a parent-subsidiary relationship7 to any of person or entity described in subparagraph 7,b7 or 7,c74 7#ab7 ,independent trustee ,the term independent trustee means a trustee that-- 7,a7 is in the profession of serving as a fiduciary for employee stock ownership plans2 7,b7 has never-- 7i7 performed services for or on behalf of any party selling an ownership interest in the covered business concern to the employee stock ownership plan involved in the transaction that the trustee is considering2 or 7ii7 been a director1 officer1 or employee of the covered business concern2 7,c7 has not performed services for or on behalf of the covered business concern at any time during the #e-year period ending on the date of execution of the transaction the trustee is considering1 unless such services solely consisted of acting as a fiduciary of an employee benefit plan 7including an employee stock ownership plan7 under the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajja et seq472 7,d7 has not performed services related to the transaction the trustee is considering1 for or on behalf of-- 7i7 the ownership investment company that is preparing to or has already allocated capital to the covered business concern2 or 7ii7 any other entity that is structuring or financing the transaction for any party other than the employee stock ownership plan2 and 7,e7 does not have a familial or corporate relationship 7such as a parent-subsidiary relationship7 to any person or entity described in subparagraph 7,b71 7,c71 or 7,d74 7#ac7 ,leverage ,the term leverage means debentures guaranteed by the ,department4 7#ad7 ,license ,the term license means a license issued by the ,department as provided in section #d7;c74 7#ae7 ,licensee ,the term licensee means a company approved by the ,secretary to operate under the provisions of this ,act and issued a license provided in section #d7;c74 7#af7 ,limited liability company ,the term limited liability company means a business entity that is organized and operating in accordance with a ,state limited liability company statute approved by the ,department4 7#ag7 ,member ,the term member means1 with respect to a licensee that is a limited liability company1 a holder of an ownership interest or a person otherwise admitted to membership in the limited liability company4 7#ah7 ,non-leveraged licensee ,the term non-leveraged licensee means a licensee that-- 7,a7 has no outstanding leverage or leverage commitment2 and 7,b7 certifies to the ,department in writing that the licensee will not seek leverage in the future4 7#ai7 ,outstanding stock ,the term outstanding stock means shares of stock1 including synthetic equity4 7#bj7 ,ownership investment company ,the term ownership investment company means-- 7,a7 a company approved by the ,secretary to operate under the provisions of this ,act and issued a license as provided in section #d7;c72 and 7,b7 for which-- 7i7 #ajj percent of the total capital managed by the investment firm shall be invested in covered investments2 7ii7 not less than #ej percent of the total capital managed by the investment firm shall be invested in covered investments described in paragraph 7#f77;,a72 and 7iii7 covered investment returns are obtained from debt1 synthetic equity1 preferred stock1 equity1 or a combination thereof1 including returns obtained from cash interest1 payment-in-kind interest1 and stock warrants4 7#ba7 ,preferred stock ,the term preferred stock has the meaning given that term in section #cea7;g77#c7 of the ,internal ,revenue ,code of #aihf4 7#bb7 ,private capital ,the term private capital-- 7,a7 means the sum of-- 7i7 the paid-in capital and paid-in surplus of a corporate licensee1 the contributed capital of the partners of a partnership licensee1 or the equity investment of the members of a limited liability company licensee2 and 7ii7 unfunded binding commitments1 from investors that meet criteria established by the ,secretary1 to contribute capital to the licensee1 provided that such unfunded commitments may be counted as private capital for purposes of approval by the ,secretary of any request for leverage1 but leverage shall not be funded based on such commitments2 and 7,b7 does not include any-- 7i7 funds borrowed by a licensee from any source2 7ii7 funds obtained through the issuance of leverage2 or 7iii7 funds obtained directly or indirectly from any ,federal1 ,state1 or local government1 or any government agency or instrumentality1 except for-- 7,i7 funds obtained from the business revenues 7excluding any governmental appropriation7 of any federally chartered or government-sponsored corporation established before ,october #a1 #aihg2 7,,ii7 funds invested by an employee welfare benefit plan or pension plan2 and 7,,iii7 any qualified nonprivate funds 7if the investors of the qualified nonprivate funds do not control1 directly or indirectly1 the management1 board of directors1 general partners1 or members of the licensee74 7#bc7 ,profits interest ,the term profits interests means an interest in a subsidiary ,,llc other than a capital interest4 7#bd7 ,protg ,,oic ,the term ,protg ,,oic means an entity licensed under section #d7;c7 as an ownership investment company and selected in accordance with section #f-- 7,a7 for which the managers of the firm have a documented record of successful business experience2 and 7,b7 that has an investment track record that does not meet the requirements under section #d7;c77#c77;,b77i74 7#be7 ,secretary ,the term ,secretary means the ,secretary of ,commerce4 7#bf7 ,state ,the term ,state includes the several ,states1 the territories and possessions of the ,united ,states1 the ,commonwealth of ,puerto ,rico1 and the ,district of ,columbia4 7#bg7 ,subsidiary ,,llc ,the term subsidiary ,,llc means a limited liability company owned by a corporation through equity ownership of the subsidiary with a common parent corporation1 as described in section #aefc of the ,internal ,revenue ,code of #aihf1 in which-- 7,a7 the equity of the subsidiary ,,llc owned by the corporation possesses not less than #hj percent of the total combined voting power of all classes of equity of the subsidiary ,,llc entitled to vote2 and 7,b7 the equity value of the subsidiary ,,llc owned by the corporation that represents-- 7i7 not less than #ea percent of the total value of all classes of equity of the subsidiary ,,llc2 and 7ii7 not less than #ea percent equity ownership of the subsidiary ,,llc4 7#bh7 ,synthetic equity ,the term synthetic equity includes-- 7,a7 synthetic equity1 as defined in section #dji7p77#f7 of the ,internal ,revenue ,code of #aihf2 7,b7 a profits interest of a subsidiary ,,llc granted to1 purchased by1 or otherwise obtained directly or indirectly by employees and directors of the subsidiary ,,llc2 and 7,c7 nonqualified deferred compensation plans and arrangements subject to section #dji;,a of the ,internal ,revenue ,code of #aihf4 7#bi7 ,third party debt ,the term third party debt means any indebtedness for borrowed money1 other than indebtedness owed to the ,department4 #c4 ,ownership investment facility 7a7 ,definition of facility ,in this section1 the term facility means the facility established under subsection 7b74 7b7 ,establishment ,the ,secretary shall establish and carry out a facility to provide leverage to licensed ownership investment companies for the purpose of encouraging covered investments4 7c7 ,combined leverage ,the ,secretary may not provide leverage to ownership investment companies under the facility in a total amount that is greater than #e1jjj1jjj1jjj for a fiscal year4 ,not more than #bj percent of such total amount may be provided to ,protg ,,oic companies for a fiscal year4 7d7 ,transaction requirements 7#a7 ,in general ,with respect to a covered investment described in section #b7f77;,a7 involving a sale to an employee stock ownership plan1 an independent trustee for the employee stock ownership plan shall be appointed by the covered business concern before the execution of the covered investment for a period of time that is sufficient for the independent trustee to fully evaluate the proposed transaction4 7#b7 ,fairness opinion ,with respect to the scope of appointment under paragraph 7#a71 an independent trustee appointed under paragraph 7#a7 shall obtain a fairness opinion on the proposed covered investment from an independent financial advisor1 which shall evaluate whether the price1 terms1 and cost of financing of the proposed covered investment are financially fair to the employee stock ownership plan4 7e7 ,prohibitions 7#a7 ,financing 7,a7 ,in general ,an employee of a covered business concern may not provide personal financing of any kind for a covered investment1 including through a wage concession or rollover of a retirement plan4 7,b7 ,exceptions ,subparagraph 7,a7 shall not apply to-- 7i7 financing provided by an employee for the sale of an ownership interest held by the employee in a covered business concern2 or 7ii7 employee capital contributions or membership fees paid by members of an eligible worker-owned cooperative1 if such amounts are reasonable and customary and not used for the purchase of the covered business concern4 7#b7 ,control ,an ownership investment company shall not exercise control over a covered business concern in which the ownership investment company has made a covered investment4 7f7 ,employee allocations ,with respect to a covered investment described in section #b7f77;,a7 made by an ownership investment company that involves an employee stock ownership plan1 the employee stock ownership plan shall include a requirement that in the event of a sale to a third party of the covered business concern in which the covered investment is made1 the proceeds that the employee stock ownership plan receives from the sale shall be distributed as though all shares of stock held by the employee stock ownership plan prior to the sale were fully allocated based on each participant's compensation1 as defined under section #dae7;c77#c7 of the ,internal ,revenue ,code of #aihf4 7g7 ,recirculation of shares 7#a7 ,share count ,with respect to a covered investment described in section #b7f77;,a7 made by an ownership investment company that involves an employee stock ownership plan1 the number of shares held by the employee stock ownership plan on the final date of each plan year shall not be less than the number of shares held by the employee stock ownership plan on the execution date of the covered investment4 7#b7 ,limitation ,the requirements under paragraph 7#a7 shall apply only with respect to the period