404 
(f) NON-FEDERAL SHARE.—The non-Federal share of the cost of a trade 
expansion program carried out using a grant under the program shall be 
comprised of not less than 50 percent cash and not more than 50 percent 
of indirect costs and in-kind contributions, except that no such costs or con-
tributions may be derived from funds from any other Federal program. 
Divisions N Through Y—Reserved 
Division Z—Miscellaneous 
Chapter 299—Miscellaneous 
Sec. 
299101.
Management assistance for small business concerns affected by military operations. 
299102.
Business grants and cooperative agreements. 
299103.
Voluntary agreements and programs. 
299104.
Paul D. Coverdell drug-free workplace program. 
299105.
Course on contracting requirements. 
299106.
Mentor-prote´ge´ programs. 
299107.
Subcontracting requirements and limitations. 
§ 299101. Management assistance for small business con-
cerns affected by military operations 
(a) DEFINITION OF PERIOD OF MILITARY CONFLICT.—In this section, 
the term ‘‘period of military conflict’’ means— 
(1) a period of war declared by Congress; 
(2) a period of national emergency declared by Congress or by the 
President; or 
(3) a period of a contingency operation (as defined in section 101(a) 
of title 10). 
(b) ASSISTANCE.—The Administrator shall use, as appropriate, the entre-
preneurial development and management assistance programs of SBA, in-
cluding programs involving State or private sector partners, to provide busi-
ness counseling and training to any small business concern adversely af-
fected by the deployment of units of the Armed Forces of the United States 
in support of a period of military conflict. 
§ 299102. Business grants and cooperative agreements 
(a) IN GENERAL.—The Administrator may make grants to and enter into 
cooperative agreements with a coalition of private or public entities (or com-
bination of private and public entities)— 
(1) to expand business-to-business relationships between small busi-
ness concerns and large business concerns; and 
(2) to provide businesses, directly or indirectly, with online informa-
tion and a database of companies that are interested in mentor-prote´ge´ 
programs or community-based, statewide, or local business development 
programs. 
(b) MATCHING REQUIREMENT.—The Administrator may make a grant to 
a coalition of private entities under subsection (a) only if the coalition pro-
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vides for activities described in paragraph (1) or (2) of subsection (a) in 
an amount (in kind or in cash) equal to the grant amount. 
§ 299103. Voluntary agreements and programs 
(a) CONSULTATION.—The President may consult with representatives of 
small business concerns with a view to encouraging the making by small 
business concerns with the approval of the President of voluntary agree-
ments and programs to further the objectives of this subtitle. 
(b) EXEMPTION FROM CERTAIN LAWS.— 
(1) IN GENERAL.—No act or omission to act pursuant to this sub-
title that occurs while this subtitle is in effect, if requested by the 
President pursuant to a voluntary agreement or program approved 
under subsection (a) and determined by the President to be in the pub-
lic interest as contributing to the national defense, shall be construed 
to be within the prohibitions of the antitrust laws or the Federal Trade 
Commission Act (15 U.S.C. 41 et seq.). 
(2) REQUESTS.—A copy of a request intended to be within the cov-
erage of this section, and any modification or withdrawal of such a re-
quest— 
(A) shall be furnished to the Attorney General and the Chair-
man of the Federal Trade Commission when made; and 
(B) shall be published in the Federal Register unless publication 
of the request would, in the opinion of the President, endanger the 
national security. 
(c) DELEGATION OF AUTHORITY.—The authority granted in subsection 
(b) shall be delegated only— 
(1) to an official who for the purpose of the delegation shall be re-
quired to be appointed by the President by and with the advice and 
consent of the Senate; 
(2) on the condition that the official consult with the Attorney Gen-
eral and the Chairman of the Federal Trade Commission not less than 
10 days before making any request or finding under subsection (b); 
and 
(3) on the condition that the official obtain the approval of the At-
torney General to any request under subsection (b) before making the 
request. 
