1. Calculation of leverage of small business investment companies that invest in SBIR or STTR participants Section 303(b)(2) of the Small Business Investment Act of 1958 ( 15 U.S.C. 683(b)(2) ) is amended by adding at the end the following new subparagraph: (E) Investments in SBIR and STTR participants (i) In general Subject to clause (ii), in calculating the outstanding leverage of a company for purposes of subparagraph (A), the Administrator shall exclude the amount of any investment made in an SBIR or STTR participant, if such investment is made in the first fiscal year after the date of enactment of this subparagraph or any fiscal year thereafter by a company licensed in the applicable fiscal year. (ii) Limitations (I) Amount of exclusion The amount excluded under clause (i) for a company shall not exceed 33 percent of the private capital of that company. (II) Maximum investment A company shall not make an investment in any one SBIR or STTR participant in an amount equal to more than 20 percent of the private capital of that company. (III) Other terms The exclusion of amounts under clause (i) shall be subject to such terms as the Administrator may impose to ensure that there is no cost (as that term is defined in section 502 of the Federal Credit Reform Act of 1990 ( 2 U.S.C. 661a )) with respect to purchasing or guaranteeing any debenture involved. (iii) Definitions In this subsection, the term SBIR or STTR participant means a small business concern that receives contracts or grants pursuant to section 9 of the Small Business Act. . 2. Inclusion of small business investment companies in SBIR and STTR Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— (1) by striking or private equity firm investment each place such term appears and inserting private equity firm, or SBIC investment ; (2) by striking or private equity firms and inserting private equity firms, or SBICs ; (3) in subsection (e)— (A) in paragraph (12)(B), by striking and at the end