688 
‘‘(I) the net income (determined 
without regard to this subparagraph); 
by 
‘‘(II) the marginal State income 
tax rate (or by the combined State 
and local income tax rates, as applica-
ble) that would have applied if the 
business concern were a corporation; 
and 
‘‘(ii) the product obtained by multi-
plying— 
‘‘(I) the net income (so deter-
mined) less any deduction for State 
(and local) income taxes calculated 
under clause (i); by 
‘‘(II) the marginal Federal in-
come tax rate that would have applied 
if the rural business concern were a 
corporation. 
‘‘(b) PURPOSES.—The purposes of the Rural Busi-
ness Investment Program established under this section 
are— 
‘‘(1) to promote economic development and the 
creation of wealth and job opportunities in rural 
areas and among individuals living in those areas by 
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encouraging developmental venture capital invest-
ments in smaller enterprises primarily located in 
rural areas; and 
‘‘(2) to establish a developmental venture cap-
ital program, with the mission of addressing the 
unmet equity investment needs of small enterprises 
located in rural areas, by authorizing the Sec-
retary— 
‘‘(A) to enter into participation agreements 
with rural business investment companies; 
‘‘(B) to guarantee debentures of rural 
business investment companies to enable each 
rural business investment company to make de-
velopmental venture capital investments in 
smaller enterprises in rural areas; and 
‘‘(C) to make grants to rural business in-
vestment companies, and to other entities, for 
the purpose of providing operational assistance 
to smaller enterprises financed, or expected to 
be financed, by rural business investment com-
panies. 
‘‘(c) ESTABLISHMENT.—In accordance with this sub-
title, the Secretary shall establish a Rural Business Invest-
ment Program, under which the Secretary may— 
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‘‘(1) enter into participation agreements with 
companies granted final approval under subsection 
(d)(5) for the purposes described in subsection (b); 
‘‘(2) guarantee the debentures issued by rural 
business investment companies as provided in sub-
section (e); and 
‘‘(3) make grants to rural business investment 
companies, and to other entities, under subsection 
(h). 
‘‘(d) SELECTION OF RURAL BUSINESS INVESTMENT 
COMPANIES.— 
‘‘(1) ELIGIBILITY.—A company shall be eligible 
to apply to participate, as a rural business invest-
ment company, in the program established under 
this section if— 
‘‘(A) the company is a newly formed for- 
profit entity or a newly formed for-profit sub-
sidiary of such an entity; 
‘‘(B) the company has a management team 
with experience in community development fi-
nancing or relevant venture capital financing; 
and 
‘‘(C) the company will invest in enterprises 
that will create wealth and job opportunities in 
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