(d) WITHDRAWAL OF REQUEST OR FINDING BY THE PRESIDENT OR OF 
APPROVAL BY THE ATTORNEY GENERAL.—On withdrawal of any request 
or finding under this section, or on withdrawal by the Attorney General of 
approval of the voluntary agreement or program on which the request or 
finding is based, this section shall not apply to any subsequent act, or omis-
sion to act, by reason of the finding or request. 
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406 
§ 299104. Paul D. Coverdell drug-free workplace program 
(a) DEFINITIONS.—In this section: 
(1) DRUG-FREE WORKPLACE PROGRAM.—The term ‘‘drug-free work-
place program’’ means a program that includes— 
(A) a written policy, including a clear statement of— 
(i) expectations for workplace behavior; 
(ii) prohibitions against reporting to work or working under 
the influence of illegal drugs or alcohol; 
(iii) prohibitions against the use or possession of illegal 
drugs in the workplace; and 
(iv) the consequences of violating those expectations and 
prohibitions; 
(B)(i) drug and alcohol abuse prevention training for a total of 
not less than 2 hours for each employee; and 
(ii) additional voluntary drug and alcohol abuse prevention 
training for employees who are parents; 
(C)(i) testing of employees of a small business concern for ille-
gal drugs, with analysis conducted by a drug testing laboratory 
certified by the Substance Abuse and Mental Health Services Ad-
ministration, or approved by the College of American Pathologists 
for forensic drug testing; and 
(ii) a review of each positive test result by a medical review offi-
cer who is not— 
(I) an employee of that small business concern; or 
(II) an employee or agent of, or any person having a finan-
cial interest in, the laboratory for which the illegal drug test 
results are reviewed; 
(D) employee access to an employee assistance program, includ-
ing confidential assessment, referral, and short-term problem reso-
lution; and 
(E) continuing alcohol and drug abuse prevention education. 
(2) ELIGIBLE
INTERMEDIARY.—The term ‘‘eligible intermediary’’ 
means an organization— 
(A) that has not less than 2 years of experience in carrying out 
drug-free workplace programs; 
(B) that has a drug-free workplace policy in effect; 
(C) that is located in a State, the District of Columbia, or a 
territory of the United States; and 
(D)(i) the purpose of which is— 
(I) to develop comprehensive drug-free workplace programs 
or to supply drug-free workplace services; or 
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(II) to provide other forms of assistance and services to 
small business concerns; or 
(ii) that is eligible to receive a grant under chapter 2 of the Na-
tional Narcotics Leadership Act of 1988 (21 U.S.C. 1521 et seq.). 
(3) EMPLOYEE.—The term ‘‘employee’’ includes— 
(A) an applicant for employment; 
(B) an employee; 
(C) a supervisor; 
(D) a manager; 
(E) an officer of a small business concern who is active in man-
agement of the small business concern; and 
(F) an owner of a small business concern who is active in man-
agement of the small business concern. 
(4) MEDICAL REVIEW OFFICER.—The term ‘‘medical review officer’’ 
means a licensed physician with knowledge of substance abuse dis-
orders. 
(b) ESTABLISHMENT.— 
(1) IN GENERAL.—There is established a drug-free workplace dem-
onstration program, under which the Administrator may make grants 
to, or enter into cooperative agreements or contracts with, eligible 
intermediaries for the purpose of providing financial and technical as-
sistance to small business concerns seeking to establish a drug-free 
workplace program. 
(2) ADDITIONAL GRANTS FOR TECHNICAL ASSISTANCE.—In addition 
to grants under paragraph (1), the Administrator may make grants to, 
or enter into cooperative agreements or contracts with, any grantee for 
the purpose of providing, in cooperation with 1 or more small business 
development centers, technical assistance to small business concerns 
seeking to establish a drug-free workplace program. 
(3) 2-YEAR GRANTS.—A grant made under this subsection shall be 
for a period of 2 years, subject to an annual performance review by 
the Administrator. 