during which the ownership investment company has an interest in the covered business concern4 7#c7 ,exception ,the requirement under paragraph 7#a7 may be waived by the independent trustee for the applicable employee stock ownership plan4 7h7 ,independent trustees ,with respect to a covered investment described in section #b7f77;,a7 made by an ownership investment company that involves an employee stock ownership plan1 the employee stock ownership plan shall have an independent trustee during the period that the ownership investment company has an interest in the covered business concern4 7i7 ,subsidiary ,l,l,cs ,with respect to any covered investment made by an ownership investment company that involves an employee stock ownership plan1 a subsidiary ,,llc may be permitted to be established1 provided that the following requirements are met3 7#a7 ,,esop majority interest ,the employee stock ownership plan exercises a majority interest in the subsidiary ,,llc as a result of the sale or provision of capital4 7#b7 ,s corporation board governance ,the board governance of the subsidiary ,,llc resides exclusively at the level of the ,s corporation by which the subsidiary ,,llc is owned4 7#c7 ,profits interest ,the profits interest or any type of similar arrangements1 including phantom stock and any deferred bonus plan related to equity in the subsidiary ,,llc1 complies with section #dji7p7 of the ,internal ,revenue ,code of #aihf4 7#d7 ,event protection ,the requirements of subsection 7f7 apply at the level of the subsidiary ,,llc4 7j7 ,procedures related to a sale of a covered business concern 7#a7 ,in general ,subject to paragraph 7#b71 an ownership investment company shall require as a condition of making a covered investment described in section #b7f77;,a7 involving an employee stock ownership plan that-- 7,a7 before any stock sale or the execution of any corporate matter listed in section #dji7;e77#c7 of the ,internal ,revenue ,code of #aihf1 the employee stock ownership plan shall-- 7i7 appoint an independent trustee for the transaction2 and 7ii7 require that the independent trustee obtain a fairness opinion from an independent financial advisor1 which shall evaluate whether the price1 terms1 and cost of financing of the proposed covered investment are financially fair to the employee stock ownership plan2 and 7,b7 the employee stock ownership plan requires that-- 7i7 in addition to the corporate matters listed in section #dji7;e77#c7 of the ,internal ,revenue ,code of #aihf1 each participant or beneficiary in the employee stock ownership plan is entitled to direct the employee stock ownership plan as to the manner in which voting rights under securities of the employer which are allocated to the account of such participant or beneficiary are to be exercised with respect to the approval or disapproval of any stock sale2 7ii7 the requirements of section #dji7;e77#c7 of the ,internal ,revenue ,code of #aihf and clause 7i7 of this subparagraph shall be met using the procedures described in section #dji7;e77#e7 of the ,internal ,revenue ,code of #aihf2 7iii7 unless the parties agree otherwise1 with respect to unallocated shares1 the independent trustee shall be directed to vote or tender such unallocated shares in the same proportion as allocated shares for which the independent trustee has received voting or tender instructions from participants in the employee stock ownership plan2 and 7iv7 with respect to allocated shares that the independent trustee does not receive voting or tender instructions from participants in the employee stock ownership plan1 the independent trustee shall have voting discretion over such shares4 7#b7 ,voting discretion ,nothing in paragraph 7#a77;,b7 shall limit the ability of an independent trustee to exercise voting discretion in accordance with the fiduciary obligations of the independent trustee under the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #ajja et seq474 7#c7 ,limitation ,the requirements under paragraph 7#a7 shall apply only with respect to the period during which the ownership investment company has an interest in the covered business concern4 7k7 ,reports ,each ownership investment company 7including ,protg ,o,i,cs7 shall submit to the ,secretary an annual report1 which shall include1 for the year covered by the report1 the following information1 disaggregated by type of covered investment as described in subparagraph 7,a7 or 7,b7 of section #b7f71 as applicable3 7#a7 ,whether the covered investment was made with respect to an employee stock ownership plan or eligible worker-owned cooperative4 7#b7 ,for an employee stock ownership plan-- 7,a7 the effective date of the employee stock ownership plan2 7,b7 the number of active employee stock ownership plan participants2 7,c7 the number of employees of the covered business concern for which the employee stock ownership plan is established2 7,d7 the total value of employer securities1 as determined by an independent appraiser hired by the independent trustee of the employee stock ownership plan2 7,e7 the total employee stock ownership plan assets2 7,f7 the total contributions during the employee stock ownership plan year2 7,g7 the total distributions during the employee stock ownership plan year2 7,h7 the median account asset balance2 and 7,i7 demographic information of employee stock ownership plan participants1 disaggregated by race1 gender1 and ,state1 to the extent available4 7#c7 ,for an eligible worker-owned cooperative-- 7,a7 the number of member-owners2 7,b7 the number of employees of the covered business concern for which the eligible worker-owned cooperative is established2 7,c7 the total value of employer securities2 7,d7 the aggregate assets of all membership accounts of the eligible worker-owned cooperative2 7,e7 the median membership account balance2 and 7,f7 demographic information of membership base1 disaggregated by race1 gender1 and ,state1 to the extent available4 7l7 ,implementation milestones 7#a7 ,in general ,not later than #edj days after the date of enactment of this ,act1 the ,secretary shall begin accepting applications to be licensed to participate in the facility as an ownership investment company4 7#b7 ,license timeline ,not later than #b years after the date of enactment of this ,act1 the ,secretary shall approve the first tranche of licenses to participate in the facility as an ownership investment company with respect to applicants that satisfy the applicable eligibility criteria4 7m7 ,sunset 7#a7 ,definition ,in this subsection1 the term sunset date means the first day of the #bjth calendar year that begins after the date on which the ,secretary approves the first license to participate in the facility as an ownership investment company 7including as a ,protg ,,oic74 7#b7 ,termination of authority ,on and after the sunset date1 the ,secretary may not license an entity to participate in the facility as an ownership investment company 7including as a ,protg ,,oic74 7#c7 ,continued participation by existing entities ,nothing in paragraph 7#b7 shall be construed to prohibit an ownership investment company 7including a ,protg ,,oic7 from continuing to draw leverage on and after the sunset date that was committed to the entity through the facility before the sunset date4 7#d7 ,application ,the ,secretary shall not consider paragraph 7#b7 as a factor in the decision to license an entity to participate in the facility as an ownership investment company 7including as a ,protg ,,oic7 before the sunset date4 #d4 ,organization of ownership investment companies 7a7 ,in general 7#a7 ,requirement ,an ownership investment company shall be an incorporated body1 a limited liability company1 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 contemplated under this ,act1 which-- 7,a7 if incorporated1 has succession for a period of not fewer than #cj years unless sooner dissolved by its shareholders2 or 7,b7 if a limited partnership1 has succession for a period of not fewer than #aj years1 and possesses the powers reasonably necessary to perform such functions and conduct such activities4 7#b7 ,area of operation ,the area in which an ownership investment company described in paragraph 7#a7 is to conduct its operations1 and the establishment of branch offices or agencies 7if authorized by the articles71 shall be subject to the approval of the ,department4 7b7 ,articles 7#a7 ,requirements ,the articles of any ownership investment company shall specify-- 7,a7 the objects for which the company is formed in general terms2 7,b7 the name assumed by the ownership investment company2 7,c7 the area or areas in which the operations of the ownership investment company are to be carried on2 7,d7 the place where the principal office of the ownership investment company is to be located2 and 7,e7 the amount and classes of the shares of capital stock of the ownership investment company4 7#b7 ,inclusions ,articles of an ownership investment company may contain any other provisions not inconsistent with this ,act that the ownership investment company may see fit to adopt for the regulation of the business of the ownership investment company and the conduct of the affairs of the ownership investment company4 7#c7 ,approval ,articles of an ownership investment company and any amendments thereto adopted from time to time shall be subject to the approval of the ,secretary4 7c7 ,issuance of license 7#a7 ,submission of application 7,a7 ,in general ,each applicant to operate as an ownership investment company 7including a ,protg ,,oic7 under this ,act shall submit to the ,secretary an application1 in a form and including such documentation as may be prescribed by the ,secretary4 7,b7 ,rolling basis ,the ,secretary shall accept applications under subparagraph 7,a7 on a rolling basis4 7,c7 ,electronic submissions ,the ,secretary shall allow an applicant under this subsection to electronically submit any document required by this subsection and to provide an electronic signature for any signature that is required on such a document4 7#b7 ,procedures 7,a7 ,status ,not later than #ij days after the initial receipt by the ,secretary of an application under this subsection1 the ,secretary shall provide the applicant with a written report detailing the status of the application and any requirements remaining for completion of the application4 7,b7 ,approval or disapproval ,within #ij days after receiving a completed application submitted in accordance with this subsection and in accordance with such requirements as the ,secretary may prescribe by regulation1 