[Congressional Record Volume 167, Number 88 (Thursday, May 20, 2021)]
[Senate]
[Pages S3219-S3221]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 1753. Mr. RUBIO (for himself and Mr. Risch) submitted an amendment 
intended to be proposed by him to the bill S. 1260, to establish a new 
Directorate for Technology and Innovation in the National Science 
Foundation, to establish a regional technology hub program, to require 
a strategy and report on economic security, science, research, 
innovation, manufacturing, and job creation, to establish a critical 
supply chain resiliency program, and for

[[Page S3220]]

other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. ___. SMALL BUSINESS INVESTMENT COMPANY PROGRAM.

       (a) In General.--Part A of title III of the Small Business 
     Investment Act of 1958 (15 U.S.C. 681 et seq.) is amended--
       (1) in section 302(a) (15 U.S.C. 682(a))--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``or'' at the end;
       (ii) in subparagraph (B), by striking the period at the end 
     and inserting ``; or''; and
       (iii) by adding at the end the following:
       ``(C) $20,000,000, adjusted every 5 years for inflation, 
     with respect to each licensee authorized or seeking authority 
     to sell bonds to Administration as a participating investment 
     company under section 321.''; and
       (2) by adding at the end the following:

     ``SEC. 321. SMALL BUSINESS AND DOMESTIC PRODUCTION RECOVERY 
                   INVESTMENT FACILITY.

       ``(a) Definitions.--In this section:
       ``(1) Eligible small business concern.--The term `eligible 
     small business concern'--
       ``(A) means a small business concern that is a 
     manufacturing business that is assigned a North American 
     Industry Classification System code beginning with 31, 32, or 
     33 at the time at which the small business concern receives 
     an investment from a participating investment company under 
     the facility; and
       ``(B) does not include an entity described in section 
     7(a)(37)(A)(iv)(III) of the Small Business Act (15 U.S.C. 
     636(a)(37)(A)(iv)(III)).
       ``(2) Facility.--The term `facility' means the facility 
     established under subsection (b).
       ``(3) Fund.--The term `Fund' means the fund established 
     under subsection (h).
       ``(4) Participating investment company.--The term 
     `participating investment company' means a small business 
     investment company approved under subsection (d) to 
     participate in the facility.
       ``(5) Protege investment company.--The term `protege 
     investment company' means a small business investment company 
     that--
       ``(A) is majority managed by new, inexperienced, or 
     otherwise underrepresented fund managers; and
       ``(B) elects and is selected by the Administration to 
     participate in the pathway-protege program under subsection 
     (g).
       ``(6) Small business concern.--The term `small business 
     concern' has the meaning given the term in section 3(a) of 
     the Small Business Act (15 U.S.C. 632(a)).
       ``(b) Establishment.--
       ``(1) Facility.--The Administrator shall establish and 
     carry out a facility to increase resiliency in the 
     manufacturing supply chain of eligible small business 
     concerns by providing financial assistance to participating 
     investment companies that facilitate equity financings to 
     eligible small business concerns in accordance with this 
     section.
       ``(2) Administration of facility.--The facility shall be 
     administered by the Administrator acting through the 
     Associate Administrator described in section 201.
       ``(c) Applications.--
       ``(1) In general.--Any small business investment company 
     may submit to the Administrator an application to participate 
     in the facility.
       ``(2) Requirements for application.--An application to 
     participate in the facility shall include the following:
       ``(A) A business plan describing how the applicant intends 
     to make successful equity investments in eligible small 
     business concerns.
       ``(B) Information regarding the relevant investment 
     qualifications and backgrounds of the individuals responsible 
     for the management of the applicant.
       ``(C) A description of the extent to which the applicant 
     meets the selection criteria under subsection (d)(2).
       ``(3) Exceptions to application for new licensees.--Not 
     later than 90 days after the date of enactment of this 
     section, the Administrator shall reduce requirements for 
     applicants applying to operate as a participating investment 
     company under this section in order to encourage the 
     participation of new small business investment companies in 
     the facility under this section, which may include the 
     requirements established under part 107 of title 13, Code of 
     Federal Regulations, or any successor regulation, relating 
     to--
       ``(A) the approval of initial management expenses;
       ``(B) the management ownership diversity requirement;
       ``(C) the disclosure of general compensatory practices and 
     fee structures; or
       ``(D) any other requirement that the Administrator 
     determines to be an obstacle to achieving the purposes 
     described in this paragraph.
       ``(d) Selection of Participating Investment Companies.--
       ``(1) Determination.--
       ``(A) In general.--Except as provided in paragraph (3), not 
     later than 60 days after the date on which the Administrator 
     receives an application under subsection (c), the 
     Administrator shall--
       ``(i) make a final determination to approve or disapprove 
     such applicant to participate in the facility; and
       ``(ii) transmit the determination to the applicant in 
     writing.
       ``(B) Commitment amount.--Except as provided in paragraph 
     (3), at the time of approval of an applicant, the 
     Administrator shall make a determination of the amount of the 
     commitment that may be awarded to the applicant under this 
     section.
       ``(2) Selection criteria.--In making a determination under 
     paragraph (1), the Administrator shall consider--
       ``(A) the probability that the investment strategy of the 
     applicant will successfully repay any financial assistance 
     provided by the Administration, including the probability of 
     a return significantly in excess thereof;
       ``(B) the probability that the investments made by the 
     applicant will--
       ``(i) provide capital to eligible small business concerns; 
     or
       ``(ii) create or preserve jobs in the United States;
       ``(C) the probability that the applicant will meet the 
     objectives in the business plan of the applicant, including 
     the financial goals, and, if applicable, the pathway-protege 
     program in accordance with subsection (g); and
       ``(D) the probability that the applicant will assist 
     eligible small business concerns in achieving profitability.
       ``(3) Approval of participating investment companies.--
       ``(A) Provisional approval.--
       ``(i) In general.--Notwithstanding paragraph (1), with 
     respect to an application submitted by an applicant to 
     operate as a participating investment company under this 
     section, the Administrator may provide provisional approval 
     for the applicant in lieu of a final determination of 
     approval and determination of the amount of the commitment 
     under that paragraph.
       ``(ii) Purpose.--The purpose of a provisional approval 
     under clause (i) is to--