(c) PROMOTION
OF
EFFECTIVE
PRACTICES
OF
ELIGIBLE
INTER-
MEDIARIES.— 
(1) TECHNICAL
ASSISTANCE
AND
INFORMATION.—The Adminis-
trator, after consultation with the Director of the Center for Substance 
Abuse and Prevention, shall provide technical assistance and informa-
tion to each eligible intermediary under subsection (b) regarding the 
most effective practices in establishing and carrying out drug-free 
workplace programs. 
(2) EVALUATION OF PROGRAM.— 
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(A) DATA COLLECTION AND ANALYSIS.— 
(i) IN
GENERAL.—An eligible intermediary receiving a 
grant under this section shall establish a system to collect 
and analyze information regarding the effectiveness of drug- 
free workplace programs established with assistance provided 
under this section through the intermediary, including infor-
mation regarding any increase or decrease among employees 
in drug use, awareness of the adverse consequences of drug 
use, and absenteeism, injury, and disciplinary problems re-
lated to drug use. 
(ii) REQUIREMENTS.—The system shall conform to such 
requirements as the Administrator, after consultation with 
the Director of the Center for Substance Abuse and Preven-
tion, may prescribe. 
(iii) LIMITATION.—Not more than 5 percent of the amount 
of a grant made under subsection (b) shall be used by the eli-
gible intermediary to carry out this paragraph. 
(B) METHOD OF EVALUATION.— 
(i) IN
GENERAL.—The Administrator, after consultation 
with the Director of the Center for Substance Abuse and Pre-
vention, shall provide technical assistance and guidance to 
each eligible intermediary receiving a grant under subsection 
(b) regarding the collection and analysis of information to 
evaluate the effectiveness of drug-free workplace programs es-
tablished with assistance provided under this section, includ-
ing the information referred to in paragraph (1). 
(ii) FORMS OF ASSISTANCE.—Assistance under clause (i) 
shall include— 
(I) the identification of additional information suitable 
for measuring the benefits of drug-free workplace pro-
grams to the small business concern and to the small 
business concern’s employees; and 
(II) the identification of methods suitable for ana-
lyzing such information. 
(d) CONTRACT AUTHORITY.—In carrying out this section, the Adminis-
trator may— 
(1) contract with public and private entities to provide assistance re-
lated to carrying out the program under this section; and 
(2) compensate those entities for provision of that assistance. 
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(ix) the need for a mentor-prote´ge´ pair, if accepted to par-
ticipate as a pair in a mentor-prote´ge´ program of any Federal 
agency, to be accepted to participate as a pair in all Federal 
agency mentor-prote´ge´ programs; 
(x) actions to be taken to ensure benefits for prote´ge´s and 
to protect a prote´ge´ against actions by a mentor that— 
(I) may adversely affect the prote´ge´’s status as a 
small business concern; or 
(II) provide disproportionate economic benefits to the 
mentor relative to those provided the prote´ge´; and 
(xi) the types of assistance provided by a mentor to assist 
with compliance with the requirements of contracting with the 
Federal Government after award of a contract or subcontract 
under this section. 
(4) LIMITATION ON APPLICABILITY.—Paragraph (1) does not apply 
to— 
(A) a mentor-prote´ge´ program of the Department of Defense; 
(B) mentoring assistance provided under an SBIR program or 
a STTR program; or 
(C) until the date that is 1 year after the date on which the 
Administrator prescribes regulations under paragraph (3), a Fed-
eral agency operating a mentor-prote´ge´ program in effect on Janu-
ary 2, 2013. 
§ 299107. Subcontracting requirements and limitations 
(a) DEFINITIONS.—In this section: 
(1) COVERED SMALL BUSINESS CONCERN.—The term ‘‘covered small 
business concern’’ means a business concern that— 
(A) with respect to a contract awarded under the business devel-
opment program, is a small business concern eligible to receive 
contracts under the business development program; 
(B) with respect to a contract awarded under chapter 257— 
(i) is a small business concern owned and controlled by 
women (as defined in section 257101 of this title); or 
(ii) is a small business concern owned and controlled by 
women (as defined in that section) that is not less than 51 
percent owned by 1 or more women who are economically dis-
advantaged (and such ownership is determined without regard 
to any community property law); 
(C) with respect to a contract awarded under section 251101 
of this title, is a small business concern; 
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(D) with respect to a contract awarded under the HUBZone 
program, is a qualified HUBZone small business concern; and 
(E) with respect to a contract awarded under chapter 255, is 
a small business concern owned and controlled by service-disabled 
veterans. 