the ,secretary shall-- 7i7 approve the application and issue a license for such operation to the applicant if the requirements of this section are satisfied2 or 7ii7 disapprove the application and notify the applicant in writing of the disapproval4 7#c7 ,matters considered 7,a7 ,in general ,in reviewing and processing any application under this subsection1 the ,secretary-- 7i7 shall determine whether-- 7,i7 the applicant meets the requirements of subsections 7a7 and 7b7 of section #f2 and 7,,ii7 the management of the applicant is qualified and has the knowledge1 experience1 and capability necessary to comply with this ,act2 7ii7 shall take into consideration-- 7,i7 the need for and availability of financing for a covered business concerns in the geographic area in which the applicant is to commence business2 7,,ii7 the general business reputation of the owners and management of the applicant2 and 7,,iii7 the probability of successful operations of the applicant1 including adequate profitability and financial soundness2 and 7iii7 shall not take into consideration any projected shortage or unavailability of leverage4 7,b7 ,additional matters considered for ownership investment companies 7i7 ,investment track record ,except as provided in clause 7ii71 an applicant for a license to operate as an ownership investment company shall submit to the ,secretary proof that the managers of the applicant have a track record of managing investments1 including structured investments1 realized or unrealized1 in an employee stock ownership plan or eligible worker-owned cooperative4 7ii7 ,advisory requirement ,an applicant that does not have an investment track record described in clause 7i7 or that is a ,protg ,,oic shall submit to the ,secretary evidence that the applicant has retained or will retain a legal1 accounting1 or financial advisory firm with not fewer than #e years of experience in structuring employee stock ownership plans or eligible worker-owned cooperatives4 7iii7 ,limitation ,the ,secretary may not reject an applicant for a license to operate as an ownership investment company solely because the applicant lacks a sufficient track record in realized investments if the applicant demonstrates an otherwise successful investment track record that includes unrealized covered investments4 7,c7 ,provisional approval 7i7 ,in general ,the ,secretary may provide provisional approval for a license to participate in the facility as an ownership investment company 7including a ,protg ,,oic7 for a period not to exceed #a year to an investment firm submitting an application under this subsection or-- 7,i7 that does not meet the minimum private capital requirements under section #f7;a7 necessary for licensing under this subsection at the time of application2 7,,ii7 that states an intent to more effectively raise capital commitments in private markets with a license2 and 7,,iii7 that states an intent to more precisely request the desired amount of leverage contingent on securing capital from private market investors4 7ii7 ,capital requirements ,an applicant granted provisional approval under clause 7i7 shall not be eligible to receive leverage until the applicant satisfies the requirements of section #f7;a74 7,d7 ,fees 7i7 ,in general ,the ,secretary may prescribe fees to be paid by each applicant for a license to operate as an ownership investment company 7including a ,protg ,,oic7 under this ,act4 7ii7 ,use of amounts ,fees collected under this subparagraph-- 7,i7 shall be deposited in the account for salaries and expenses of the ,department2 and 7,,ii7 are authorized to be appropriated solely to cover the costs of licensing examinations4 7d7 #aidj and #aihj ,act ,companies 7#a7 ,in general 7,a7 ,application ,a #aidj ,act ,company or #aihj ,act ,company is eligible to apply for a license under this ,act4 7,b7 ,eligibility of licensees ,a licensee that is not registered as a #aidj ,act ,company or #aihj ,act ,company is eligible to apply for approval from the ,secretary to convert to a #aidj ,act ,company or #aihj ,act ,company4 7#b7 ,regulation ,a #aidj ,act ,company or #aihj ,act ,company that is a licensee may elect to be taxed as a regulated investment company for purposes of section #hea of the ,internal ,revenue ,code of #aihf 7#bf ,u4,s4,c4 #hea71 provided that the licensee making such election may make distributions only as permitted under the applicable guidance or regulations that the ,secretary may prescribe4 #e4 ,protg ,,oic ,program 7a7 ,establishment ,the ,secretary shall establish a program to be known as the ,protg ,,oic ,program under which a manager of an ownership investment company that is not a ,protg ,,oic may enter into a written agreement approved by the ,secretary to provide guidance and assistance to a ,protg ,,oic with respect to-- 7#a7 applying for a license for the ,protg ,,oic to operate as an ownership investment company2 and 7#b7 management of the ownership investment company after licensure4 7b7 ,application ,after entering into a written agreement described in subsection 7a71 the ,protg ,,oic shall apply for a license under section #d7;c74 7c7 ,selection ,the ,secretary may grant a license to a ,protg ,,oic to operate as an ownership investment company under section #d7;c7 based on the investment track record of #a or more of the managers that have entered into a written agreement described in subsection 7a7 of this section with the applicant ,protg ,,oic4 7d7 ,requirements for managers ,if a manager enters into a written agreement described in subsection 7a7-- 7#a7 the manager may hold a minority financial interest in the ownership investment company that is to be managed by the ,protg ,,oic2 7#b7 the otherwise applicable maximum amount of outstanding leverage that may be made available to any #a licensed company of the manager under section #g7;b77#f77;,b77i77,i7 shall be increased by #ag1ejj1jjj2 and 7#c7 the otherwise applicable maximum amount of outstanding leverage that may be made available to any #b or more licensed companies that are commonly controlled by the manager under section #g7;b77#f77;,b77i77,,ii7 shall be increased by #ce1jjj1jjj4 #f4 ,capital requirements 7a7 ,amount 7#a7 ,in general ,the private capital of each licensee shall be not less than #aj1jjj1jjj4 7#b7 ,adequacy ,in addition to the requirement under paragraph 7#a71 the ,secretary shall-- 7,a7 determine whether the private capital of each licensee is adequate to assure a reasonable prospect that the licensee will be operated soundly and profitably1 and managed actively and prudently in accordance with the articles of the licensee2 and 7,b7 determine whether the licensee will be able1 both prior to licensing and prior to approving any request for financing1 to make periodic payments on any debt of the licensee that is interest bearing and shall take into consideration the income that the licensee anticipates on the contemplated investments of the licensee1 the experience of the owners and managers of the licensee1 the history of the licensee as an entity1 if any1 and the financial resources of the licensee4 7b7 ,diversification of ownership ,the ,secretary shall ensure that the management of each licensee 7including ,protg ,o,i,cs7 is sufficiently diversified from and unaffiliated with the ownership of the licensee in a manner that ensures independence and objectivity in the financial management and oversight of the investments and operations of the licensee4 #g4 ,borrowing power 7a7 ,in general ,each ownership investment company shall have authority to borrow money and to issue its securities1 promissory notes1 or other obligations under such general conditions and subject to such limitations and regulations as the ,secretary may prescribe4 7b7 ,authority ,to guarantee 7#a7 ,grant of authority ,to encourage the formation and growth of ownership investment companies the ,secretary may1 when authorized in appropriation ,acts1 guarantee the timely payment of all principal and interest as scheduled on debentures issued by ownership investment companies4 7#b7 ,terms and conditions ,guarantees made under paragraph 7#a7 may be made by the ,secretary on such terms and conditions as the ,secretary deems appropriate1 pursuant to regulations issued by the ,secretary4 7#c7 ,full faith and credit ,the full faith and credit of the ,united ,states is pledged to the payment of all amounts that may be required to be paid under any guarantee under this subsection4 7#d7 ,status of debentures ,debentures guaranteed by the ,department under this subsection shall be subordinate to any other debenture bonds1 promissory notes1 or other debts and obligations of an ownership investment company1 unless the ,secretary1 in the exercise of reasonable investment prudence and in considering the financial soundness of such ownership investment company1 determines otherwise4 7#e7 ,term and interest rate ,a debenture issued under this subsection may be issued for a term of not to exceed #ae years and shall bear interest at a rate not less than a rate determined by the ,secretary of the ,treasury1 taking into consideration the current average market yield on outstanding marketable obligations of the ,united ,states with remaining periods to maturity comparable to the average maturities on such debentures1 adjusted to the nearest #a_/h of #a per centum1 plus an additional charge1 in an amount established annually by the ,secretary1 as necessary to reduce to #j the cost 7as defined in section #ejb of the ,federal ,credit ,reform ,act of #aiij 7#b ,u4,s4,c4 #ffa;a77 to the ,department guaranteeing debentures under this ,act1 which amount may not exceed #a4ch percent per year1 and which shall be paid to and retained by the ,department4 7#f7 ,additional restrictions and limitations ,a debenture issued under this subsection-- 7,a7 shall include such other terms as the ,department may fix2 and 7,b7 shall be subject to the following restrictions and limitations3 7i7 7,i7 ,the maximum amount of outstanding leverage made available to any #a ownership investment company licensed under section #d7;c7 that is not a ,protg ,,oic may not exceed the lesser of-- 7aa7 #ajj percent of the private capital of such company2 or 7bb7 #ejj1jjj1jjj4 7,,ii7 ,the maximum amount of outstanding leverage made available to #b or more ownership investment companies licensed under section #d7;c7 that are commonly controlled 7as determined by the ,secretary7 and not under capital impairment may not exceed #a1jjj1jjj1jjj4 7ii7 ,a ,protg ,,oic may not have multiple licenses under common control4 7iii7 ,the maximum amount of outstanding leverage made available under the facility established under section #c to any #a ,protg ,,oic may not to exceed the lesser of-- 7,i7 #ajj percent of the private capital of the ,protg ,,oic2 or 7,,ii7 #ajj1jjj1jjj4 7iv7 7,i7 ,in calculating the outstanding leverage of a company for the purposes of subclauses 7,i7 and 7,,ii7 of clause 7i71 the ,secretary shall not include the amount of the cost basis of any covered investment made by the ownership investment company in a covered business concern that-- 7aa7 conducts in the ,united ,states research and development1 engineering1 or production activities necessary or incidental to manufacturing2 7bb7 operates in a critical industry or critical technology area identified by the ,secretary to be vital to maintaining the national or economic security of the ,united ,states2 and 7cc7 is headquartered in the ,united ,states1 or will be headquartered in the ,united ,states immediately following the transaction in the case of a covered investment described in section #b7f77;,a74 7,,ii7 ,the exclusion of amounts in subclause 7,i7 shall not exceed a total of #ge1jjj1jjj or #be percent of private capital of such company1 whichever is less4 7,,iii7 ,subclause 7,i7 shall not apply to any ,protg ,,oic4 7v7 ,nothing in this paragraph shall prevent licensees with #a or more small business investment companies licensed under section #cja7;c7 of the ,small ,business ,investment ,act of #aieh 7#ae ,u4,s4,c4 #fha7 under common control 7as determined by the ,secretary71 including licensees whose small business investment companies have received the maximum amount of leverage in sections #cjc7;b77#b77;,a7 or #cjc7;b77#b77;,b7 of that ,act1 from receiving the maximum amount of leverage in clause 7i74 7c7 ,third party debt ,the ,secretary-- 7#a7 may not permit a licensee having outstanding leverage to incur third party debt that would create or contribute to an unreasonable risk of default or loss to the ,federal ,government2 and 7#b7 shall permit any licensee to incur third party debt only on such terms and subject to such conditions as may be established by the ,secretary1 by regulation or otherwise4 7d7 ,capital impairment ,before approving any application for leverage submitted by a licensee under this ,act1 the ,secretary-- 7#a7 shall determine that the private capital of the licensee meets the requirements of section #f7;a72 and 7#b7 shall determine1 taking into account the nature of the assets of the licensee1 the amount and terms of any third party debt owed by such licensee1 and any other factors determined to be relevant by the ,secretary1 that the private capital of the licensee has not been impaired to such an extent that the issuance of additional leverage would create or otherwise contribute to an unreasonable risk of default or loss to the ,federal ,government4 7e7 ,leverage fee ,with respect to leverage granted by the ,department to a licensee1 the ,department shall collect from the licensee a nonrefundable fee in an amount equal to #c percent of the face amount of leverage granted to the licensee in the following manner3 7#a7 ,one percent upon the date on which the ,department enters into any commitment for such leverage with the licensee4 7#b7 ,the balance of #b percent 7or #c percent if no commitment has been entered into by the ,department7 on the date on which the leverage is drawn by the licensee4 7f7 ,calculation of subsidy rate ,all fees and interest received and retained by the ,department under this section shall be included in the calculations made by the ,director of the ,office of ,management and ,budget to offset the cost 7as that term is defined in section #ejb of the ,federal ,credit ,reform ,act of #aiij 7#b ,u4,s4,c4 #ffa;a77 to the ,department of guaranteeing debentures under this ,act4 #h4 ,provision of investment capital for covered business concerns 7a7 ,in general ,each ownership investment company shall provide a source of debt1 synthetic equity1 preferred stock1 or equity capital1 or a combination thereof1 for incorporated and unincorporated covered business concerns1 in such manner and under such terms as the ownership investment company may fix in accordance with the regulations established by the ,department4 7b7 ,requirement ,before any capital described in subsection 7a7 is provided to a covered business concern under this section-- 7#a7 the ownership investment company may require a covered business concern to refinance any or all of the outstanding indebtedness of the covered business concern so that the ownership investment company is the only holder of any evidence of indebtedness of the covered business concern2 and 7#b7 except as provided in regulations issued by the ,secretary1 such the covered business concern shall agree that the covered business concern will not thereafter incur any indebtedness without first securing the approval of the ownership investment company and giving the ownership investment company the first opportunity to finance such indebtedness4 7c7 ,third party investors ,investment capital provided to covered business concerns under this section may be provided directly or in cooperation with other investors1 incorporated or unincorporated1 through agreements to participate on an immediate or deferred basis4 7d7 ,interest ,the maximum rate of interest for the share of an ownership investment company of any loan made under this section shall be determined by the ,secretary-- 7#a7 provided that the ,department also shall permit those ownership investment companies that have issued debentures pursuant to this ,act to charge a maximum rate of interest based upon the coupon rate of interest on the outstanding debentures1 determined on an annual basis1 plus such other expenses of the ownership investment company as may be approved by the ,department2 and 7#b7 in making the initial determinations on the maximum rate of interest under this subsection following the enactment of this ,act1 the ,secretary shall consult the regulations promulgated by the ,administrator of the ,small ,business ,administration on the maximum rate of interest for loans and debt securities in accordance with section #cje of the ,small ,business ,investment ,act of #aieh 7#ae ,u4,s4,c4 #fhe74 7e7 ,maturity 7#a7 ,in general ,any loan made under this section shall have a maturity not exceeding #bj years4 7#b7 ,extension or renewal ,any ownership investment company that makes a loan to a covered business concern under this section is authorized to extend the maturity of or renew such loan for additional periods1 not exceeding #aj years1 if the ownership investment company finds that such extension or renewal will aid in the orderly liquidation of such loan4 7f7 ,repayment ,any loan made under this section shall be of such sound value1 or so secured1 as reasonably to assure repayment4 #i4 ,portfolio diversification ,if any ownership investment company obtains financing from the ,secretary under this ,act and such financing remains outstanding1 the aggregate amount of securities acquired and for which commitments may be issued by the ownership investment company under this ,act for any single covered business concern shall not1 without the approval of the ,secretary1 exceed #aj percent of the sum of-- 7#a7 the private capital of such company2 and 7#b7 the total amount of leverage projected by the ownership investment company in the business plan of the ownership investment company that was approved by the ,secretary at the time of the grant of the license of the ownership investment company4 #aj4 ,exemptions 7a7 ,securities ,act of #aicc ,notwithstanding the provisions of title ,i of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 the ,securities and ,exchange ,commission may from time to time by the rules and regulations of the ,securities and ,exchange ,commission1 and subject to such terms and conditions as may be prescribed under section #c of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;c71 add to the securities exempted as provided in section #c of that ,act any class of securities issued by an ownership investment company under this ,act if the ,securities and ,exchange ,commission finds1 having regard to the purposes of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 that the enforcement of title ,i of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq471 with respect to such securities1 is not necessary in the public interest and for the protection of investors4 7b7 ,trust ,indenture ,act of #aici ,notwithstanding the provisions of title ,,iii of the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 the ,securities and ,exchange ,commission may from time to time by the rules and regulations of the ,securities and ,exchange ,commission1 and subject to such terms and conditions as may be prescribed under section #cjd of the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;ddd71 add to the securities exempted as provided in section #cjd of that ,act any class of securities issued by an ownership investment company under this ,act if the ,securities and ,exchange ,commission finds1 having regard to the purposes of the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 that the enforcement of title ,,iii of the ,trust ,indenture ,act of #aici 7#ae ,u4,s4,c4 #gg;aaa et seq471 with respect to such securities is not necessary in the public interest and for the protection of investors4 7c7 ,investment ,company ,act of #aidj ,notwithstanding the provisions of section #ah of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#ah71 the provisions of subparagraphs 7,a7 and 7,b7 of subsection 7a77#a7 of that section shall not apply to any ownership investment company operating under this ,act1 provided that such class of senior security shall be guaranteed by the ,department4 #aa4 ,leverage requirements ,no leverage shall be committed by the ,department under this ,act to any licensee unless the managers of such licensee-- 7#a7 certify to the ,department the names of any attorneys1 agents1 or other persons engaged by or on behalf of such licensee for the purpose of expediting applications made to the ,department for assistance of any sort1 and the fees paid or to be paid to any such persons2 and 7#b7 executes an agreement binding any such licensee for a period of #b years after any assistance is rendered by the ,department to such licensee1 to refrain from employing1 tendering any office or employment to1 or retaining for professional services1 any person who1 on the date such assistance or any part thereof was