7 U.S.C. § 2009cc — Definitions

Page 1215 TITLE 7—AGRICULTURE § 2009cc PRIOR PROVISIONS A prior section 383M of Pub. L. 87–128, title III, was renumbered section 383N and is classified to section 2009bb–12 of this title. § 2009bb–12. Authorization of appropriations (a) In general There is authorized to be appropriated to the Authority to carry out this subchapter $40,000,000 for each of fiscal years 2025 through 2029, to remain available until expended. (b) Administrative expenses Not more than 5 percent of the amount appro- priated under subsection (a) for a fiscal year shall be used for administrative expenses of the Authority. (c) Minimum State share of grants Notwithstanding any other provision of this subchapter, for any fiscal year, the aggregate amount of grants received by a State and all persons or entities in the State under this sub- chapter shall be not less than 1⁄3 of the product obtained by multiplying— (1) the aggregate amount of grants under this subchapter for the fiscal year; and (2) the ratio that— (A) the population of the State (as deter- mined by the Secretary of Commerce based on the most recent decennial census for which data are available); bears to (B) the population of the region (as so de- termined). (Pub. L. 87–128, title III, § 383N, formerly § 383M, as added Pub. L. 107–171, title VI, § 6028, May 13, 2002, 116 Stat. 387; renumbered § 383N and amend- ed Pub. L. 110–234, title VI, § 6026(c)(1)(A), (j), May 22, 2008, 122 Stat. 1178, 1182, and Pub. L. 110–246, § 4(a), title VI, § 6026(c)(1)(A), (j), June 18, 2008, 122 Stat. 1664, 1940, 1943; Pub. L. 113–79, title VI, § 6027(b), Feb. 7, 2014, 128 Stat. 850; Pub. L. 118–272, div. B, title II, § 2254(a), Jan. 4, 2025, 138 Stat. 3213.) Editorial Notes CODIFICATION Pub. L. 110–234 and Pub. L. 110–246 made identical amendments to this section. The amendments by Pub. L. 110–234 were repealed by section 4(a) of Pub. L. 110–246. PRIOR PROVISIONS A prior section 383N of Pub. L. 87–128, title III, was re- numbered section 383O and was classified to section 2009bb–13 of this title prior to repeal by Pub. L. 118–272. AMENDMENTS 2025—Subsec. (a). Pub. L. 118–272 substituted ‘‘$40,000,000 for each of fiscal years 2025 through 2029’’ for ‘‘$30,000,000 for each of fiscal years 2008 through 2018’’. 2014—Subsec. (a). Pub. L. 113–79 substituted ‘‘2018’’ for ‘‘2012’’. 2008—Subsec. (a). Pub. L. 110–246, § 6026(j), substituted ‘‘2008 through 2012’’ for ‘‘2002 through 2007’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as an Effective Date note under section 8701 of this title. § 2009bb–13. Repealed. Pub. L. 118–272, div. B, title II, § 2254(b), Jan. 4, 2025, 138 Stat. 3213 Section, Pub. L. 87–128, title III, § 383O, formerly § 383N, as added Pub. L. 107–171, title VI, § 6028, May 13, 2002, 116 Stat. 387; renumbered § 383O and amended Pub. L. 110–234, title VI, § 6026(c)(1)(A), (k), May 22, 2008, 122 Stat. 1178, 1182, and Pub. L. 110–246, § 4(a), title VI, § 6026(c)(1)(A), (k), June 18, 2008, 122 Stat. 1664, 1940, 1943; Pub. L. 113–79, title VI, § 6027(c), Feb. 7, 2014, 128 Stat. 850, terminated authority under this subchapter. SUBCHAPTER VIII—RURAL BUSINESS INVESTMENT PROGRAM § 2009cc. Definitions In this subchapter: (1) Articles The term ‘‘articles’’ means articles of incor- poration for an incorporated body or the func- tional equivalent or other similar documents specified by the Secretary for other business entities. (2) Developmental capital The term ‘‘developmental capital’’ means capital in the form of equity capital invest- ments in rural business investment companies with an objective of fostering economic devel- opment in rural areas. (3) Employee welfare benefit plan; pension plan (A) In general The terms ‘‘employee welfare benefit plan’’ and ‘‘pension plan’’ have the meanings given the terms in section 1002 of title 29. (B) Inclusions The terms ‘‘employee welfare benefit plan’’ and ‘‘pension plan’’ include— (i) public and private pension or retire- ment plans subject to this subchapter; and (ii) similar plans not covered by this sub- chapter that have been established, and that are maintained, by the Federal Gov- ernment or any State (including by a po- litical subdivision, agency, or instrumen- tality of the Federal Government or a State) for the benefit of employees. (4) Equity capital The term ‘‘equity capital’’ means— (A) common or preferred stock or a similar instrument, including subordinated debt with equity features; and (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 financ- ing that competes with routine loanmaking of commercial lenders. (5) Leverage The term ‘‘leverage’’ includes— (A) debentures purchased or guaranteed by the Secretary; (B) participating securities purchased or guaranteed by the