I 

111TH CONGRESS 

1ST SESSION H. R. 4211 

To amend the Internal Revenue Code of 1986 to treat nonrecourse small 

business investment company loans from the Small Business Administration as amounts at risk for purposes of determining the deduction for 

losses. 

IN THE HOUSE OF REPRESENTATIVES 

DECEMBER 3, 2009 

Mr. THOMPSON of California (for himself and Ms. WOOLSEY) introduced the 

following bill; which was referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to treat nonrecourse small business investment company loans from 

the Small Business Administration as amounts at risk 

for purposes of determining the deduction for losses. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. NONRECOURSE SMALL BUSINESS INVESTMENT 

2 COMPANY LOANS FROM THE SMALL BUSI3 NESS ADMINISTRATION TREATED AS 

4 AMOUNTS AT RISK. 

5 (a) IN GENERAL.—Subparagraph (B) of section 

6 465(b)(6) of the Internal Revenue Code of 1986 is amend7 ed to read as follows: 

8 ‘‘(B) QUALIFIED NONRECOURSE FINANC9 ING.—For purposes of this paragraph— 

10 ‘‘(i) IN GENERAL.—The term ‘quali11 fied nonrecourse financing’ means any fi12 nancing— 

13 ‘‘(I) which is qualified real prop14 erty financing or qualified SBIC fi15 nancing, 

16 ‘‘(II) except to the extent pro17 vided in regulations, with respect to 

18 which no person is personally liable 

19 for repayment, and 

20 ‘‘(III) which is not convertible 

21 debt. 

22 ‘‘(ii) QUALIFIED REAL PROPERTY FI23 NANCING.—The term ‘qualified real prop24 erty financing’ means any financing 

25 which— 


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1 ‘‘(I) is borrowed by the taxpayer 

2 with respect to the activity of holding 

3 real property, 

4 ‘‘(II) is secured by real property 

5 used in such activity, and 

6 ‘‘(III) is borrowed by the tax7 payer from a qualified person or rep8 resents a loan from any Federal, 

9 State, or local government or instru10 mentality thereof, or is guaranteed by 

11 any Federal, State, or local govern12 ment. 

13 ‘‘(iii) QUALIFIED SBIC FINANCING.— 

14 The term ‘qualified SBIC financing’ means 

15 any financing which— 

16 ‘‘(I) is borrowed by a small busi17 ness investment company (within the 

18 meaning of section 301 of the Small 

19 Business Investment Act of 1958), 

20 ‘‘(II) is secured by property used 

21 or held, directly or indirectly, by such 

22 small business investment company, 

23 and 

24 ‘‘(III) is borrowed from, or guar25 anteed by, the Small Business AdminVerDate Nov 24 2008 00:45 Dec 04, 2009 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4211.IH H4211

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1 istration under the authority of sec2 tion 303(b) of such Act.’’. 

3 (b) CONFORMING AMENDMENTS.—Subparagraph (A) 

4 of section 465(b)(6) of such Code is amended— 

5 (1) by striking ‘‘in the case of an activity of 

6 holding real property,’’, and 

7 (2) by striking ‘‘which is secured by real prop8 erty used in such activity’’. 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 the date of the enactment of this Act. 

Æ 


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