[106th Congress Public Law 9]
[From the U.S. Government Printing Office]
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[DOCID: f:publ009.106]
[[Page 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. <<NOTE: Apr. 5, 1999 - [H.R. 68]>>
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, <<NOTE: Small Business
Investment Improvement Act of 1999.>>
SECTION 1. SHORT TITLE. <<NOTE: 15 USC 661 note.>>
This Act may be cited as the ``Small Business Investment Improvement
Act of 1999''.
SEC. 2. SBIC PROGRAM. <<NOTE: Loans.>>
(a) In General.--Section 308(i)(2) of the Small Business Investment
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)(1)(C)(i), by striking ``$800,000,000''
and inserting ``$1,200,000,000''; and
(2) in subsection (e)(1)(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
satisfies 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
[[Page 113 STAT. 18]]
to the shareholders, partners, beneficiaries, 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
(determined without regard to this subparagraph),
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
calculated under clause (i), multiplied by the
marginal Federal income tax rate that would have
applied if the business concern 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, beneficiaries, 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 (determined
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 calculated
under subclause (I), multiplied by the
marginal 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 Investment
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:
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``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):
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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.
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