Small Business Investment Improvement Act of 1999
PL 106-9 (H.R.68), enacted 04/05/1999

PUBLIC LAW 106-9—APR. 5, 1999 
113 STAT. 17 
Public Law 106-9 
106th Congress 
An Act 
To amend section 20 of the Small Business Act and make technical corrections 
in title III of the Small Business Investment Act. 
Be it enacted by the Senate and House of Representatives of 
the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the "Small Business Investment 
Improvement Act of 1999". 
SEC. 2. SBIC PROGRAM. 
(a) IN GENERAL.—Section 308(i)(2) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 687(i)(2)) is amended by adding at 
the end the following: "In this paragraph, the term 'interest' 
includes only the maximum mandatory sum, expressed in dollars 
or as a percentage rate, that is payable with respect to the business 
loan amount received by the small business concern, and does 
not include the value, if any, of contingent obligations, including 
warrants, royalty, or conversion rights, granting the small business 
investment company an ownership interest in the equity or 
increased future revenue of the small business concern receiving 
the business loan.". 
(b) FUNDING LEVELS.—Section 20 of the Small Business Act 
(15 U.S.C. 631 note) is amended— 
(1) in subsection (d)(l)(C)(i), by striking "$800,000,000" and 
inserting "$1,200,000,000"; and 
(2) in subsection (e)(l)(C)(i), by striking "$900,000,000" and 
inserting "$1,500,000,000". 
(c) DEFINITIONS.— 
(1) SMALL BUSINESS CONCERN.—Section 103(5) of the Small 
Business Investment Act of 1958 (15 U.S.C. 662(5)) is 
amended— 
(A) by redesignating subparagraphs (A) through (C) 
as clauses (i) through (iii), and indenting appropriately; 
(B) in clause (iii), as redesignated, by adding "and" 
at the end; 
(C) by striking "purposes of this Act, an investment" 
\ 
and inserting the following: "purposes of this Act— 
"(A) an investment"; and 
(D) by adding at the end the following: 
"(B) in determining whether a business concern satis-
fies net income standards established pursuant to section 
3(a)(2) of the Small Business Act, 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 
Apr. 5, 1999 
[H.R. 68] 
Small Business 
Investment 
Improvement Act 
of 1999. 
15 u s e 661 note. 
Loans. 
113 STAT. 18 
PUBLIC LAW 106-9—APR. 5, 1999 
to the shareholders, partners, beneficiaries, or other equi-
table 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 
enterprise level, the net income (determined without 
regard to this subparagraph), multiplied by the mar-
ginal State income tax rate (or by the combined State 
and local income tax rates, as applicable) that would 
have applied if the business concern were a corpora-
tion; and 
"(ii) the net income (so determined) less any deduc-
tion for State (and local) income taxes calculated under 
clause (i), multiplied by the marginal Federal income 
tax rate that would have applied if the business con-
cern were a corporation;". 
(2) SMALLER ENTERPRISE.—Section 103(12)(A)(ii) of the 
Small 
Business 
Investment 
Act of 
1958 (15 U.S.C. 
662(12)(A)(ii)) is amended by inserting before the semicolon 
at the end the following: "except that, for purposes of this 
clause, 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 enterprise level, the net income (deter-
mined without regard to this clause), multiplied 
by the marginal State income tax rate (or by the 
combined State and local income tax rates, as 
applicable) that would have applied if the business 
concern were a corporation; and 
"(II) the net income (so determined) less any 
deduction for State (and local) income taxes cal-
culated under subclause (I), multiplied by the mar-
ginal Federal income tax rate that would have 
applied if the business concern were a corporation". 
(d) TECHNICAL CORRECTIONS.— 
(1) REPEAL.—Section 303(g) of the Small Business Invest-
ment Act of 1958 (15 U.S.C. 683(g)) is amended by striking 
paragraph (13). 
(2) ISSUANCE OF GUARANTEES AND TRUST CERTIFICATES.— 
Section 320 of the Small Business Investment Act of 1958 
(15 U.S.C. 687m) is amended by striking "6" and inserting 
"12". 
(3) ELIMINATION OF TABLE OF CONTENTS.—Section 101 of 
the Small Business Investment Act of 1958 (15 U.S.C. 661 
note) is amended to read as follows: 
PUBLIC LAW 106-9—APR. 5, 1999 
113 STAT. 19 
"SEC, 101. SHORT TITLE. 
"This Act may be cited as the 'Small Business Investment 
Act of 1958'.". 
Approved April 5, 1999. 
LEGISLATIVE HISTORY—H.R. 68 (S. 364): 
HOUSE REPORTS: No. 106-1 (Comm. on Small Business). 
SENATE REPORTS: No. 106-6 accompanying S. 364 (Comm. on Small Business). 
CONGRESSIONAL RECORD, Vol. 145 (1999): 
Feb. 2, considered and passed House. 
Mar. 22, considered and passed Senate, amended, in lieu of S. 364. 
Mar. 23, House concurred in Senate amendment.