110 STAT. 3009 -739 PUBLIC LAW 104-208—SEPT. 30, 1996 15 USC 694b (b) EFFECTIVE DATE. —The amendments made by subsection note. (a) shall apply with respect to applications received (or pending substantive evaluation) on or after October 1, 1995. SEC. 207. SENSE OF THE CONGRESS. (a) IN GENERAL.— It is the sense of the Congress that the subsidy models prepared by the Office of Management and Budget relative to loan programs sponsored by the United States Small Business Administration have a tendency to— (1) overestimate potential risks of loss; and (2) overemphasize historical losses that may be anomalous and do not truly reflect the success of the programs as a whole. (b) INDEPENDENT STUDY. —Consequently, the Congress mandates the independent study in section 103(h) in an attempt to improve the ability of the Office of Management and Budget to reflect more accurately the budgetary implications of such programs. SEC. 208. SMALL BUSINESS INVESTMENT COMPANY IMPROVEMENTS. (a) DEFINITIONS. — (1) SMALL BUSINESS CONCERN. — Section 103(5) (15 U.S.C. 662(5)) is amended by inserting before the semicolon the following: ", except that, for purposes of this Act, an investment by a venture capital firm, investment company (including a small business investment company) employee welfare benefit plan or pension plan, or trust, foundation, or endowment that is exempt from Federal income taxation— "(A) shall not cause a business concern to be deemed not independently owned and operated; "(B) shall be disregarded in determining whether a business concern satisfies size standards established pursuant to section 3(a)(2) of the Small Business Act; and "(C) shall be disregarded in determining whether a small business concern is a smaller enterprise". (2) PRIVATE CAPITAL. —Section 103(9) (15 U.S.C. 662(9)) is amended to read as follows: "(9) the term 'private capital'— "(A) means the sum of— "(i) the paid-in capital and paid-in surplus of a corporate licensee, the contributed capital of the partners of a partnership licensee, or the equity investment of the members of a limited liability company licensee; and "(ii) unfunded binding commitments, from investors that meet criteria established by the Administrator, to contribute capital to the licensee: Provided, That such unfunded commitments may be counted as private capital for purposes of approval by the Administrator of any request for leverage, but leverage shall not be funded based on such commitments; and "(B) does not include any— "(i) funds borrowed by a licensee from any source; "(ii) funds obtained through the issuance of leverage; or "(iii) funds obtained directly or indirectly from any Federal, State, or local government, or any government agency or instrumentality, except for—
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