{"identifier":"/us/usc/t7/s2009cc","title":7,"num":"\u00a7\u202f2009cc.","heading":"Definitions","text":"\u00a7\u202f2009cc.\nDefinitions\nIn this subchapter:\n(1)\nArticles\nThe term \u201carticles\u201d means articles of incorporation for an incorporated body or the functional equivalent or other similar documents specified by the Secretary for other business entities.\n(2)\nDevelopmental capital\nThe term \u201cdevelopmental capital\u201d means capital in the form of equity capital investments in rural business investment companies with an objective of fostering economic development in rural areas.\n(3)\nEmployee welfare benefit plan; pension plan\n(A)\nIn general\nThe terms \u201cemployee welfare benefit plan\u201d and \u201cpension plan\u201d have the meanings given the terms in\nsection 1002 of title 29\n(B)\nInclusions\nThe terms \u201cemployee welfare benefit plan\u201d and \u201cpension plan\u201d include\u2014\n(i) public and private pension or retirement plans subject to this subchapter; and\n(ii) similar plans not covered by this subchapter that have been established, and that are maintained, by the Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State) for the benefit of employees.\n(4)\nEquity capital\nThe term \u201cequity capital\u201d means\u2014\n(A) common or preferred stock or a similar instrument, including subordinated debt with equity features; and\n(B) any other type of equity-like financing that might be necessary to facilitate the purposes of this Act, excluding financing such as senior debt or other types of financing that competes with routine loanmaking of commercial lenders.\n(5)\nLeverage\nThe term \u201cleverage\u201d includes\u2014\n(A) debentures purchased or guaranteed by the Secretary;\n(B) participating securities purchased or guaranteed by the Secretary; and\n(C) preferred securities outstanding as of\nMay 13, 2002\n(6)\nLicense\nThe term \u201clicense\u201d means a license issued by the Secretary as provided in\nsection 2009cc\u20133(e) of this title\n(7)\nLimited liability company\nThe term \u201climited liability company\u201d means a business entity that is organized and operating in accordance with a State limited liability company law approved by the Secretary.\n(8)\nMember\nThe term \u201cmember\u201d means, with respect to a rural business investment company that is a limited liability company, a holder of an ownership interest or a person otherwise admitted to membership in the limited liability company.\n(9)\nOperational assistance\nThe term \u201coperational assistance\u201d means management, marketing, and other technical assistance that assists a rural business concern with business development.\n(10)\nParticipation agreement\nThe term \u201cparticipation agreement\u201d means an agreement, between the Secretary and a rural business investment company granted final approval under\nsection 2009cc\u20133(e) of this title\n(11)\nPrivate capital\n(A)\nIn general\nThe term \u201cprivate capital\u201d means the total of\u2014\n(i)\n(I) the paid-in capital and paid-in surplus of a corporate rural business investment company;\n(II) the contributed capital of the partners of a partnership rural business investment company; or\n(III) the equity investment of the members of a limited liability company rural business investment company; and\n(ii) unfunded binding commitments from investors that meet criteria established by the Secretary to contribute capital to the rural business investment company, except that\u2014\n(I) unfunded commitments may be counted as private capital for purposes of approval by the Secretary of any request for leverage; but\n(II) leverage shall not be funded based on the commitments.\n(B)\nExclusions\nThe term \u201cprivate capital\u201d does not include\u2014\n(i) any funds borrowed by a rural business investment company from any source;\n(ii) any funds obtained through the issuance of leverage; or\n(iii) any funds obtained directly or indirectly from the Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State), except for\u2014\n(I) funds obtained from the business revenues (excluding any governmental appropriation) of any federally chartered or government-sponsored enterprise established prior to\nMay 13, 2002\n(II) funds invested by an employee welfare benefit plan or pension plan; and\n(III) any qualified nonprivate funds (if the investors of the qualified nonprivate funds do not control, directly or indirectly, the management, board of directors, general partners, or members of the rural business investment company).\n(12)\nQualified nonprivate funds\nThe term \u201cqualified nonprivate funds\u201d means any\u2014\n(A) funds directly or indirectly invested in any applicant or rural business investment company on or before\nMay 13, 2002\n(B) funds invested in any applicant or rural business investment company by 1 or more entities of any State (including by a political subdivision, agency, or instrumentality of the State and including any guarantee extended by those entities) in an aggregate amount that does not exceed 33 percent of the private capital of the applicant or rural business investment company.