[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3730 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 3730
To amend the Small Business Act and the Small Business Investment Act
of 1958 to increase access to capital for small business concerns that
are manufacturers.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 11, 2019
Mr. Ryan (for himself and Mr. Reed) introduced the following bill;
which was referred to the Committee on Small Business, and in addition
to the Committee on Science, Space, and Technology, for a period to be
subsequently determined by the Speaker, in each case for consideration
of such provisions as fall within the jurisdiction of the committee
concerned
_______________________________________________________________________
A BILL
To amend the Small Business Act and the Small Business Investment Act
of 1958 to increase access to capital for small business concerns that
are manufacturers.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Strengthening Investment to Grow
Manufacturing in America Act''.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Manufacturers contributed over $2,330,000,000,000 to
the United States economy in the first quarter of 2018 and
accounted for 12 percent of United States gross domestic
product in 2017.
(2) Manufacturing is one of the most important sectors of
the United States economy with respect to employment. In 2013,
the manufacturing sector supported over 17,000,000 indirect
jobs in the United States, in addition to the 12,000,000
individuals who were directly employed in manufacturing.
Combined, these indirect and direct manufacturing jobs
represented more than 20 percent of United States employment in
2013--more than any other sector.
(3) While the United States has added over 14,000,000 non-
farm jobs since 2010, manufacturing job growth has lagged and
added only approximately 900,000 jobs. Post-recession job
recovery averages since the 1940s indicate that another
1,200,000 manufacturing jobs should have been created during
this period.
(4) Small manufacturers are the backbone of the United
States manufacturing industry, accounting for nearly half of
all manufacturing jobs in the United States. Ensuring that
small manufacturers have adequate access to capital is critical
to creating manufacturing jobs and the growth of the United
States economy.
(5) The 2015 Federal Reserve Small Business Credit Survey
indicates that of the 52 percent of manufacturers that applied
for financing during the survey period, 65 percent did so to
expand their business or to pursue a new business opportunity.
The survey also indicates that 42 percent of manufacturers
received less financing than they requested, the primary result
of which was delayed expansion of their business.
(6) The loan guarantee programs of the Small Business
Administration under section 7(a) of the Small Business Act (15
U.S.C. 636(a)) and title V of the Small Business Investment Act
of 1958 (15 U.S.C. 695 et seq.) encourage lenders to provide
loans to creditworthy small businesses that would not otherwise
obtain financing on reasonable terms and conditions and can
serve as an excellent mechanism by which to increase the
availability of affordable credit to small manufacturers in the
United States.
SEC. 3. SMALL MANUFACTURERS.
(a) Loan Guarantee Percentage.--Section 7(a)(2) of the Small
Business Act (15 U.S.C. 636(a)(2)) is amended--
(1) in subparagraph (A), in the matter preceding clause
(i), by striking ``and (E)'' and inserting ``(E), and (F)'';
and
(2) by adding at the end the following:
``(F) Participation for manufacturers.--
``(i) In general.--In an agreement to
participate in a loan on a deferred basis under
this subsection for a small business concern
assigned to a North American Industry
Classification System code for manufacturing or
that is designated by the Administrator under
clause (ii), the participation by the
Administration shall be 90 percent.
``(ii) Addition of advanced manufacturing
sectors.--After submitting notice to the
Committee on Small Business and
Entrepreneurship of the Senate and the
Committee on Small Business of the House of
Representatives, the Administrator may
designate a North American Industry
Classification System code for purposes of
clause (i) if the Administrator determines the
code--
``(I) is not a manufacturing code
under the North American Industry
Classification System; and
``(II) corresponds to a sector in
which manufacturing is a considerable
component of the operations of a small
business concern, as determined by the
Administrator, including advanced
manufacturing.''.
(b) Guarantee Fee Reduction.--Section 7(a)(18) of the Small
Business Act (15 U.S.C. 636(a)(18)) is amended--
(1) in subparagraph (A), by striking ``With respect'' and
inserting ``Except as provided in subparagraph (C), with
respect''; and
(2) by adding at the end the following:
``(C) Manufacturers.--
``(i) In general.--Subject to clause (ii),
with respect to a loan guaranteed under this
subsection for a small business concern
described in paragraph (2)(F)(i)--
``(I) the Administration may not
collect a guarantee fee under this
paragraph for a loan of not more than
$350,000; and
``(II) for a loan of more than
$350,000, the Administration shall
collect a guarantee fee under this
paragraph equal to 50 percent of the
guarantee fee that the Administration
would otherwise collect for the loan.
