To amend the Investment Company Act of 1940 to provide incentives for small business investment, and for other purposes.

July 14, 2005

Mr. ALLEN (for himself and Mr. SANTORUM) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To amend the Investment Company Act of 1940 to provide incentives for small business investment, and for other purposes.

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 `Increased Capital Access for Growing Business Act'.

SEC. 2. AMENDMENTS TO THE INVESTMENT COMPANY ACT OF 1940.

(a) Definition of Eligible Portfolio Company- Section 2(a)(46)(C) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(46)(C)) is amended--

(1) by striking clause (i) and inserting the following:

`(i) it does not have any class of equity securities listed for trading on a national securities exchange or traded through the facilities of a national securities association, as described in section 15A of the Securities Exchange Act of 1934;';

(2) by striking `or' at the end of clause (iii);

(3) by redesignating clause (iv) as clause (v); and

(4) by inserting after clause (iii) the following:

`(iv) the aggregate value of its outstanding publicly traded equity securities is not more than $250,000,000, except that the Commission may adjust such amount by rule, regulation, or order to reflect changes in one or more generally accepted indices or other indicators for small business, consistent with the public interest, the protection of investors, and the purposes fairly intended by the policy and provisions of this title; or'.

(b) Assets of Business Development Companies- Section 55(a)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a-54(a)(1)) is amended--

(1) in subparagraph (B), by striking `securities with respect to which a member of a national securities exchange, broker, or dealer may extend or maintain credit to or for a customer pursuant to rules or regulations adopted by the Board of Governors of the Federal Reserve System under section 7 of the Securities Exchange Act of 1934' and inserting the following: `equity securities listed for trading on a national securities exchange or traded through the facilities of a national securities association, as described in section 15A of the Securities Exchange Act of 1934';

(2) by striking `or' at the end of subparagraph (A);

(3) by inserting `or' after the semicolon at the end of subparagraph (B); and

(4) by inserting after subparagraph (B) the following:

`(C) from the issuer of such securities, which issuer is described in subparagraphs (A) and (B) of section 2(a)(46), but is not an eligible portfolio company because the aggregate value of its outstanding publicly traded equity securities is more than $250,000,000 but not more than $500,000,000, if such securities represent not more than 10 percent of the total assets of the business development company invested in securities described in paragraphs (1) through (6) of this subsection;'.

END