       ``(I) encourage applications from investment companies with 
     an investment mandate from the committed private market 
     capital of the investment company that does not conform to 
     the requirements described in this section at the time of 
     application;
       ``(II) allow the applicant to more effectively raise 
     capital commitments in the private markets by referencing the 
     intent of the Administrator to award the applicant a 
     commitment; and
       ``(III) allow the applicant to more precisely request the 
     desired amount of commitment pending the securing of capital 
     from private market investors.

       ``(iii) Limit on period of the time.--The period between a 
     provisional approval under clause (i) and the final 
     determination of approval under paragraph (1) shall not 
     exceed 12 months.
       ``(e) Commitments and SBIC Bonds.--
       ``(1) In general.--The Administrator may, out of amounts 
     available in the Fund, purchase or commit to purchase from a 
     participating investment company 1 or more accruing bonds 
     that include equity features as described in this subsection.
       ``(2) Bond terms.--A bond purchased by the Administrator 
     from a participating investment company under this subsection 
     shall have the following terms and conditions:
       ``(A) Term and interest.--
       ``(i) In general.--The bond shall be issued for a term of 
     not less than 15 years and shall bear interest at a rate 
     determined by the Administrator of not more than 2 percent.
       ``(ii) Accrual of interest.--Interest on the bond shall 
     accrue and shall be payable in accordance with subparagraph 
     (D).
       ``(iii) Prepayment.--The bond shall be prepayable without 
     penalty after the end of the 1-year period beginning on the 
     date on which the bond was purchased.
       ``(B) Profits.--
       ``(i) In general.--The Administration shall be entitled to 
     receive a share of the profits net of any profit sharing 
     performance compensation of the participating investment 
     company equal to the quotient obtained by dividing--

       ``(I) one-third of the commitment that the participating 
     investment company is approved for under subsection (d); by
       ``(II) the commitment approved under subsection (d) plus 
     the regulatory capital of the participating investment 
     company at the time of approval under that subsection.

       ``(ii) Determination of percentage.--The share to which the 
     Administration is entitled under clause (i)--

       ``(I) shall be determined at the time of approval under 
     subsection (d); and
       ``(II) without the approval of the Administration, shall 
     not be revised, including to reflect subsequent distributions 
     of profits, returns of capital, or repayments of bonds, or 
     otherwise.

       ``(C) Profit sharing performance compensation.--
       ``(i) Receipt by administration.--The Administration shall 
     receive a share of profits of not more than 2 percent, which 
     shall be deposited into the Fund and be available to make 
     commitments under this subsection.
       ``(ii) Receipt by managers.--The managers of the 
     participating investment company may receive a maximum profit 
     sharing performance compensation of 25 percent minus the 
     share of profits paid to the Administration under clause (i).
       ``(D) Prohibition on distributions.--No distributions on 
     capital, including profit distributions, shall be made by the 
     participating investment company to the investors or managers 
     of the participating investment company until the 
     Administration has received payment of all accrued interest 
     on the bond committed under this section.
       ``(E) Repayment of principal.--Except as described in 
     subparagraph (F), repayments of principal of the bond of a 
     participating investment company shall be--

[[Page S3221]]