\n(13)\nRural business concern\nThe term \u201crural business concern\u201d means\u2014\n(A) a public, private, or cooperative for-profit or nonprofit organization;\n(B) a for-profit or nonprofit business controlled by an Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group; or\n(C) any other person or entity;\nthat primarily operates in a rural area, as determined by the Secretary.\n(14)\nRural business investment company\nThe term \u201crural business investment company\u201d means a company that\u2014\n(A) has been granted final approval by the Secretary under\nsection 2009cc\u20133(e) of this title\n(B) has entered into a participation agreement with the Secretary.\n(15)\nSmaller enterprise\nThe term \u201csmaller enterprise\u201d means any rural business concern that, together with its affiliates\u2014\n(A) has\u2014\n(i) a net financial worth of not more than $6,000,000, as of the date on which assistance is provided under this subchapter to the rural business concern; and\n(ii) an average net income for the 2-year period preceding the date on which assistance is provided under this subchapter to the rural business concern, of not more than $2,000,000, after Federal income taxes (excluding any carryover losses), except that, for purposes of this clause, if the rural 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 total of\u2014\n(I) if the rural 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\n(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 rural business concern were a corporation; or\n(B) satisfies the standard industrial classification size standards established by the Administrator of the Small Business Administration for the industry in which the rural business concern is primarily engaged.","url":"https://projectusc.org/usc/t7/s2009cc.html","content":[{"t":"sec","id":"/us/usc/t7/s2009cc","children":[{"t":"num","text":"\u00a7\u202f2009cc."},{"t":"heading","text":"Definitions","tail":"\n"},{"t":"chapeau","text":"In this subchapter:"},{"t":"para","id":"/us/usc/t7/s2009cc/1","children":[{"t":"num","text":"(1)"},{"t":"heading","text":"Articles"},{"t":"content","children":[{"t":"p","text":"The term \u201carticles\u201d means articles of incorporation for an incorporated body or the functional equivalent or other similar documents specified by the Secretary for other business entities.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/2","children":[{"t":"num","text":"(2)"},{"t":"heading","text":"Developmental capital"},{"t":"content","children":[{"t":"p","text":"The term \u201cdevelopmental capital\u201d means capital in the form of equity capital investments in rural business investment companies with an objective of fostering economic development in rural areas.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/3","children":[{"t":"num","text":"(3)"},{"t":"heading","text":"Employee welfare benefit plan; pension plan"},{"t":"subpara","id":"/us/usc/t7/s2009cc/3/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"content","children":[{"t":"p","text":"The terms \u201cemployee welfare benefit plan\u201d and \u201cpension plan\u201d have the meanings given the terms in ","children":[{"t":"ref","text":"section 1002 of title 29","href":"/us/usc/t29/s1002","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/3/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Inclusions"},{"t":"chapeau","text":"The terms \u201cemployee welfare benefit plan\u201d and \u201cpension plan\u201d include\u2014"},{"t":"clause","id":"/us/usc/t7/s2009cc/3/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" public and private pension or retirement plans subject to this subchapter; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t7/s2009cc/3/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" similar plans not covered by this subchapter that have been established, and that are maintained, by the Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State) for the benefit of employees.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/4","children":[{"t":"num","text":"(4)"},{"t":"heading","text":"Equity capital"},{"t":"chapeau","text":"The term \u201cequity capital\u201d means\u2014"},{"t":"subpara","id":"/us/usc/t7/s2009cc/4/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" common or preferred stock or a similar instrument, including subordinated debt with equity features; and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/4/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" any other type of equity-like financing that might be necessary to facilitate the purposes of this Act, excluding financing such as senior debt or other types of financing that competes with routine loanmaking of commercial lenders.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/5","children":[{"t":"num","text":"(5)"},{"t":"heading","text":"Leverage"},{"t":"chapeau","text":"The term \u201cleverage\u201d includes\u2014"},{"t":"subpara","id":"/us/usc/t7/s2009cc/5/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" debentures purchased or guaranteed by the Secretary;","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/5/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" participating securities purchased or guaranteed by the Secretary; and","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/5/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" preferred securities outstanding as of ","children":[{"t":"text","text":"May 13, 2002","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/6","children":[{"t":"num","text":"(6)"},{"t":"heading","text":"License"},{"t":"content","children":[{"t":"p","text":"The term \u201clicense\u201d means a license issued by the Secretary as provided in ","children":[{"t":"ref","text":"section 2009cc\u20133(e) of this title","href":"/us/usc/t7/s2009cc\u20133/e","tail":"."