rendered1 or within the #a year period prior thereto1 shall have served as an officer1 attorney1 agent1 or employee of the ,department occupying a position or engaging in activities which the department shall have determined involve discretion with respect to the granting of assistance under this ,act4 #ab4 ,reporting 7a7 ,in general ,not later than #a year after the date of enactment of this ,act1 and each year thereafter1 the ,secretary shall submit to ,congress a full and detailed account of the operations of the ,department under this ,act1 including the amount of losses sustained by the ,government as a result of such operations during the preceding fiscal year1 together with an estimate of the total losses that the ,government can reasonably expect to incur as a result of such operations during the current fiscal year4 7b7 ,contents ,in the annual report submitted pursuant to subsection 7a71 the ,secretary shall include full and detailed accounts relative to the following matters3 7#a7 ,the plans of the ,department to insure the provision of ownership investment company financing and licensing to all areas of the country and to all covered business concerns1 including steps taken to accomplish the same4 7#b7 ,the plans of the ,department to support ,states that seek to increase the number of licensees in the ,state4 7#c7 ,steps taken by the ,department to maximize recoupment of ,government funds incident to the inauguration and administration of the ownership investment company program and to insure compliance with statutory and regulatory standards relating to the ownership investment company program4 7#d7 ,recommendations to the ,department of the ,treasury with respect to additional tax incentives to improve and facilitate the operations of ownership investment companies and to encourage the use of the financing facilities of ownership investment companies by covered business concerns4 7#e7 ,a report from the ,securities and ,exchange ,commission enumerating actions undertaken by the ,securities and ,exchange ,commission to-- 7,a7 simplify and minimize the regulatory requirements governing ownership investment companies under the ,federal securities laws2 and 7,b7 eliminate overlapping regulation and jurisdiction as between the ,securities and ,exchange ,commission1 the ,department1 and other agencies of the executive branch4 7#f7 ,actions undertaken by the ,securities and ,exchange ,commission to simplify compliance by ownership investment companies with the requirements of the ,investment ,company ,act of #aidj and to facilitate the election to be taxed as regulated investment companies pursuant to section #hea of the ,internal ,revenue ,code of #aied4 7#g7 ,the number of ownership investment companies the ,department licensed 7including ,protg ,o,i,cs71 the number of licensees that have been placed in liquidation1 and the number of licensees that have surrendered their licenses during the year ending on the date the report is submitted1 identifying the amount of leverage each received during that period4 7#h7 ,the amount of leverage that ownership investment companies 7including ,protg ,o,i,cs7 received during the year ending on the date the report is submitted4 7#i7 ,the sizes1 geographic locations1 and other characteristics of licensed ownership investment companies 7including ,protg ,o,i,cs71 including the extent to which the ownership investment companies have used the leverage to make debt1 synthetic equity1 preferred equity1 or equity investments1 or a combination thereof1 to covered business concerns4 7#aj7 ,the geographic dispersion of licensees in each ,state compared to the population of the ,state4 7#aa7 ,a summary of employee stock ownership plans created by an ownership investment company 7including ,protg ,o,i,cs71 including-- 7,a7 the total number of active plan participants2 7,b7 the total number of employees of the covered business concerns with such employee stock ownership plans2 7,c7 the total value of employer securities1 as determined by the independent appraisers hired by the independent trustee of each employee stock ownership plan2 7,d7 the total plan assets2 7,e7 the total contributions during the plan year2 7,f7 the total distributions during the plan year2 7,g7 the median account asset balance2 and 7,h7 demographic information of plan participants1 disaggregated by race1 gender1 and ,state1 to the extent available4 7#ab7 ,a summary of eligible worker-owned cooperatives created by ownership investment companies 7including ,protg ,o,i,cs71 including-- 7,a7 the number of member-owners2 7,b7 the total number of employees of the covered business concern with such eligible worker-owned cooperatives2 7,c7 the total value of employer securities2 7,d7 the assets of all membership accounts2 7,e7 the median membership account balance2 and 7,f7 demographic information of membership base1 disaggregated by race1 gender1 and ,state1 to the extent available4 #ac4 ,revocation and suspension of licenses2 cease and desist orders 7a7 ,in general ,a license may be revoked or suspended by the ,secretary-- 7#a7 for any false statement knowingly made in any written statement required under this ,act1 or under any regulation issued under this ,act by the ,secretary2 7#b7 if any written statement required under this ,act1 or under any regulation issued under this ,act by the ,secretary1 fails to state a material fact necessary in order to make the statement not misleading in the light of the circumstances under which the statement was made2 7#c7 for willful or repeated violation1 or willful or repeated failure to observe1 any provision of this ,act2 7#d7 for willful or repeated violation of1 or willful or repeated failure to observe1 any rule or regulation issued under this ,act by the ,secretary2 or 7#e7 for violation of1 or failure to observe1 any cease and desist order issued by the ,secretary under this section4 7b7 ,order ,to cease and desist 7#a7 ,issuance ,where a licensee or any other person has not complied with any provision of this ,act1 or of any regulation issued under this ,act by the ,secretary1 or is engaging or is about to engage in any acts or practices that constitute or will constitute a violation of such ,act or regulation1 the ,secretary may order such licensee or other person to cease and desist from such action or failure to act4 7#b7 ,actions required ,the ,secretary may order such licensee or other person to take such action or to refrain from such action as the ,secretary deems necessary to insure compliance with the ,act and the regulations implementing this ,act4 7#c7 ,suspension of licenses ,the ,secretary may also suspend the license of a licensee against whom an order has been issued until such licensee complies with an order issued under this subsection4 7c7 ,orders ,to show cause 7#a7 ,issuance ,before revoking or suspending a license pursuant to subsection 7a7 or issuing a cease and desist order pursuant to subsection 7b71 the ,secretary shall serve upon the licensee and any other person involved an order to show cause why an order revoking or suspending the license or a cease and desist order should not be issued4 7#b7 ,contents ,any order to show cause issued under paragraph 7#a7 shall-- 7,a7 contain a statement of the matters of fact and law asserted by the ,department and the legal authority and jurisdiction under which a hearing is to be held2 and 7,b7 set forth that a hearing will be held before the ,department at a time and place stated in the order4 7#c7 ,statement of findings ,if after hearing1 or a waiver thereof1 the ,secretary determines on the record that an order revoking or suspending the license or a cease and desist order should issue1 the ,secretary shall-- 7,a7 promptly issue such order1 which shall include a statement of the findings of the ,secretary and the grounds and reasons therefor and specify the effective date of the order2 and 7,b7 cause the order to be served on the licensee and any other person involved4 7d7 ,witnesses 7#a7 ,subpoena authority ,the ,secretary may require by subpoena the attendance and testimony of witnesses and the production of all books1 papers1 and documents relating to the hearing from any place in the ,united ,states4 7#b7 ,payment ,any witness summoned before the ,department shall be paid by the party at whose instance the witness was called the same fees and mileage that are paid witnesses in the courts of the ,united ,states4 7#c7 ,aid of the court ,in case of disobedience to a subpoena1 the ,secretary1 or any party to a proceeding before the ,department1 may invoke the aid of any court of the ,united ,states in requiring the attendance and testimony of witnesses and the production of books1 papers1 and documents4 7e7 ,appeals 7#a7 ,filing 7,a7 ,in general ,an order issued by the ,secretary under this section shall be final and conclusive unless within #cj days after the service thereof the licensee1 or other person against whom an order is issued1 appeals to the ,united ,states court of appeals for the circuit in which such licensee has its principal place of business by filing with the clerk of such court a petition praying that the ,department's order be set aside or modified in the manner stated in the petition4 7,b7 ,leave required ,after the expiration of the #cj-;day period described in subparagraph 7,a71 a petition may be filed only by leave of court on a showing of reasonable grounds for failure to file the petition theretofore4 7#b7 ,delivery ,the clerk of the court shall immediately cause a copy of the petition described in paragraph 7#a7 to be delivered to the ,secretary1 and1 upon receipt1 the ,secretary shall certify and file in the court a transcript of the record upon which the order complained of was entered4 7#c7 ,amending petition ,if1 before the record is filed under paragraph 7#b71 the ,secretary amends or sets aside its order1 in whole or in part1 the petitioner may amend the petition within such time as the court may determine1 on notice to the ,secretary4 7#d7 ,operation of order ,the filing of a petition for review under this subsection shall not of itself stay or suspend the operation of the order of the ,department1 but the court of appeals in its discretion may restrain or suspend1 in whole or in part1 the operation of the order pending the final hearing and determination of the petition4 7#e7 ,disposition 7,a7 ,in general ,the court may affirm1 modify1 or set aside the order of the ,secretary under this section4 7,b7 ,evidence ,if the court determines that the just and proper disposition of the case