(2) SIMILARLY SITUATED ENTITY.—The term ‘‘similarly situated en-
tity’’ means a subcontractor that— 
(A)(i) is a subcontractor for a small business concern; and 
(ii) is a small business concern; 
(B)(i) is a subcontractor for a small business concern eligible 
to receive contracts under the business development program; and 
(ii) is a small business concern eligible to receive contracts 
under the business development program; 
(C)(i) is a subcontractor for a small business concern owned 
and controlled by women (as defined in section 257101 of this 
title); and 
(ii) is a small business concern owned and controlled by women 
(as defined in that section); 
(D)(i) is a subcontractor for a small business concern owned 
and controlled by women (as defined in 257101 of this title) that 
is not less than 51 percent owned by 1 or more women who are 
economically disadvantaged (and such ownership is determined 
without regard to any community property law); 
(ii) is small business concern owned and controlled by women 
(as defined in that section) that is not less than 51 percent owned 
by 1 or more women who are economically disadvantaged (and 
such ownership is determined without regard to any community 
property law); 
(E)(i) is a subcontractor for a qualified HUBZone small busi-
ness concern; and 
(ii) is a qualified HUBZone small business concern; or 
(F)(i) is a subcontractor for a small business concern owned 
and controlled by service-disabled veterans; and 
(ii) is a small business concern owned and controlled by service- 
disabled veterans. 
(b) IN GENERAL.—If awarded a contract under the business development 
program, chapter 257, 251101 of this title, the HUBZone program, or 
chapter 255, a covered small business concern— 
(1) in the case of a contract for services, shall not expend on sub-
contractors more than 50 percent of the amount paid to the covered 
small business concern under the contract; 
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(2) in the case of a contract for supplies (other than from a regular 
dealer in the supplies), shall not expend on subcontractors more than 
50 percent of the amount, less the cost of materials, paid to the cov-
ered small business concern under the contract; 
(3) in the case of a contract for services and supplies (other than 
from a regular dealer in the supplies)— 
(A) shall determine for which category, services (as described in 
paragraph (1)) or supplies (as described in paragraph (2)), the 
greater percentage of the contract is awarded; 
(B) shall determine the amount awarded under the contract for 
that category of services or supplies; and 
(C) shall not expend on subcontractors, with respect to the 
amount determined under subparagraph (B), more than 50 per-
cent of that amount; and 
(4) in the case of a contract that is principally for supplies from a 
regular dealer in the supplies (and is not a contract principally for a 
service or for construction), shall supply the product of a domestic 
manufacturer or processor that is a small business concern, unless a 
waiver of the requirement to supply the product of a domestic manufac-
turer or processor that is a small business concern is granted— 
(A) by the Administrator, after reviewing a determination by 
the applicable contracting officer that no manufacturer or proc-
essor that is a small business concern can reasonably be expected 
to offer a product meeting the specifications (including period for 
performance) required by the contract; or 
(B) by the Administrator for a product (or class of products), 
after determining that no manufacturer or processor that is a 
small business concern is available to participate in the Federal 
procurement market. 
(c) SIMILARLY SITUATED ENTITIES.—Contract amounts expended by a 
covered small business concern on a subcontractor that is a similarly situ-
ated entity shall not be considered to be subcontracted for purposes of de-
termining whether a covered small business concern failed to comply with 
a requirement or limitation under subsection (b) or (e). 
(d) MODIFICATIONS OF PERCENTAGES.—The Administrator may change, 
by rule (after providing notice and an opportunity for public comment), a 
percentage specified in paragraph (1), (2), or (3)(C) of subsection (b) if the 
Administrator determines that the change is necessary to reflect conven-
tional industry practices among business concerns that are below the numer-
ical size standard for businesses in that industry category. 