``(ii) Exception.--The requirements of
clause (i) shall not apply to loans made during
a fiscal year if--
``(I) the budget of the President
for that fiscal year, submitted to
Congress under section 1105(a) of title
31, United States Code, includes a cost
for the program established under this
subsection that is above zero; and
``(II) the Administrator submits to
Congress--
``(aa) notice regarding the
determination of cost described
in subclause (I); and
``(bb) a detailed
discussion indicating why not
implementing clause (i) will
cause the cost of the program
established under this
subsection to be not more than
zero.''.
(c) Certified Development Company Loans.--
(1) Manufacturing loan amount.--Section 502(2)(A)(iii) of
the Small Business Investment Act of 1958 (15 U.S.C.
696(2)(A)(iii)) is amended by striking ``$5,500,000'' and
inserting ``10,000,000''.
(2) Contribution requirement.--Section 502(3)(C) of the
Small Business Investment Act of 1958 (15 U.S.C. 696(3)(C)) is
amended--
(A) in clause (iii), by striking ``or'' at the end;
(B) by redesignating clause (iv) as clause (v); and
(C) by inserting after clause (iii) the following:
``(iv) for a small manufacturer (as defined
in section 501(e)(7))--
``(I) at least 5 percent of the
total cost of the project financed, if
the small business concern has been in
operation for a period of 2 years or
less;
``(II) at least 5 percent of the
total cost of the project financed, if
the project involves a limited or
single purpose building or structure;
``(III) at least 10 percent of the
total cost of the project financed if
the project involves both of the
conditions set forth in subclauses (I)
and (II); or
``(IV) at least 5 percent of the
total cost of the project financed, in
all other circumstances, at the
discretion of the development company;
or''.
(3) Creation or retention of jobs requirement.--Section
501(e) of the Small Business Investment Act of 1958 (15 U.S.C.
695(e)) is amended--
(A) in paragraph (1), by striking ``creates or
retains'' and all that follows and inserting ``creates
or retains 1 job for every $75,000 guaranteed by the
Administration, except that the amount is $150,000 in
the case of a project of a small manufacturer.'';
(B) in paragraph (2), by striking ``creates or
retains'' and all that follows and inserting ``creates
or retains 1 job for every $75,000 guaranteed by the
Administration, except that the amount is $150,000 in
the case of a project of a small manufacturer.'';
(C) by redesignating paragraph (6) as paragraph
(7); and
(D) by inserting after paragraph (5) the following:
``(6) For a loan for a project directed toward the creation of job
opportunities under subsection (d)(1), the Administrator shall publish
on the website of the Administration the number of jobs created or
retained under the project as of the date that is 2 years after the
completion (as determined based on information provided by the
development company) of the project.''.
(4) Building occupancy.--Section 502(5) of the Small
Business Investment Act of 1958 (15 U.S.C. 696(5)), is
amended--
(A) by striking ``In addition'' and inserting the
following:
``(A) In general.--Except as provided in
subparagraph (B), in addition''; and
(B) by adding at the end the following:
``(B) Exception.--With respect to an assisted small
business that is a small manufacturer (as defined in
section 501(e)(7)), the small manufacturer may lease
not more than 49 percent of the project to 1 or more
other tenants, if the small manufacturer occupies
permanently and uses not less than a total of 51
percent of the space in the project after the execution
of any leases authorized under this section, without
regard to whether the project is with respect to an
existing building or new construction.''.
(5) Collateral requirements.--Section 502(3)(E)(i) of the
Small Business Investment Act of 1958 (15 U.S.C. 696(3)(E)(i)),
is amended by adding at the end the following: ``Additional
collateral shall not be required in the case of a small
manufacturer (as defined in section 501(e)(7)).''.
(6) Debt refinancing.--Section 502(7)(B) of the Small
Business Investment Act of 1958 (15 U.S.C. 696(7)(B)) is
amended in the matter preceding clause (i) by inserting ``(or
in the case of a small manufacturer (as defined in section
501(e)(7)) that does not exceed 100 percent of the project cost
of the expansion)'' after ``cost of the expansion''.
(7) Amount of guaranteed debenture.--Section 503(a) of the
Small Business Investment Act of 1958 (15 U.S.C. 697(a)) is
amended by adding at the end the following:
``(5) Any debenture issued by a State or local development company
to a small manufacturer (as defined in section 501(e)(7)) with respect
to which a guarantee is made under this subsection shall be in an
amount equal to not more than 50 percent of the cost of the project
with respect to which such debenture is issued, without regard to
whether good cause has been shown.''.