requires the taking of additional evidence1 the court shall order the ,secretary to reopen the hearing for the taking of such evidence1 in such manner and upon such terms and conditions as the court may deem proper4 7,c7 ,findings of fact ,the ,secretary-- 7i7 may modify the findings as to the facts of the ,department1 or make new findings1 by reason of the additional evidence so taken2 and 7ii7 shall file modified or new findings and the amendments1 if any1 of the order1 with the record of such additional evidence4 7,d7 ,objections ,no objection to an order of the ,secretary shall be considered by the court unless such objection was urged before the ,department or1 if it was not so urged1 unless there were reasonable grounds for failure to do so4 7,e7 ,review ,the judgment and decree of the court affirming1 modifying1 or setting aside any such order of the ,secretary shall be subject only to review by the ,supreme ,court of the ,united ,states upon certification or certiorari as provided in section #abed of title #bh1 ,united ,states ,code4 7f7 ,enforcement 7#a7 ,failure to obey ,if any licensee or other person against which or against whom an order is issued under this section fails to obey the order1 the ,secretary-- 7,a7 may apply to the ,united ,states court of appeals1 within the circuit where the licensee has its principal place of business1 for the enforcement of the order2 and 7,b7 shall file a transcript of the record upon which the order complained of was entered4 7#b7 ,notice ,upon the filing of the application under paragraph 7#a71 the court shall cause notice thereof to be served on the licensee or other person4 7#c7 ,evidence ,the evidence to be considered1 the procedure to be followed1 and the jurisdiction of the court shall be the same as is provided in subsection 7e7 for applications to set aside or modify orders4 #ad4 ,examinations and investigations 7a7 ,investigations 7#a7 ,in general ,the ,secretary may make such investigations as the ,secretary deems necessary to determine whether a licensee or any other person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this ,act1 or of any rule or regulation under this ,act1 or of any order issued under this ,act4 7#b7 ,statements ,the ,secretary shall permit any person to file with it a statement in writing1 under oath or otherwise as the ,secretary shall determine1 as to all the facts and circumstances concerning the matter to be investigated4 7#c7 ,oaths and affirmations ,for the purpose of any investigation under this subsection1 the ,secretary is empowered to-- 7,a7 administer oaths and affirmations2 7,b7 subpoena witnesses2 7,c7 compel the attendance of witnesses2 7,d7 take evidence2 and 7,e7 require the production of any books1 papers1 and documents that are relevant to the inquiry4 7#d7 ,attendance and production 7,a7 ,in general ,attendance of witnesses and the production of any such records under this section may be required from any place in the ,united ,states4 7,b7 ,failure to obey ,in case of contumacy by1 or refusal to obey a subpoena issued to1 any person1 including a licensee1 the ,secretary may invoke the aid of any court of the ,united ,states within the jurisdiction of which such investigation or proceeding is carried on1 or where such person resides or carries on business1 in requiring the attendance and testimony of witnesses and the production of books1 papers1 and documents1 and such court may issue an order requiring such person to appear before the ,department1 thereto produce records1 if so ordered1 or to give testimony touching the matter under investigation4 7,c7 ,enforcement ,any failure to obey such order of the court may be punished by such court as a contempt thereof4 7,d7 ,service of process ,all process in any such case may be served in the judicial district whereof such person is an inhabitant or wherever he may be found4 7b7 ,examinations 7#a7 ,in general ,each licensee shall be subject to examinations made by direction of the ,department1 which may be conducted with the assistance of a private sector entity that has both the qualifications to conduct and expertise in conducting such examinations1 and the cost of such examinations1 including the compensation of the examiners1 may1 in the discretion of the ,department1 be assessed against the licensee examined and when so assessed shall be paid by the licensee4 7#b7 ,fees ,fees collected under this subsection shall be deposited in the account for salaries and expenses of the ,department1 and are authorized to be appropriated solely to cover the costs of examinations and other oversight activities under this ,act4 7#c7 ,reports ,every licensee shall make such reports to the ,secretary at such times and in such form as the ,secretary may require1 except that the ,secretary is authorized to exempt from making such reports any such licensee that is registered under the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq47 to the extent necessary to avoid duplication in reporting requirements4 7#d7 ,required information 7,a7 ,in general ,except as provided in subparagraph 7,b71 each licensee shall be examined not less frequently than once every #b years in such detail so as to determine whether or not-- 7i7 the licensee has engaged solely in lawful activities and those contemplated by this ,act2 7ii7 the licensee has engaged in prohibited conflicts of interest under section #af2 7iii7 the licensee has acquired or exercised illegal control of a covered business concern2 7iv7 the licensee has made investments in covered businesses for not less than #a year2 7v7 the licensee has adhered to portfolio diversification limits as stated under section #i2 7vi7 the licensee has engaged in relending1 foreign investments1 or passive investments2 7vii7 the licensee has charged an interest rate in excess of the maximum permitted by law2 or 7viii7 the licensee has adhered to the requirements to make covered investments4 7,b7 ,waiver ,the ,secretary may waive any examination required under subparagraph 7,a7-- 7i7 for not more than #a year if1 in the discretion of the ,secretary1 the ,secretary determines such a delay would be appropriate1 based on the amount of debentures being issued by the licensee and the repayment record of the licensee1 the prior operating experience of the licensee1 the contents and results of the last examination and the management expertise of the licensee2 or 7ii7 if it is the examination of a licensee whose operations have been suspended while the licensee is involved in litigation or is in receivership4 7c7 ,valuations 7#a7 ,frequency of valuations 7,a7 ,in general ,each licensee shall submit to the ,secretary a written valuation of the loans and investments of the licensee not less often than semiannually or otherwise upon the request of the ,secretary1 except that any licensee with no leverage outstanding shall submit such valuations annually1 unless the ,secretary determines otherwise4 7,b7 ,material adverse changes ,not later than #cj days after the end of a fiscal quarter of a licensee during which a material adverse change in the aggregate valuation of the loans and investments or operations of the licensee occurs1 the licensee shall notify the ,secretary in writing of the nature and extent of that change4 7,c7 ,independent certification 7i7 ,in general ,not less frequently than once during each fiscal year1 each licensee shall submit to the ,secretary the financial statements of the licensee1 audited by an independent certified public accountant approved by the ,secretary4 7ii7 ,audit requirements ,each audit conducted under clause 7i7 shall include-- 7,i7 a review of the procedures and documentation used by the licensee in preparing the valuations required by this section2 and 7,,ii7 a statement by the independent certified public accountant that such valuations were prepared in conformity with the valuation criteria applicable to the licensee established in accordance with paragraph 7#b74 7#b7 ,valuation criteria ,each valuation submitted under this subsection shall be prepared by the licensee in accordance with valuation criteria1 which shall-- 7,a7 be established or approved by the ,secretary2 and 7,b7 include appropriate safeguards to ensure that the noncash assets of a licensee are not overvalued4 #ae4 ,injunctions and other orders 7a7 ,in general ,whenever1 in the judgment of the ,secretary1 a licensee or any other person has engaged or is about to engage in any acts or practices which constitute or will constitute a violation of any provision of this ,act1 or of any rule or regulation under this ,act1 or of any order issued under this ,act1 the ,secretary may make application to the proper district court of the ,united ,states or a ,united ,states court of any place subject to the jurisdiction of the ,united ,states for an order enjoining such acts or practices1 or for an order enforcing compliance with such provision1 rule1 regulation1 or order1 and such courts shall have jurisdiction of such actions and1 upon a showing by the ,secretary that such licensee or other person has engaged or is about to engage in any such acts or practices1 a permanent or temporary injunction shall be granted without bond4 7b7 ,exclusive jurisdiction ,in any proceeding under subsection 7a71 the court as a court of equity-- 7#a7 may1 to such extent as the court deems necessary1 take exclusive jurisdiction of the licensee or licensees and the assets thereof1 wherever located2 and 7#b7 shall have jurisdiction in any such proceeding to appoint a trustee or receiver to hold or administer under the direction of the court the assets so possessed4 7c7 ,trustee and receivership 7#a7 ,authority ,the ,secretary shall have authority to act as trustee or receiver of the licensee4 7#b7 ,appointment ,upon request by the ,secretary1 the court may appoint the ,secretary to act in such capacity unless the court deems such appointment inequitable or otherwise inappropriate by reason of the special circumstances involved4 #af4 ,conflicts of interest 7a7 ,in general ,for the purpose of controlling conflicts of interest that may be detrimental to covered business concerns1 to licensees1 to the shareholders1 partners1 or members of either1 or to the purposes of this ,act1 the ,secretary shall adopt regulations to govern transactions with any officer1 director1 shareholder1 partner1 or member of any licensee1 or with any person or concern1 in which any interest1 direct or indirect1 financial or otherwise1 is held by any officer1 director1 shareholder1 partner1 or member of any licensee1 or any person