In the Senate of the United States,

March 22, 1999.

Resolved, That the bill from the House of Representatives (H.R. 68) entitled ‘‘An Act to amend section 20 of the

Small Business Act and make technical corrections in title III

of the Small Business Investment Act.’’, do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Small Business Invest3 ment Improvement Act of 1999’’.

4 SEC. 2. SBIC PROGRAM.

5 (a) IN GENERAL.—Section 308(i)(2) of the Small

6 Business Investment Act of 1958 (15 U.S.C. 687(i)(2)) is

7 amended by adding at the end the following: ‘‘In this para8 graph, the term ‘interest’ includes only the maximum man9 datory sum, expressed in dollars or as a percentage rate,

10 that is payable with respect to the business loan amount
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1 received by the small business concern, and does not include

2 the value, if any, of contingent obligations, including war3 rants, royalty, or conversion rights, granting the small busi4 ness investment company an ownership interest in the eq5 uity or increased future revenue of the small business con6 cern receiving the business loan.’’.

7 (b) FUNDING LEVELS.—Section 20 of the Small Busi8 ness Act (15 U.S.C. 631 note) is amended—

9 (1) in subsection (d)(1)(C)(i), by striking

10 ‘‘$800,000,000’’ and inserting ‘‘$1,200,000,000’’; and

11 (2) in subsection (e)(1)(C)(i), by striking

12 ‘‘$900,000,000’’ and inserting ‘‘$1,500,000,000’’.

13 (c) DEFINITIONS.—

14 (1) SMALL BUSINESS CONCERN.—Section 103(5)

15 of the Small Business Investment Act of 1958 (15

16 U.S.C. 662(5)) is amended—

17 (A) by redesignating subparagraphs (A)

18 through (C) as clauses (i) through (iii), and in19 denting appropriately;

20 (B) in clause (iii), as redesignated, by add21 ing ‘‘and’’ at the end;

22 (C) by striking ‘‘purposes of this Act, an in23 vestment’’ and inserting the following: ‘‘purposes

24 of this Act—

25 ‘‘(A) an investment’’; and
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1 (D) by adding at the end the following:

2 ‘‘(B) in determining whether a business

3 concern satisfies net income standards estab4 lished pursuant to section 3(a)(2) of the Small

5 Business Act, if the business concern is not re6 quired by law to pay Federal income taxes at the

7 enterprise level, but is required to pass income

8 through to the shareholders, partners, bene9 ficiaries, or other equitable owners of the busi10 ness concern, the net income of the business con11 cern shall be determined by allowing a deduction

12 in an amount equal to the sum of—

13 ‘‘(i) if the business concern is not re14 quired by law to pay State (and local, if

15 any) income taxes at the enterprise level,

16 the net income (determined without regard

17 to this subparagraph), multiplied by the

18 marginal State income tax rate (or by the

19 combined State and local income tax rates,

20 as applicable) that would have applied if

21 the business concern were a corporation;

22 and

23 ‘‘(ii) the net income (so determined)

24 less any deduction for State (and local) in25 come taxes calculated under clause (i), mul-
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1 tiplied by the marginal Federal income tax

2 rate that would have applied if the business

3 concern were a corporation;’’.

4 (2) SMALLER ENTERPRISE.—Section

5 103(12)(A)(ii) of the Small Business Investment Act

6 of 1958 (15 U.S.C. 662(12)(A)(ii)) is amended by in7 serting before the semicolon at the end the following:

8 ‘‘except that, for purposes of this clause, if the busi9 ness concern is not required by law to pay Federal

10 income taxes at the enterprise level, but is required to

11 pass income through to the shareholders, partners,

12 beneficiaries, or other equitable owners of the business

13 concern, the net income of the business concern shall

14 be determined by allowing a deduction in an amount

15 equal to the sum of—

16 ‘‘(I) if the business concern is not

17 required by law to pay State (and

18 local, if any) income taxes at the enter19 prise level, the net income (determined

20 without regard to this clause), multi21 plied by the marginal State income tax

22 rate (or by the combined State and

23 local income tax rates, as applicable)

24 that would have applied if the business

25 concern were a corporation; and
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1 ‘‘(II) the net income (so deter2 mined) less any deduction for State

3 (and local) income taxes calculated

4 under subclause (I), multiplied by the

5 marginal Federal income tax rate that

6 would have applied if the business con7 cern were a corporation’’.

8 (d) TECHNICAL CORRECTIONS.—

9 (1) REPEAL.—Section 303(g) of the Small Busi10 ness Investment Act of 1958 (15 U.S.C. 683(g)) is

11 amended by striking paragraph (13).

12 (2) ISSUANCE OF GUARANTEES AND TRUST CER13 TIFICATES.—Section 320 of the Small Business In14 vestment Act of 1958 (15 U.S.C. 687m) is amended

15 by striking ‘‘6’’ and inserting ‘‘12’’.

16 (3) ELIMINATION OF TABLE OF CONTENTS.—Sec17 tion 101 of the Small Business Investment Act of

18 1958 (15 U.S.C. 661 note) is amended to read as fol19 lows:
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1 ‘‘SEC. 101. SHORT TITLE.

2 ‘‘This Act may be cited as the ‘Small Business Invest3 ment Act of 1958’.’’.

Attest:

Secretary.
106TH CONGRESS

1ST SESSION H. R. 68

AMENDMENT