text: 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 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 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:
  
  ``SEC. 101. SHORT TITLE.
  
      ``This Act may be cited as the `Small Business Investment Act of 
  1958'.''.
target: Small Business Investment Improvement Act of 1999 - Amends the Small Business Investment Act of 1958 to: (1) define "interest" for purposes of small business loans granted under the Small Business Investment Company (SBIC) program; and (2) increase the FY 1999 and 2000 funding levels for such program. 
  Provides for the determination of an eligible small business or smaller enterprise that is not required to pay Federal income tax at the corporate level but that is required to pass income through to its shareholders or partners by using a specified formula to compute its after-tax income. 
  Requires the Small Business Administration to issue SBIC guarantees and trust certificates at periodic intervals of not less than every 12 (currently, six) months.
feat_title: Small Business Investment Improvement Act of 1999