or concern with an interest1 direct or indirect1 financial or otherwise1 in any licensee4 7b7 ,public disclosure ,regulations adopted under subsection 7a7 shall include appropriate requirements for public disclosure necessary to the purposes of this section4 7c7 ,consultation with existing regulations ,in making any initial determination relating to a regulation adopted under subsection 7a71 the ,secretary shall consult the regulations promulgated by the ,administrator of the ,small ,business ,administration on financing which constitute conflicts of interest in accordance with section #cab of the ,small ,business ,investment ,act of #aieh 7#ae ,u4,s4,c4 #fhg;d74 7d7 ,regulations ,the ,secretary shall promulgate regulations under this section in accordance with the implementation milestones as set forth in section #c7l7 of this ,act4 #ag4 ,removal or suspension of management officials 7a7 ,definition of management official ,in this section1 the term management official means an officer1 director1 general partner1 manager1 employee1 agent1 or other participant in the management or conduct of the affairs of a licensee4 7b7 ,removal of management officials 7#a7 ,notice of removal ,the ,secretary may serve upon any management official a written notice of its intention to remove that management official whenever1 in the opinion of the ,secretary-- 7,a7 such management official-- 7i7 has willfully and knowingly committed any substantial violation of-- 7,i7 this ,act2 7,,ii7 any regulation issued under this ,act2 or 7,,iii7 a cease-and-desist order which has become final2 or 7ii7 has willfully and knowingly committed or engaged in any act1 omission1 or practice which constitutes a substantial breach of a fiduciary duty of that person as a management official2 and 7,b7 the violation or breach of fiduciary duty is one involving personal dishonesty on the part of such management official4 7#b7 ,contents of notice ,a notice of intention to remove a management official1 as provided in paragraph 7#a71 shall contain a statement of the facts constituting grounds therefor1 and shall fix a time and place at which a hearing will be held thereon4 7#c7 ,hearings 7,a7 ,timing ,a hearing described in paragraph 7#b7 shall be fixed for a date not earlier than #cj days nor later than #fj days after the date of service of notice of the hearing1 unless an earlier or a later date is set by the ,secretary at the request of-- 7i7 the management official1 and for good cause shown2 or 7ii7 the ,attorney ,general of the ,united ,states4 7,b7 ,consent ,unless the management official shall appear at a hearing described in this paragraph in person or by a duly authorized representative1 that management official shall be deemed to have consented to the issuance of an order of removal under paragraph 7#d77;,a74 7#d7 ,issuance of order of removal 7,a7 ,in general ,in the event of consent under paragraph 7#c77;,b71 or if upon the record made at a hearing described in this subsection1 the ,secretary finds that any of the grounds specified in the notice of removal has been established1 the ,secretary may issue such orders of removal from office as the ,secretary deems appropriate4 7,b7 ,effectiveness ,an order under subparagraph 7,a7 shall-- 7i7 become effective at the expiration of #cj days after the date of service upon the subject licensee and the management official concerned 7except in the case of an order issued upon consent as described in paragraph 7#c77;,b71 which shall become effective at the time specified in such order72 and 7ii7 remain effective and enforceable1 except to such extent as it is stayed1 modified1 terminated1 or set aside by action of the ,secretary or a reviewing court in accordance with this section4 7c7 ,authority ,to suspend or prohibit participation 7#a7 ,in general ,the ,secretary may1 if the ,secretary deems it necessary for the protection of the licensee or the interests of the ,department1 suspend from office or prohibit from further participation in any manner in the management or conduct of the affairs of the licensee1 or both1 any management official referred to in subsection 7b77#a71 by written notice to such effect served upon the management official4 7#b7 ,effectiveness ,a suspension or prohibition under paragraph 7#a7-- 7,a7 shall become effective upon service of notice under paragraph 7#a72 and 7,b7 unless stayed by a court in proceedings authorized by paragraph 7#c71 shall remain in effect-- 7i7 pending the completion of the administrative proceedings pursuant to a notice of intention to remove served under subsection 7b72 and 7ii7 until such time as the ,secretary shall dismiss the charges specified in the notice1 or1 if an order of removal or prohibition is issued against the management official1 until the effective date of any such order4 7#c7 ,judicial review ,not later than #aj days after any management official has been suspended from office or prohibited from participation in the management or conduct of the affairs of a licensee1 or both1 under paragraph 7#a71 that management official may apply to the ,united ,states ,district ,court for the judicial district in which the home office of the licensee is located1 or the ,united ,states ,district ,court for the ,district of ,columbia1 for a stay of the suspension or prohibition pending the completion of the administrative proceedings pursuant to a notice of intent to remove served upon the management official under subsection 7b71 and such court shall have jurisdiction to stay such action4 7d7 ,authority ,to suspend on criminal charges 7#a7 ,in general ,whenever a management official is charged in any information1 indictment1 or complaint authorized by a ,united ,states attorney1 with the commission of or participation in a felony involving dishonesty or breach of trust1 the ,secretary may1 by written notice served upon that management official1 suspend that management official from office or prohibit that management official from further participation in any manner in the management or conduct of the affairs of the licensee1 or both4 7#b7 ,effectiveness ,a suspension or prohibition under paragraph 7#a7 shall remain in effect until the subject information1 indictment1 or complaint is finally disposed of1 or until terminated by the ,secretary4 7#c7 ,authority upon conviction ,if a judgment of conviction with respect to an offense described in paragraph 7#a7 is entered against a management official1 then at such time as the judgment is not subject to further appellate review1 the ,secretary may issue and serve upon the management official an order removing that management official1 which removal shall become effective upon service of a copy of the order upon the licensee4 7#d7 ,authority upon dismissal or other disposition ,a finding of not guilty or other disposition of charges described in paragraph 7#a7 shall not preclude the ,secretary from thereafter instituting proceedings to suspend or remove the management official from office1 or to prohibit the management official from participation in the management or conduct of the affairs of the licensee1 or both1 pursuant to subsection 7b7 or 7c74 7e7 ,notification to licensees ,copies of each notice required to be served on a management official under this section shall also be served upon the interested licensee4 7f7 ,procedural provisions2 judicial review 7#a7 ,hearing venue ,any hearing provided for in this section shall be-- 7,a7 held in the ,federal judicial district or in the territory in which the principal office of the licensee is located1 unless the party afforded the hearing consents to another place2 and 7,b7 conducted in accordance with the provisions of chapter #e of title #e1 ,united ,states ,code4 7#b7 ,issuance of orders ,after a hearing provided for in this section1 and not later than #ij days after the ,secretary has notified the parties that the case has been submitted for final decision1 the ,secretary shall render a decision in the matter 7which shall include findings of fact upon which its decision is predicated71 and shall issue and cause to be served upon each party to the proceeding an order or orders consistent with the provisions of this section4 7#c7 ,authority to modify orders ,the ,secretary may modify1 terminate1 or set aside any order issued under this section-- 7,a7 at any time1 upon such notice1 and in such manner as the ,secretary deems proper1 unless a petition for review is timely filed in a court of appeals of the ,united ,states1 as provided in paragraph 7#d77;,b71 and thereafter until the record in the proceeding has been filed in accordance with paragraph 7#d77;,c72 and 7,b7 upon such filing of the record1 with permission of the court4 7#d7 ,judicial review 7,a7 ,in general ,judicial review of an order issued under this section shall be exclusively as provided in this paragraph4 7,b7 ,petition for review ,any party to a hearing provided for in this section may obtain a review of any order issued pursuant to paragraph 7#b7 7other than an order issued with the consent of the management official concerned1 or an order issued under subsection 7d771 by filing in the court of appeals of the ,united ,states for the circuit in which the principal office of the licensee is located1 or in the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit1 not later than #cj days after the date of service of such order1 a written petition praying that the order of the ,secretary be modified1 terminated1 or set aside4 7,c7 ,notification to ,department ,a copy of a petition filed under subparagraph 7,b7 shall be forthwith transmitted by the clerk of the court to the ,secretary1 and thereupon the ,secretary shall file in the court the record in the proceeding1 as provided in section #baab of title #bh1 ,united ,states ,code4 7,d7 ,court jurisdiction ,upon the filing of a petition under subparagraph 7,a7-- 7i7 the court shall have jurisdiction1 which1 upon the filing of the record under subparagraph 7,c71 shall be exclusive1 to affirm1 modify1 terminate1 or set aside1 in whole or in part1 the order of the ,secretary2 7ii7 review of such proceedings shall be had as provided in chapter #g of title #e1 ,united ,states ,code2 and 7iii7 the judgment and decree of the court shall be final1 except that the judgment and decree shall be subject to review by the ,supreme ,court of the ,united ,states upon certiorari1 as provided in section #abed of title #bh1 ,united ,states ,code4 7,e7 ,judicial review not a stay ,the commencement of proceedings for judicial review under this paragraph shall not1 unless specifically