(e) OTHER CONTRACTS.— 
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(1) IN GENERAL.—With respect to a category of contracts to which 
a requirement under subsection (b) does not apply, the Administrator 
may establish, by rule (after providing notice and an opportunity for 
public comment), a requirement that a covered small business concern 
shall not expend on subcontractors more than a specified percentage of 
the amount paid to the covered small business concern under a contract 
in that category. 
(2) UNIFORMITY.—A requirement established under paragraph (1) 
shall apply to all covered small business concerns. 
(3) CONSTRUCTION PROJECTS.—The Administrator shall establish, 
through public rulemaking, requirements similar to those specified in 
paragraph (1) to be applicable to contracts for general and specialty 
construction and to contracts for any other industry category not oth-
erwise subject to the requirements of that paragraph. The percentage 
applicable to any such requirement shall be determined in accordance 
with paragraph (1). 
(f) MONITORING.—The Administrator shall take such actions as are nec-
essary to ensure that a Federal subcontracting reporting system in existence 
on January 2, 2013, is modified to notify the Administrator, the appro-
priate Director of the Office of Small and Disadvantaged Business Utiliza-
tion, and the appropriate contracting officer of a failure to comply with a 
requirement or limitation under subsection (b) or (e). 
(g) INAPPLICABILITY OF REQUIREMENT TO REVIEW AND JUSTIFY CON-
TRACTS.—The requirements under section 802 of the National Defense Au-
thorization Act for Fiscal Year 2013 (10 U.S.C. 2304 note) do not apply 
to a contract to which this section applies. 
Subtitle III—Investment Division 
Division A—General Provisions 
Chapter 301—General Provisions 
Sec. 
301101.
Definitions. 
301102.
Implementation of subtitle. 
§ 301101. Definitions 
In this subtitle: 
(1) 3D PARTY DEBT.—The term ‘‘3d party debt’’ means any indebt-
edness for borrowed money, other than indebtedness owed to the Ad-
ministrator. 
(2) ARTICLES.—The term ‘‘articles’’— 
(A) with respect to an incorporated body, means the articles of 
incorporation of the incorporated body; and 
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415 
(B) with respect to any other business entity, means the func-
tional equivalent of the articles of incorporation of an incorporated 
body or other similar document specified by the Administrator. 
(3) EMPLOYEE WELFARE BENEFIT PLAN.— 
(A) IN GENERAL.—The term ‘‘employee welfare benefit plan’’ 
has the meaning given the term in section 3 of the Employee Re-
tirement Income Security Act of 1974 (29 U.S.C. 1002). 
(B) INCLUSIONS.—The term ‘‘employee welfare benefit plan’’ 
includes any similar plan not covered by the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1001 et seq.) that has 
been established and that is maintained by the Federal Govern-
ment or any State or political subdivision, or any agency or instru-
mentality thereof, for the benefit of employees. 
(4) ENERGY SAVING DEBENTURE.—The term ‘‘energy saving deben-
ture’’ means a deferred interest debenture that— 
(A) is issued at a discount; 
(B) has a 5-year maturity or a 10-year maturity; 
(C) requires no interest payment or annual charge for the 1st 
5 years; 
(D) is restricted to energy saving qualified investments; and 
(E) is issued at no cost (as defined in section 502 of the Credit 
Reform Act of 1990 (2 U.S.C. 661a)) with respect to purchasing 
and guaranteeing the debenture. 
(5) ENERGY SAVING QUALIFIED INVESTMENT.—The term ‘‘energy 
saving qualified investment’’ means an investment in a small business 
concern that is primarily engaged in researching, manufacturing, devel-
oping, or providing products, goods, or services that reduce the use or 
consumption of nonrenewable energy resources. 
(6) LEVERAGE.—The term ‘‘leverage’’ includes— 
(A) a debenture purchased or guaranteed by the Administrator; 
(B) a participating security purchased or guaranteed by the Ad-
ministrator; and 
(C) a preferred security outstanding as of October 1, 1995. 
