[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2131 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2131

 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 SENATE OF THE UNITED STATES

                             July 16, 2019

 Mr. Coons (for himself, Mr. Scott of South Carolina, Mr. Gardner, and 
  Ms. Rosen) introduced the following bill; which was read twice and 
    referred to the Committee on Small Business and Entrepreneurship

_______________________________________________________________________

                                 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 
                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.
                                 <all>