A committee of the Massachusetts State Senate last week approved an amended version of the "selective purchase" bill, which would bar state agencies from contracting with companies conducting business in South Africa.

But the Senate Ways and Means Committee removed the first section of the version approved by the House over the summer. That section set a definition of what constitutes business in South Africa.

Such a law, if passed in its original form, would prohibit the state from doing business with American companies that have investments in South Africa. The law, which would be the first of its kind in the country, also terminates existing state contracts with such firms.

"We're trying to impact the kinds of [business] relationships that continue to bring money into South Africa," said Larry Kraus, an aide to State Rep. Saundra M. Graham (D-Cambridge), who sponsored the legislation. "They're still paying corporate taxes to the government," which controls apartheid.

Kraus said the first section of the bill, which the Senate committee rejected, included strict definitions of what constitutes business in South Africa and Namibia. Without that section, such a law would be less enforceable as it must rely on interpretations by state enforcement agencies to define business in South Africa.

"[The bill] could pass in the present from that it's in," said Lee Farris, South Africa coordinator of Mobilization for Survival, a multi-issue peace and justice organization. "But we would also like to see the bill return to its original language."

The first section prevents misinter-pretation of the rest of the bill, said Farris. "When you make a law, you want it to last forever," she said.

Proponents of the bill may hold a floor fight to replace the original wording of the bill, Kraus said.

According to Kraus, many companies undergo a "pseudo-divestment," in which they pull out only their most public investments in South Africa. However, he said, these companies continue to have economic ties with the country. They continue to have licensing agreements, in which they sell their names, franchising agreements, and contracts of assured supply, he said.

"Many companies say that they have severed their South African connections, but they have not," Farris said. "The point of this legislature is to affect the large number of companies who have tried to give a face lift to their businesses. Any company that profits from South Africa is supporting apartheid."

The companies that could be affected by the bill argue that they should be permitted to continue contractual arrangements in South Africa.

"We agree with the intent of the sponsors," said Fred P. McNeese, IBM spokesman.