Snowe Job

The Senate reconsiders a bid to draw capital to small companies.

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Legislation

Sen. Olympia Snowe is hoping the second time's the charm. The chairwoman of the Senate Committee on Small Business has reintroduced a bill she believes will increase loans from small business investment companies (SBICs) to small companies. SBICs are SBA-regulated venture capital groups that invest in original debt or equities securities. But because those SBICs that invest in debt (debenture SBICs) create taxable income, many potential tax-exempt investors have stayed away. The bill -- called the Small Business Investment Company Capital Access Act of 2003 -- would change all that, allowing tax-exempt organizations, pension funds, and university endowment funds to invest in SBICs tax-free and without accompanying accounting headaches. The National Association of Small Business Investment Companies says the bill could attract $200 million a year in new funds to debenture SBICs, which would make $250,000 to $1.5 million individual loans to small companies. This time around, passage looks promising. Snowe's co-sponsor on the bill is Chuck Grassley, who this summer will try to push the bill through the Senate Finance Committee, which he chairs.

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