To amend the Small Business Investment Act of 1958 and the Small Business Act to include small business investment companies in the Small Business Innovation Research Program and the Small Business Technology Transfer Program, and for other purposes.

To amend the Small Business Investment Act of 1958 and the Small Business Act to include small business investment companies in the Small Business Innovation Research Program and the Small Business Technology Transfer Program, and for other purposes. 1. Calculation of leverage of small business investment companies that invest in SBIR or STTR participants Section 303(b)(2) of the Small Business Investment Act of 1958 ( 15 U.S.C. 683(b)(2) (E) Investments in SBIR and STTR participants (i) In general Subject to clause (ii), in calculating the outstanding leverage of a company for purposes of subparagraph (A), the Administrator shall exclude the amount of any investment made in an SBIR or STTR participant, if such investment is made in the first fiscal year after the date of enactment of this subparagraph or any fiscal year thereafter by a company licensed in the applicable fiscal year. (ii) Limitations (I) Amount of exclusion The amount excluded under clause (i) for a company shall not exceed 33 percent of the private capital of that company. (II) Maximum investment A company shall not make an investment in any one SBIR or STTR participant in an amount equal to more than 20 percent of the private capital of that company. (III) Other terms The exclusion of amounts under clause (i) shall be subject to such terms as the Administrator may impose to ensure that there is no cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990 ( 2 U.S.C. 661a (iii) Definitions In this subsection, the term SBIR or STTR participant . 2. Inclusion of small business investment companies in SBIR and STTR Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) by striking or private equity firm investment private equity firm, or SBIC investment (2) by striking or private equity firms private equity firms, or SBICs (3) in subsection (e)— (A) in paragraph (12)(B), by striking and (B) in paragraph (13)(B), by striking the period at the end and inserting ; and (C) by adding at the end the following new paragraph: (14) the term SBIC ; and (4) in the heading for subsection (dd), by striking or Private Equity Firms Private Equity Firms, or SBICs

Summary: This bill amends the Small Business Investment Act of 1958 to require the Small Business Administration (SBA), when calculating the outstanding leverage of a small business investment company (SBIC), to exclude investments made in Small Business Innovation Research (SBIR) participants and Small Business Technology Transfer (STTR) participants. (SBICs are subject to a limit on their outstanding leverage. SBIR and STTR participants are small business concerns that receive SBA contracts or grants for research and development.) The Small Business Act is amended to include SBICs as a type of investor (along with venture capital, hedge fund, and private equity firms) whose investment must be considered for various purposes under the SBIR and STTR programs.