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/7","children":[{"t":"num","text":"(7)"},{"t":"heading","text":"Limited liability company"},{"t":"content","children":[{"t":"p","text":"The term \u201climited liability company\u201d means a business entity that is organized and operating in accordance with a State limited liability company law approved by the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/8","children":[{"t":"num","text":"(8)"},{"t":"heading","text":"Member"},{"t":"content","children":[{"t":"p","text":"The term \u201cmember\u201d means, with respect to a rural business investment company that is a limited liability company, a holder of an ownership interest or a person otherwise admitted to membership in the limited liability company.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/9","children":[{"t":"num","text":"(9)"},{"t":"heading","text":"Operational assistance"},{"t":"content","children":[{"t":"p","text":"The term \u201coperational assistance\u201d means management, marketing, and other technical assistance that assists a rural business concern with business development.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/10","children":[{"t":"num","text":"(10)"},{"t":"heading","text":"Participation agreement"},{"t":"content","children":[{"t":"p","text":"The term \u201cparticipation agreement\u201d means an agreement, between the Secretary and a rural business investment company granted final approval under ","children":[{"t":"ref","text":"section 2009cc\u20133(e) of this title","href":"/us/usc/t7/s2009cc\u20133/e","tail":", that requires the rural business investment company to make investments in smaller enterprises in rural areas."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/11","children":[{"t":"num","text":"(11)"},{"t":"heading","text":"Private capital"},{"t":"subpara","id":"/us/usc/t7/s2009cc/11/A","children":[{"t":"num","text":"(A)"},{"t":"heading","text":"In general"},{"t":"chapeau","text":"The term \u201cprivate capital\u201d means the total of\u2014"},{"t":"clause","id":"/us/usc/t7/s2009cc/11/A/i","children":[{"t":"num","text":"(i)"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/A/i/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" the paid-in capital and paid-in surplus of a corporate rural business investment company;","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/A/i/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" the contributed capital of the partners of a partnership rural business investment company; or","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/A/i/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" the equity investment of the members of a limited liability company rural business investment company; and","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t7/s2009cc/11/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" unfunded binding commitments from investors that meet criteria established by the Secretary to contribute capital to the rural business investment company, except that\u2014"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" unfunded commitments may be counted as private capital for purposes of approval by the Secretary of any request for leverage; but","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" leverage shall not be funded based on the commitments.","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/11/B","children":[{"t":"num","text":"(B)"},{"t":"heading","text":"Exclusions"},{"t":"chapeau","text":"The term \u201cprivate capital\u201d does not include\u2014"},{"t":"clause","id":"/us/usc/t7/s2009cc/11/B/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" any funds borrowed by a rural business investment company from any source;","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t7/s2009cc/11/B/ii","children":[{"t":"num","text":"(ii)"},{"t":"content","text":" any funds obtained through the issuance of leverage; or","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t7/s2009cc/11/B/iii","children":[{"t":"num","text":"(iii)"},{"t":"chapeau","text":" any funds obtained directly or indirectly from the Federal Government or any State (including by a political subdivision, agency, or instrumentality of the Federal Government or a State), except for\u2014"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/B/iii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" funds obtained from the business revenues (excluding any governmental appropriation) of any federally chartered or government-sponsored enterprise established prior to ","children":[{"t":"text","text":"May 13, 2002","tail":";"}],"tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/B/iii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" funds invested by an employee welfare benefit plan or pension