(d) Manufacturing Debentures.--
(1) In general.--Section 303 of the Small Business
Investment Act of 1958 (15 U.S.C. 683) is amended by adding at
the end the following:
``(l) Manufacturing Debentures.--In addition to any other authority
under this Act, on and after the first day of the first fiscal year
beginning after the date of enactment of this subsection, a small
business investment company may issue manufacturing debentures.''.
(2) Definitions.--Section 103 of the Small Business
Investment Act of 1958 (15 U.S.C. 662) is amended--
(A) in paragraph (19), by striking ``and'' at the
end;
(B) in paragraph (20), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following:
``(21) the term `manufacturing debenture' means a deferred
interest debenture that--
``(A) is issued at a discount;
``(B) has a 5-year maturity or a 10-year maturity;
``(C) requires no interest payment or annual charge
for the first 5 years;
``(D) is restricted to companies assigned to a
North American Industry Classification System code for
manufacturing; and
``(E) is issued at no cost (as defined in section
502 of the Credit Reform Act of 1990 (2 U.S.C. 661a))
with respect to purchasing and guaranteeing the
debenture.''.
(3) Startup small manufacturers.--Section 502(3)(C)(i) of
the Small Business Investment Act of 1958 (15 U.S.C.
696(3)(C)(i)) is amended by inserting ``is not a small
manufacturer (as defined in section 501(e)(7)) and'' after
``small business concern''.
(e) Additional Leverage for Manufacturers.--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:
``(E) Additional leverage base on investment in
manufacturers.--
``(i) Definition.--In this subparagraph,
the term `covered small manufacturer' means a
small manufacturer (as defined in section
501(e)(7)) that--
``(I) is located in a low or
moderate income geographic area;
``(II) is not less than 51 percent
owned by 1 or more veterans (as defined
in section 101 of title 38, United
States Code);
``(III) is not less than 51 percent
owned by 1 or more socially
disadvantaged individuals or
economically disadvantaged individuals
(within the meaning given such terms
under section 8(a) of the Small
Business Act (15 U.S.C. 637(a)));
``(IV) is not less than 51 percent
owned by 1 or more women;
``(V) is located in an area with
above average unemployment;
``(VI) is a smaller business
concern described in subparagraph (A)
of section 103(12);
``(VII) is located in a rural area;
``(VIII) has increased its full
time employment by not less than 25
percent (not including any new
employees added by an acquisition)
since the small manufacturer receiving
an initial financing under this title;
or
``(IX) is engaged in researching,
developing, or manufacturing
technologies important to national
security.
``(ii) Exclusion of amounts.--In
calculating the outstanding leverage of a
company for purposes of subparagraphs (A) and
(B), the Administrator shall exclude the amount
of leverage outstanding to covered small
manufacturers, not to exceed a total of
$50,000,000.''.
SEC. 4. ASSISTANCE FOR SMALL MANUFACTURERS.
(a) Assistance Through SBA Programs.--
(1) Amendments to the small business act.--The Small
Business Act (15 U.S.C. 631 et seq.) is amended--
(A) in section 7(a) (15 U.S.C. 636(a)), by adding
at the end the following:
``(36) Assistance for small manufacturers.--The
Administrator shall ensure that each district office of the
Administration partners with not less than 1 resource partner
of the Administration, including a small business development
center, a women's business center described in section 29, the
Service Corps of Retired Executives, and a Veteran Business
Outreach Center, to provide training to small business concerns
described in paragraph (2)(F)(i) in obtaining assistance under
the programs under this subsection and title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.),
including with respect to the application process under such
programs and partnering with participating lenders under this
subsection.'';
(B) in section 8 (15 U.S.C. 637), by striking
subsection (c) and inserting the following:
``(c) Assistance for Small Manufacturers in SCORE and Small
Business Development Center Programs.--
``(1) Definition.--In this subsection, the term `SCORE
program' means the Service Corps of Retired Executives
authorized under subsection (b)(1)(B).