Secretary; and Page 1216 TITLE 7—AGRICULTURE § 2009cc (C) preferred securities outstanding as of May 13, 2002. (6) License The term ‘‘license’’ means a license issued by the Secretary as provided in section 2009cc–3(e) of this title. (7) Limited liability company The term ‘‘limited liability company’’ means a business entity that is organized and operating in accordance with a State limited liability company law approved by the Sec- retary. (8) Member The term ‘‘member’’ means, with respect to a rural business investment company that is a limited liability company, a holder of an own- ership interest or a person otherwise admitted to membership in the limited liability com- pany. (9) Operational assistance The term ‘‘operational assistance’’ means management, marketing, and other technical assistance that assists a rural business con- cern with business development. (10) Participation agreement The term ‘‘participation agreement’’ means an agreement, between the Secretary and a rural business investment company granted final approval under section 2009cc–3(e) of this title, that requires the rural business invest- ment company to make investments in small- er enterprises in rural areas. (11) Private capital (A) In general The term ‘‘private capital’’ means the total of— (i)(I) the paid-in capital and paid-in sur- plus of a corporate rural business invest- ment company; (II) the contributed capital of the part- ners of a partnership rural business invest- ment company; or (III) the equity investment of the mem- bers of a limited liability company rural business investment company; and (ii) unfunded binding commitments from investors that meet criteria established by the Secretary to contribute capital to the rural business investment company, ex- cept that— (I) unfunded commitments may be counted as private capital for purposes of approval by the Secretary of any re- quest for leverage; but (II) leverage shall not be funded based on the commitments. (B) Exclusions The term ‘‘private capital’’ does not in- clude— (i) any funds borrowed by a rural busi- ness investment company from any source; (ii) any funds obtained through the issuance of leverage; or (iii) any funds obtained directly or indi- rectly from the Federal Government or any State (including by a political subdivi- sion, agency, or instrumentality of the Federal Government or a State), except for— (I) funds obtained from the business revenues (excluding any governmental appropriation) of any federally chartered or government-sponsored enterprise es- tablished prior to May 13, 2002; (II) funds invested by an employee wel- fare benefit plan or pension plan; and (III) any qualified nonprivate funds (if the investors of the qualified nonprivate funds do not control, directly or indi- rectly, the management, board of direc- tors, general partners, or members of the rural business investment company). (12) Qualified nonprivate funds The term ‘‘qualified nonprivate funds’’ means any— (A) funds directly or indirectly invested in any applicant or rural business investment company on or before May 13, 2002, by any Federal agency, other than the Department of Agriculture, under a provision of law ex- plicitly mandating the inclusion of those funds in the definition of the term ‘‘private capital’’; and (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 instrumen- tality of the State and including any guar- antee extended by those entities) in an ag- gregate amount that does not exceed 33 per- cent of the private capital of the applicant or rural business investment company. (13) Rural business concern The term ‘‘rural business concern’’ means— (A) a public, private, or cooperative for- profit or nonprofit organization; (B) a for-profit or nonprofit business con- trolled by an Indian tribe on a Federal or State reservation or other federally recog- nized Indian tribal group; or (C) any other person or entity; that primarily operates in a rural area, as de- termined by the Secretary. (14) Rural business investment company The term ‘‘rural business investment com- pany’’ means a company that— (A) has been granted final approval by the Secretary under section 2009cc–3(e) of this title; and (B) has entered into a participation agree- ment with the Secretary. (15) Smaller enterprise The term ‘‘smaller enterprise’’ means any rural business concern that, together with its affiliates— (A) has— (i) a net financial worth of not more than $6,000,000, as of the date on which as- sistance is provided under this subchapter to the rural business concern; and (ii) an average net income for the 2-year period preceding the date on which assist- ance is provided under this subchapter to the rural business concern, of not more Page 1217 TITLE 7—AGRICULTURE § 