(7) LICENSE.—The term ‘‘license’’ means a license to operate as a 
small business investment company issued by the Administrator to a 
company under section 303102 of this title. 
(8) LICENSEE.— 
(A) IN GENERAL.—The term ‘‘licensee’’ means a company that 
is issued a license. 
(B) INCLUSION.—The term ‘‘licensee’’ includes a specialized 
small business investment company. 
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416 
(9) LIMITED LIABILITY COMPANY.—The term ‘‘limited liability com-
pany’’ means a business entity that is organized and operating in ac-
cordance with a State limited liability company statute approved by the 
Administrator. 
(10) LONG-TERM.—The term ‘‘long-term’’, used in connection with 
equity capital or loan funds invested in a small business concern or 
smaller enterprise, means a period of time of not less than 1 year. 
(11) LOW-INCOME GEOGRAPHIC AREA.—The term ‘‘low-income geo-
graphic area’’ means— 
(A) a population census tract (or in the case of an area that 
is not tracted for population census tracts, the equivalent county 
division, as defined by the Bureau of the Census of the Depart-
ment of Commerce for purposes of defining poverty areas), if— 
(i) the poverty rate for the population census tract is not 
less than 20 percent; 
(ii)(I) in the case of a population census tract that is lo-
cated within a metropolitan area, 50 percent or more of the 
households in the population census tract have an income 
equal to less than 60 percent of the area median gross in-
come; or 
(II) in the case of a population census tract that is not lo-
cated within a metropolitan area, the median household in-
come for the census tract does not exceed 80 percent of the 
statewide median household income; or 
(iii) as determined by the Administrator based on objective 
criteria, a substantial population of low-income individuals re-
side, an inadequate access to investment capital exists, or 
other indications of economic distress exist in the population 
census tract; or 
(B) an area located within— 
(i) a HUBZone; 
(ii) an urban empowerment zone or urban enterprise com-
munity (as designated by the Secretary of Housing and 
Urban Development); or 
(iii) a rural empowerment zone or rural enterprise commu-
nity (as designated by the Secretary of Agriculture). 
(12) MANAGEMENT
OFFICIAL.—The term ‘‘management official’’ 
means an officer, director, general partner, manager, employee, agent, 
or other participant in the management or conduct of the affairs of a 
licensee. 
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417 
(13) MEMBER.—The term ‘‘member’’, with respect to a licensee that 
is a limited liability company, means— 
(A) a holder of an ownership interest in the limited liability 
company; or 
(B) a person otherwise admitted to membership in the limited 
liability company. 
(14) PARTICIPATING SECURITY.—The term ‘‘participating security’’ 
includes— 
(A) preferred stock, a preferred limited partnership interest, or 
a similar instrument; and 
(B) a debenture under the terms of which interest is payable 
only to the extent of earnings. 
(15) PENSION PLAN.— 
(A) IN GENERAL.—The term ‘‘pension plan’’ has the meaning 
given the term in section 3 of the Employee Retirement Income 
Security Act of 1974 (29 U.S.C. 1002). 
(B) INCLUSIONS.—The term ‘‘pension plan’’ includes— 
(i) a public or private pension or retirement plan subject 
to the Employee Retirement Income Security Act of 1974 (29 
U.S.C. 1001 et seq.); and 
(ii) any similar plan not covered by that Act that is estab-
lished and maintained by the Federal Government or any 
State or political subdivision, or any agency or instrumen-
tality thereof, for the benefit of employees. 
(16) PRIVATE CAPITAL.— 
(A) IN GENERAL.—The term ‘‘private capital’’ means the sum 
of— 
(i)(I) the paid-in capital and paid-in surplus of a corporate 
licensee; 
(II) the contributed capital of the partners of a partnership 
licensee; or 
(III) the equity investment of the members of a limited li-
ability company licensee; and 
(ii) subject to subparagraph (B), unfunded binding com-
mitments, from investors that meet criteria established by the 
Administrator, to contribute capital to the licensee. 
