An amendment numbered 6 printed in House Report 110-603 to strike and replace Title II, regarding venture capital investment standards.

1. Rewrites title II

   Replaces

   Removes title II.

   Inserted: TITLE II--VENTURE CAPITAL INVESTMENT STANDARDS

   Inserted: SEC. 201. ENSURING THAT INNOVATIVE SMALL BUSINESSES WITH SUBSTANTIAL INVESTMENT FROM VENTURE CAPITAL OPERATING COMPANIES ARE ABLE TO PARTICIPATE IN THE SBIR PROGRAM.

   Inserted: Section 9(e) of the Small Business Act (15 U.S.C. 638(e)) is amended by striking "and" at the end of paragraph (8), striking the period at the end of paragraph (9) and inserting "; and", and adding at the end the following:

   Inserted: "(10) effective only for the SBIR and STTR programs, notwithstanding any other amendment made by the SBIR/STTR Reauthorization Act, the following shall apply:

   Inserted: "(A) A business concern that has more than 500 employees shall not qualify as a small business concern.

   Inserted: "(B) In determining whether a small business concern is independently owned and operated under section 3(a)(1) or meets the small business size standards instituted under section 3(a)(2), the Administrator shall not consider a business concern to be affiliated with a venture capital operating company (or with any other business that the venture capital operating company has financed) if--

   Inserted: "(i) the venture capital operating company does not own 50 percent or more of the business concern; and

   Inserted: "(ii) employees of the venture capital operating company do not constitute a majority of the board of directors of the business concern.

   Inserted: "(C) A business concern shall be deemed to be 'independently owned and operated' if--

   Inserted: "(i) it is owned in majority part by one or more natural persons or venture capital operating companies;

   Inserted: "(ii) there is no single venture capital operating company that owns 50 percent or more of the business concern; and

   Inserted: "(iii) there is no single venture capital operating company the employees of which constitute a majority of the board of directors of the business concern.

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   Inserted: "(D) If a venture capital operating company controlled by a business with more than 500 employees (in this subparagraph referred to as a 'VCOC under large business control') has an ownership interest in a small business concern that is owned in majority part by venture capital operating companies, the small business concern is eligible to receive an award under the SBIR or STTR program only if--

   Inserted: "(i) not more than two VCOCs under large business control have an ownership interest in the small business concern;

   Inserted: "(ii) the VCOCs under large business control do not collectively own more than 20 percent of the small business concern; and

   Inserted: "(iii) the VCOCs under large business control do not collaborate with each other to exercise more control over the small business concern than they could otherwise exercise individually.

   Inserted: "(E) The term 'venture capital operating company' means a business concern--

   Inserted: "(i) that--

   Inserted: "(I) is a Venture Capital Operating Company, as that term is defined in regulations promulgated by the Secretary of Labor; or

   Inserted: "(II) is an entity that--

   Inserted: "(aa) is registered under the Investment Company Act of 1940 (15 U.S.C. 80a-51 et seq.); or

   Inserted: "(bb) is an investment company, as defined in section 3(c)(14) of such Act (15 U.S.C. 80a-3(c)(14)), which is not registered under such Act because it is beneficially owned by less than 100 persons; and

   Inserted: "(ii) that is itself organized or incorporated and domiciled in the United States, or is controlled by a business concern that is incorporated and domiciled in the United States.".

   Original wording

   Strike title II of the bill and insert the following:

Read automatically from the Congressional Record. Check the original before relying on it.

As printed