2009cc–3 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 en- terprise level, but is required to pass in- come through to the shareholders, part- ners, beneficiaries, or other equitable own- ers of the business concern, the net income of the business concern shall be deter- mined by allowing a deduction in an amount equal to the total of— (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 with- out 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) in- come taxes calculated under subclause (I), multiplied by the marginal Federal income tax rate that would have applied if the rural business concern were a cor- poration; or (B) satisfies the standard industrial classi- fication size standards established by the Administrator of the Small Business Admin- istration for the industry in which the rural business concern is primarily engaged. (Pub. L. 87–128, title III, § 384A, as added Pub. L. 107–171, title VI, § 6029, May 13, 2002, 116 Stat. 388; amended Pub. L. 115–334, title VI, § 6426(a), Dec. 20, 2018, 132 Stat. 4770.) Editorial Notes REFERENCES IN TEXT This Act, referred to in par. (4)(B), means Pub. L. 87–128, Aug. 8, 1961, 75 Stat. 294, known as the Agricul- tural Act of 1961. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1911 of this title and Tables. AMENDMENTS 2018—Par. (2). Pub. L. 115–334, § 6426(a)(1), struck out ‘‘venture’’ after ‘‘Developmental’’ in heading and after ‘‘ ‘developmental’’ in text. Par. (4). Pub. L. 115–334, § 6426(a)(2), added par. (4) and struck out former par. (4). Prior to amendment, text read as follows: ‘‘The term ‘equity capital’ means com- mon or preferred stock or a similar instrument, includ- ing subordinated debt with equity features.’’ § 2009cc–1. Purposes The purposes of the Rural Business Invest- ment Program established under this subchapter are— (1) to promote economic development and the creation of wealth and job opportunities in rural areas and among individuals living in those areas by encouraging developmental capital investments in smaller enterprises pri- marily located in rural areas; and (2) to establish a developmental capital pro- gram, with the mission of addressing the unmet equity investment needs of small enter- prises located in rural areas, by authorizing the Secretary— (A) to enter into participation agreements with rural business investment companies; (B) to guarantee debentures of rural busi- ness investment companies to enable each rural business investment company to make developmental capital investments in small- er enterprises in rural areas; and (C) to make grants to rural business in- vestment companies, and to other entities, for the purpose of providing operational as- sistance to smaller enterprises financed, or expected to be financed, by rural business in- vestment companies. (Pub. L. 87–128, title III, § 384B, as added Pub. L. 107–171, title VI, § 6029, May 13, 2002, 116 Stat. 391; amended Pub. L. 115–334, title VI, § 6426(b), Dec. 20, 2018, 132 Stat. 4770.) Editorial Notes AMENDMENTS Par. (1). Pub. L. 115–334, § 6426(b)(1), struck out ‘‘ven- ture’’ before ‘‘capital investments’’. Par. (2). Pub. L. 115–334, § 6426(b)(2)(A), struck out ‘‘venture’’ before ‘‘capital program’’ in introductory provisions. Par. (2)(B). Pub. L. 115–334, § 6426(b)(2)(B), struck out ‘‘venture’’ before ‘‘capital investments’’. § 2009cc–2. Establishment In accordance with this subchapter, the Sec- retary shall establish a Rural Business Invest- ment Program, under which the Secretary may— (1) enter into participation agreements with companies granted final approval under sec- tion 2009cc–3(e) of this title for the purposes set forth in section 2009cc–1 of this title; (2) guarantee the debentures issued by rural business investment companies as provided in section 2009cc–4 of this title; and (3) make grants to rural business investment companies, and to other entities, under sec- tion 2009cc–7 of this title. (Pub. L. 87–128, title III, § 384C, as added Pub. L. 107–171, title VI, § 6029, May 13, 2002, 116 Stat. 391.) § 2009cc–3. Selection of rural business investment companies (a) Eligibility A company shall be eligible to apply to par- ticipate, as a rural business investment com- pany, in the program established under this sub- chapter if— (1) the company is a newly formed for-profit entity or a newly formed for-profit subsidiary of such an entity; (2) the company has a management team with experience in community development fi- nancing or relevant venture capital financing; and (3) the company will invest in enterprises that will create wealth and job opportunities in rural areas, with an emphasis on smaller enterprises. (b) Application To participate, as a rural business investment company, in the program established under this