``(2) Volunteers.--Under the SCORE program, the
Administrator may recruit volunteers to assist small business
concerns described in section 7(a)(2)(F)(i) in obtaining
assistance under section 7(a) and title V of the Small Business
Investment Act of 1958 (15 U.S.C. 695 et seq.), including with
respect to the application process under such programs and
partnering with participating lenders under such section
7(a).'';
(C) in section 21(c)(3) (15 U.S.C. 648(c)(3))--
(i) in subparagraph (T), by striking
``and'' at the end;
(ii) in the first subparagraph designated
as subparagraph (U), as added by section 862 of
division A of the John S. McCain National
Defense Authorization Act for Fiscal Year 2019
(Public Law 115-232), by striking the period at
the end and inserting a semicolon;
(iii) by redesignating the second
subparagraph designated as subparagraph (U), as
added by section 5 of the Small Business
Innovation Protection Act of 2017 (Public Law
115-259; 132 Stat. 3665), as subparagraph (V);
(iv) in subparagraph (V), as so
redesignated, by striking the period at the end
and inserting ``; and''; and
(v) by adding at the end the following:
``(W) providing training to small business concerns
described in section 7(a)(2)(F)(i) in obtaining
assistance under section 7(a) and title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et
seq.), including with respect to the application
process under such programs and partnering with
participating lenders under such section 7(a).'';
(D) in section 29(b) (15 U.S.C. 656(b))--
(i) in paragraph (2), by striking ``and''
at the end;
(ii) in paragraph (3), by striking the
period at the end and inserting ``; and''; and
(iii) by adding at the end the following:
``(4) training to small business concerns owned and
controlled by women that are small business concerns described
in section 7(a)(2)(F)(i) in obtaining assistance under section
7(a) and title V of the Small Business Investment Act of 1958
(15 U.S.C. 695 et seq.), including with respect to the
application process under such programs and partnering with
participating lenders under such section 7(a).''; and
(E) in section 32 (15 U.S.C. 657b), by adding at
the end the following:
``(h) Assistance for Small Manufacturers.--The Associate
Administrator shall ensure that Veterans Business Outreach Centers
assist small business concerns described in section 7(a)(2)(F)(i) in
obtaining assistance under section 7(a) and title V of the Small
Business Investment Act of 1958 (15 U.S.C. 695 et seq.), including with
respect to the application process under such programs and partnering
with participating lenders under such section 7(a).''.
(2) Amendments to the small business investment act of
1958.--Title V of the Small Business Investment Act of 1958 (15
U.S.C. 695 et seq.) is amended by adding at the end the
following:
``SEC. 511. ASSISTANCE FOR SMALL MANUFACTURERS.
``The Administrator shall ensure that each district office of the
Administration partners with not less than 1 resource partner of the
Administration, including a small business development center described
in section 21 of the Small Business Act (15 U.S.C. 648), a women's
business center described in section 29 of the Small Business Act (15
U.S.C. 656), the Service Corps of Retired Executives, and a Veteran
Business Outreach Center, to provide training to small business
concerns described in section 7(a)(2)(F)(i) of the Small Business Act
(15 U.S.C. 636(a)(2)(F)(i)) in obtaining assistance under the program
carried out under this title, including with respect to the application
process under that program and partnering with development companies
under this title.''.
(b) Partnering With NIST.--The Small Business Administration and
its resource partners may establish partnerships with the Hollings
Manufacturing Extension Partnership Program of the National Institute
of Standards and Technology and its affiliated centers to facilitate
outreach to small manufacturers in providing training and guidance with
respect to the application process for loans guaranteed by the
Administration.
SEC. 5. FEDERAL LOAN GUARANTEES FOR INNOVATIVE TECHNOLOGIES IN
MANUFACTURING.
(a) Transfer of Existing Program.--The Stevenson-Wydler Technology
Innovation Act of 1980 (15 U.S.C. 3701 et seq.) is amended--
(1) by striking section 26 (15 U.S.C. 3721); and
(2) by redesignating sections 27 and 28 (15 U.S.C. 3722 and
3723) as sections 26 and 27, respectively.
(b) Authority of SBA.--
(1) Definitions.--In this subsection--
(A) the term ``Administrator'' means the
Administrator of the Small Business Administration;
(B) the term ``business loan programs of the
Administration'' means the programs under section 7(a)
of the Small Business Act (15 U.S.C. 636(a)) and title
V of the Small Business Investment Act of 1958 (15
U.S.C. 695 et seq.); and
(C) the term ``small manufacturer'' means a small
business concern described in section 7(a)(2)(F)(i) of
the Small Business Act, as amended by this Act.
(2) Authorization.--To the extent the Administrator
determines that the assistance available to small manufacturers
under section 26 of the Stevenson-Wydler Technology Innovation
Act of 1980 (15 U.S.C. 3721), as in effect on the day before
the date of enactment of this Act, is not available under the
business loan programs of the Administration, the Administrator
shall ensure that the business loan programs of the
Administration provide adequate support for innovative
technologies in manufacturing.
(3) Reporting.--The Administrator shall submit to the
Committee on Small Business and Entrepreneurship of the Senate
and the Committee on Small Business of the House of
Representatives a report regarding any determination or
activity of the Administrator under paragraph (2).
(c) Savings Clause.--Any loan guarantee issued under section 26 of
the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C.
3721), as in effect on the day before the date of enactment of this
Act, shall remain in full force and effect under the terms, and for the
duration, of the loan guarantee agreement.
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