(B) LIMITATION.—An unfunded commitment described in sub-
paragraph (A)(ii) may be counted as private capital for purposes 
of approval by the Administrator of a request for leverage, but le-
verage shall not be funded based on such a commitment. 
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(C) EXCLUSIONS.—The term ‘‘private capital’’ does not in-
clude— 
(i) funds borrowed by a licensee from any source; 
(ii) funds obtained through the issuance of leverage; or 
(iii) funds obtained directly or indirectly from a Federal, 
State, or local government, or any government agency or in-
strumentality, except for— 
(I) funds obtained from the business revenues (exclud-
ing any governmental appropriation) of a federally char-
tered or government-sponsored corporation established 
before October 1, 1987; 
(II) funds invested by an employee welfare benefit 
plan or pension plan; and 
(III) qualified nonprivate funds (if the investors of the 
qualified nonprivate funds do not control, directly or in-
directly, the management, board of directors, general 
partners, or members of the licensee). 
(17) QUALIFIED HUBZONE SMALL BUSINESS CONCERN.—The term 
‘‘qualified HUBZone small business concern’’ has the meaning given 
the term in section 101102 of this title, except that the exception stat-
ed in paragraph (19)(B) of this section applies. 
(18) QUALIFIED NONPRIVATE FUNDS.—The term ‘‘qualified nonpri-
vate funds’’ means— 
(A) funds directly or indirectly invested in an applicant or li-
censee on or before August 16, 1982, by any Federal agency, 
other than SBA, under a provision of law that explicitly requires 
the inclusion of such funds in the definition of the term ‘‘private 
capital’’; 
(B) funds directly or indirectly invested in an applicant or li-
censee by a Federal agency under a provision of law enacted after 
September 4, 1992, that explicitly requires the inclusion of those 
funds in the definition of the term ‘‘private capital’’; and 
(C) funds invested in an applicant or licensee by 1 or more 
State or local government entities (including any guarantee ex-
tended by such an entity) in an aggregate amount that does not 
exceed 33 percent of the private capital of the applicant or li-
censee. 
(19) SMALL BUSINESS CONCERN.— 
(A) IN GENERAL.—The term ‘‘small business concern’’ has the 
meaning given the term in section 101103 of this title, except as 
provided in subparagraph (B). 
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419 
(B) EXCEPTION.—For purposes of this subtitle, in determining 
whether a business concern is a small business concern— 
(i) an investment by a venture capital firm, investment 
company (including a small business investment company), 
employee welfare benefit plan, pension plan, trust, foundation, 
or endowment that is exempt from Federal income taxation— 
(I) shall not cause a business concern to be considered 
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 investment; 
(II) shall be disregarded in determining whether a 
business concern satisfies size standards established 
under section 101103 of this title; and 
(III) shall be disregarded in determining whether a 
small business concern is a smaller enterprise; and 
(ii) in determining whether a business concern satisfies net 
income standards established under section 101103 of this 
title, if the business concern is not required by law to pay 
Federal income taxes at the enterprise level, but is required 
to pass income through to the shareholders, partners, bene-
ficiaries, or other equitable owners of the business concern, 
the net income of the business concern shall be determined 
by allowing a deduction in an amount equal to the sum of— 
(I) if the business concern is not required by law to 
pay State (and local, if any) income taxes at the enter-
prise level, the net income (determined without regard to 
this subparagraph), multiplied by the marginal State in-
come tax rate (or by the combined State and local in-
come tax rates, as applicable) that would apply if the 
business concern were a corporation; and 
(II) the net income (so determined) less any deduction 
for State (and local) income taxes calculated under sub-
clause (I), multiplied by the marginal Federal income tax 
rate that would apply if the business concern were a cor-
poration. 
(20) SMALL
BUSINESS
CONCERN
OWNED
AND
CONTROLLED
BY 
SERVICE-DISABLED
VETERANS.—The term ‘‘small business concern 
owned and controlled by service-disabled veterans’’ has the meaning 
given the term in section 101102 of this title, except that the exception 
stated in paragraph (19)(B) of this section applies. 
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