ordered by the court1 operate as a stay of any order issued by the ,secretary under this section4 #ah4 ,unlawful acts and omissions by officers1 directors1 employees1 or agents2 breach of fiduciary duty 7a7 ,in general ,wherever a licensee violates any provision of this ,act or regulation issued thereunder by reason of the failure of the licensee to comply with the terms thereof or by reason of the licensee engaging in any act or practice which constitutes or will constitute a violation thereof1 such violation shall be deemed to be also a violation and an unlawful act on the part of any person who1 directly or indirectly1 authorizes1 orders1 participates in1 or causes1 brings about1 counsels1 aids1 or abets in the commission of any acts1 practices1 or transactions which constitute or will constitute1 in whole or in part1 such violation4 7b7 ,unlawful acts 7#a7 ,prohibition ,it shall be unlawful for any officer1 director1 employee1 agent1 or other participant in the management or conduct of the affairs of a licensee to engage in any act or practice1 or to omit any act1 in breach of his fiduciary duty as such officer1 director1 employee1 agent1 or participant1 if1 as a result thereof1 the licensee has suffered or is in imminent danger of suffering financial loss or other damage4 7#b7 ,specific acts and omissions ,except with the written consent of the ,secretary1 it shall be unlawful-- 7,a7 for any person hereafter to take office as an officer1 director1 or employee of a licensee1 or to become an agent or participant in the conduct of the affairs or management of a licensee1 if-- 7i7 the person has been convicted of a felony1 or any other criminal offense involving dishonesty or breach of trust2 or 7ii7 the person has been found civilly liable in damages1 or has been permanently or temporarily enjoined by an order1 judgment1 or decree of a court of competent jurisdiction1 by reason of any act or practice involving fraud or breach of trust2 or 7,b7 for any person to continue to serve in any of the above described capacities1 if-- 7i7 the person is hereafter convicted of a felony1 or any other criminal offense involving dishonesty or breach of trust2 or 7ii7 the person is hereafter found civilly liable in damages or is permanently or temporarily enjoined by an order1 judgment1 or decree of a court of competent jurisdiction1 by reason of any act or practice involving fraud or breach of trust4 #ai4 ,penalties and forfeitures 7a7 ,penalties 7#a7 ,in general ,except as provided in subsection 7b71 a licensee that violates any regulation or written directive issued by the ,secretary issued under this ,act1 requiring the filing of any regular or special report pursuant to section #ab1 shall forfeit and pay to the ,united ,states a civil penalty of not more than #ajj for each day of the continuance of the failure by the licensee to file such report1 unless it is shown that such failure is due to reasonable cause and not due to willful neglect4 7#b7 ,accrual ,any civil penalty under paragraph 7#a7 shall accrue to the ,united ,states and may be recovered in a civil action brought by the ,secretary4 7b7 ,enforcement ,the ,secretary may-- 7#a7 by rules and regulations1 or upon application of an interested party1 at any time previous to such failure1 by order1 after notice and opportunity for hearing1 exempt in whole or in part1 any licensee from the provisions of subsection 7a7 of this section1 upon such terms and conditions and for such period of time as the ,secretary deems necessary and appropriate1 if the ,secretary funds that such action is not inconsistent with the public interest or the protection of the ,department2 and 7#b7 for the purposes of this section make any alternative requirements appropriate to the situation4 #bj4 ,jurisdiction and service of process ,any suit or action brought under section #ac1 #ae1 #ag1 #ai1 or #bc by the ,department at law or in equity to enforce any liability or duty created by1 or to enjoin any violation of this ,act1 or any rule1 regulation1 or order promulgated thereunder1 shall be brought in the district wherein the licensee maintains its principal office1 and process in such cases may be served in any district in which the defendant maintains its principal office or transacts business1 or wherever the defendant may be found4 #ba4 ,issuance and guarantee of trust certificates 7a7 ,authority ,to issue trust certificates ,the ,secretary may issue trust certificates representing ownership of all or a fractional part of debentures issued by licensees and guaranteed by the ,department under this ,act1 provided that the trust certificates shall be based on and backed by a trust or pool approved by the ,secretary and composed solely of guaranteed debentures4 7b7 ,guarantee authority 7#a7 ,in general ,the ,secretary may1 upon such terms and conditions as are deemed appropriate1 to guarantee the timely payment of the principal of and interest on trust certificates issued by the ,department or its agent for purposes of this section4 7#b7 ,limitation ,such guarantee shall be limited to the extent of principal and interest on the guaranteed debentures which compose the trust or pool4 7#c7 ,reduction of guarantee ,in the event that a debenture in such trust or pool is prepaid1 either voluntarily or involuntarily1 or in the event of default of a debenture1 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 and priority payments represent in the trust or pool4 7#d7 ,interest ,interest on prepaid or defaulted debentures shall accrue and be guaranteed by the ,department only through the date of payment on the guarantee4 7#e7 ,redemption ,during the term of the trust certificate1 it may be called for redemption due to prepayment or default of all debentures4 7c7 ,full faith and credit ,the full faith and credit of the ,united ,states is pledged to the payment of all amounts that may be required to be paid under any guarantee of such trust certificates issued by the ,secretary pursuant to this section4 7d7 ,fees ,the ,secretary may not collect a fee for any guarantee under this section1 provided that nothing herein shall preclude any agent of the ,department from collecting a fee approved by the ,department for the functions described in subsection 7f77#b74 7e7 ,rights of the ,department 7#a7 ,subrogation ,in the event the ,secretary pays a claim under a guarantee issued under this section1 it shall be subrogated fully to the rights satisfied by such payment4 7#b7 ,ownership rights ,no ,state or local law1 and no ,federal law1 shall preclude or limit the exercise by the ,secretary of the ownership rights of the ,secretary in the debentures residing in a trust or pool against which trust certificates are issued4 7f7 ,responsibilities 7#a7 ,registration ,the ,secretary shall provide for a central registration of all trust certificates sold pursuant to this section4 7#b7 ,contracts ,the ,secretary shall contract with an agent or agents to carry out1 on behalf of the ,department1 the pooling and the central registration functions of this section including1 notwithstanding any other provision of law1 maintenance on behalf of and under the direction of the ,department1 such commercial bank accounts or investments in obligations of the ,united ,states as may be necessary to facilitate trusts or pools backed by guaranteed under this ,act1 and the issuance of trust certificates to facilitate such poolings4 ,such agent or agents shall provide a fidelity bond or insurance in such amounts as the ,secretary determines to be necessary to fully protect the interests of the ,government4 7#c7 ,disclosures ,before any sale of a trust certificate1 the ,secretary shall require the seller to disclose to a purchaser of a trust certificate issued pursuant to this section1 information on the terms1 conditions1 and yield of such instrument4 7#d7 ,regulation of brokers and dealers ,the ,secretary is authorized to regulate brokers and dealers in trust certificates sold pursuant to this section4 7#e7 ,rule of construction ,nothing in this subsection shall prohibit the use of a bookentry or other electronic form of registration for trust certificates4 #bb4 ,periodic issuance of guarantees and trust certificates ,the ,secretary shall issue guarantees under section #g and trust certificates under section #ba at periodic intervals of not less than every #ab months and shall do so at such shorter intervals as the ,secretary deems appropriate1 taking into consideration the amount and number of such guarantees or trust certificates4 #bc4 ,miscellaneous 7a7 ,cooperation with banks1 investors1 and lenders ,whenever practicable1 the operations of an ownership investment company1 including the generation of business1 may be undertaken in cooperation with banks or other investors or lenders1 incorporated or unincorporated1 and any servicing or initial investigation required for loans or acquisitions of securities by the company under the provisions of this ,act may be handled through such banks or other investors or lenders on a fee basis4 ,any ownership investment company may receive fees for services rendered to such banks and other investors and lenders4 7b7 ,regulations ,the ,secretary is authorized to prescribe regulations governing the operations of ownership investment companies1 and to carry out the provisions of this ,act1 in accordance with the purposes of this ,act4 7c7 ,dissolution or forfeiture of rights ,should any ownership investment company violate or fail to comply with any of the provisions of this ,act or of regulations prescribed hereunder1 all of the rights1 privileges1 and franchises derived therefrom may thereby be forfeited4 ,before any such ownership investment company shall be declared dissolved1 or its rights1 privileges1 and franchises forfeited1 any noncompliance with or violation of this ,act shall be determined and adjudged by a court of the ,united ,states of competent jurisdiction in a suit brought for that purpose in the district1 territory1 or other place subject to the jurisdiction of the ,united ,states1 in which the principal office of the ownership investment company is located4 ,any such suit shall be brought by the ,united ,states at the instance of the ,secretary or the ,attorney ,general4 7d7 ,liability ,except as expressly provided otherwise in this ,act1 nothing in this ,act or in any other provision of law shall be deemed to impose any liability on the ,united ,states with respect to any obligations entered into1 or stocks issued1 or commitments made1 by any company operating under the provisions of this ,act4