plan; and","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t7/s2009cc/11/B/iii/III","children":[{"t":"num","text":"(III)"},{"t":"content","text":" any qualified nonprivate funds (if the investors of the qualified nonprivate funds do not control, directly or indirectly, the management, board of directors, general partners, or members of the rural business investment company).","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/12","children":[{"t":"num","text":"(12)"},{"t":"heading","text":"Qualified nonprivate funds"},{"t":"chapeau","text":"The term \u201cqualified nonprivate funds\u201d means any\u2014"},{"t":"subpara","id":"/us/usc/t7/s2009cc/12/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" funds directly or indirectly invested in any applicant or rural business investment company on or before ","children":[{"t":"text","text":"May 13, 2002","tail":", by any Federal agency, other than the Department of Agriculture, under a provision of law explicitly mandating the inclusion of those funds in the definition of the term \u201cprivate capital\u201d; and"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/12/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" funds invested in any applicant or rural business investment company by 1 or more entities of any State (including by a political subdivision, agency, or instrumentality of the State and including any guarantee extended by those entities) in an aggregate amount that does not exceed 33 percent of the private capital of the applicant or rural business investment company.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/13","children":[{"t":"num","text":"(13)"},{"t":"heading","text":"Rural business concern"},{"t":"chapeau","text":"The term \u201crural business concern\u201d means\u2014"},{"t":"subpara","id":"/us/usc/t7/s2009cc/13/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" a public, private, or cooperative for-profit or nonprofit organization;","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/13/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" a for-profit or nonprofit business controlled by an Indian tribe on a Federal or State reservation or other federally recognized Indian tribal group; or","tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/13/C","children":[{"t":"num","text":"(C)"},{"t":"content","text":" any other person or entity;","tail":"\n"}],"tail":"\n\n"},{"t":"continuation","text":"that primarily operates in a rural area, as determined by the Secretary.","tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/14","children":[{"t":"num","text":"(14)"},{"t":"heading","text":"Rural business investment company"},{"t":"chapeau","text":"The term \u201crural business investment company\u201d means a company that\u2014"},{"t":"subpara","id":"/us/usc/t7/s2009cc/14/A","children":[{"t":"num","text":"(A)"},{"t":"content","text":" has been granted final approval by the Secretary under ","children":[{"t":"ref","text":"section 2009cc\u20133(e) of this title","href":"/us/usc/t7/s2009cc\u20133/e","tail":"; and"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/14/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" has entered into a participation agreement with the Secretary.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"para","id":"/us/usc/t7/s2009cc/15","children":[{"t":"num","text":"(15)"},{"t":"heading","text":"Smaller enterprise"},{"t":"chapeau","text":"The term \u201csmaller enterprise\u201d means any rural business concern that, together with its affiliates\u2014"},{"t":"subpara","id":"/us/usc/t7/s2009cc/15/A","children":[{"t":"num","text":"(A)"},{"t":"chapeau","text":" has\u2014"},{"t":"clause","id":"/us/usc/t7/s2009cc/15/A/i","children":[{"t":"num","text":"(i)"},{"t":"content","text":" a net financial worth of not more than $6,000,000, as of the date on which assistance is provided under this subchapter to the rural business concern; and","tail":"\n"}],"tail":"\n"},{"t":"clause","id":"/us/usc/t7/s2009cc/15/A/ii","children":[{"t":"num","text":"(ii)"},{"t":"chapeau","text":" an average net income for the 2-year period preceding the date on which assistance is provided under this subchapter to the rural business concern, of not more than $2,000,000, after Federal income taxes (excluding any carryover losses), except that, for purposes of this clause, if the rural 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 total of\u2014"},{"t":"subclause","id":"/us/usc/t7/s2009cc/15/A/ii/I","children":[{"t":"num","text":"(I)"},{"t":"content","text":" if the rural 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","tail":"\n"}],"tail":"\n"},{"t":"subclause","id":"/us/usc/t7/s2009cc/15/A/ii/II","children":[{"t":"num","text":"(II)"},{"t":"content","text":" 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 rural business concern were a corporation; or","tail":"\n"}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subpara","id":"/us/usc/t7/s2009cc/15/B","children":[{"t":"num","text":"(B)"},{"t":"content","text":" satisfies the standard industrial classification size standards established by the Administrator of the Small Business Administration for the industry in which the rural business concern is primarily engaged.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}