       ``(i) made at the same time as returns of private capital; 
     and
       ``(ii) in amounts equal to the pro rata share of the 
     Administration of the total amount being repaid or returned 
     at such time.
       ``(F) Liquidation or default.--Upon any liquidation event 
     or default, as defined by the Administration, any unpaid 
     principal or accrued interest on the bond shall--
       ``(i) have a priority over all equity of the participating 
     investment company; and
       ``(ii) be paid before any return of equity or any other 
     distributions to the investors or managers of the 
     participating investment company.
       ``(3) Amount of commitments and purchases.--
       ``(A) Maximum amount.--The maximum amount of outstanding 
     bonds and commitments to purchase bonds for any participating 
     investment company under the facility shall be the lesser 
     of--
       ``(i) twice the amount of the regulatory capital of the 
     participating investment company; or
       ``(ii) $200,000,000.
       ``(4) Commitment process.--Commitments by the 
     Administration to purchase bonds under the facility shall 
     remain available to be sold by a participating investment 
     company until the end of the fourth fiscal year following the 
     year in which the commitment is made, subject to review and 
     approval by the Administration based on regulatory 
     compliance, financial status, change in management, deviation 
     from business plan, and such other limitations as may be 
     determined by the Administration by regulation or otherwise.
       ``(5) Commitment conditions.--
       ``(A) In general.--As a condition of receiving a commitment 
     under the facility, not less than 50 percent of amounts 
     invested by the participating investment company shall be 
     invested in eligible small business concerns.
       ``(B) Examinations.--In addition to the matters set forth 
     in section 310(c), the Administration shall examine each 
     participating investment company in such detail so as to 
     determine whether the participating investment company has 
     complied with the requirements under this subsection.
       ``(f) Distributions and Fees.--
       ``(1) Distribution requirements.--
       ``(A) Distributions.--As a condition of receiving a 
     commitment under the facility, a participating investment 
     company shall make all distributions to the Administrator in 
     the same form and in a manner as are made to investors, or 
     otherwise at a time and in a manner consistent with 
     regulations or policies of the Administration.
       ``(B) Allocations.--A participating investment company 
     shall make allocations of income, gain, loss, deduction, and 
     credit to the Administrator with respect to any outstanding 
     bonds as if the Administrator were an investor.
       ``(2) Fees.--The Administrator may not charge fees for 
     participating investment companies other than examination 
     fees that are consistent with the license of the 
     participating investment company.
       ``(3) Bifurcation.--Losses on bonds issued by participating 
     investment companies shall not be offset by fees or any other 
     charges on debenture small business investment companies.
       ``(g) Protege Program.--The Administrator shall establish a 
     pathway-protege program in which a protege investment company 
     may receive technical assistance and program support from a 
     participating investment company on a voluntary basis and 
     without penalty for non-participation.
       ``(h) Loss Limiting Fund.--
       ``(1) In general.--There is established in the Treasury a 
     fund for making commitments and purchasing bonds with equity 
     features under the facility and receiving capital returned by 
     participating investment companies.
       ``(2) Use of funds.--Amounts appropriated to the Fund or 
     deposited in the Fund under paragraph (3) shall be available 
     to the Administrator, without further appropriation, for 
     making commitments and purchasing bonds under the facility 
     and expenses and payments, excluding administrative expenses, 
     relating to the operations of the Administrator under the 
     facility.
       ``(3) Depositing of amounts.--
       ``(A) In general.--All amounts received by the 
     Administrator from a participating investment company 
     relating to the facility, including any moneys, property, or 
     assets derived by the Administrator from operations in 
     connection with the facility, shall be deposited in the Fund.
       ``(B) Period of availability.--Amounts deposited under 
     subparagraph (A) shall remain available until expended.
       ``(i) Application of Other Sections.--To the extent not 
     inconsistent with requirements under this section, the 
     Administrator may apply sections 309, 311, 312, 313, and 314 
     to activities under this section and an officer, director, 
     employee, agent, or other participant in a participating 
     investment company shall be subject to the requirements under 
     such sections.
       ``(j) Authorization of Appropriations.--There is authorized 
     to be appropriated for the first fiscal year beginning after 
     the date of enactment of this part $10,000,000,000 to carry 
     out the facility. Amounts appropriated pursuant to this 
     subsection shall remain available until the end of the second 
     fiscal year beginning after the date of enactment of this 
     section.''.
       (b) Approval of Bank-Owned, Non-Leveraged Applicants.--
     Section 301(c)(2) of the Small Business Investment Act of 
     1958 (15 U.S.C. 681(c)(2)) is amended--
       (1) in subparagraph (B), in the matter preceding clause 
     (i), by striking ``Within'' and inserting ``Except as 
     provided in subparagraph (C), within''; and
       (2) by adding at the end the following:
       ``(C) Exception for bank-owned, non-leveraged applicants.--
     Notwithstanding subparagraph (B), not later than 45 days 
     after the date on which the Administrator receives a 
     completed application submitted by a bank-owned, non-
     leveraged applicant in accordance with this subsection and in 
     accordance with such requirements as the Administrator may 
     prescribe by regulation, the Administrator shall--
       ``(i) review the application in its entirety; and
       ``(ii)(I) approve the application and issue a license for 
     such operation to the applicant if the requirements of this 
     section are satisfied; or
       ``(II) disapprove the application and notify the applicant 
     in writing of the disapproval.''.
       (c) Electronic Submissions.--Part A of title III of the 
     Small Business Investment Act of 1958 (15 U.S.C. 681 et 
     seq.), as amended by subsection (a) of this section, is 
     amended by adding at the end the following:

     ``SEC. 322. ELECTRONIC SUBMISSIONS.

       ``The Administration shall permit any document submitted 
     under this title, or pursuant to a regulation carrying out 
     this title, to be submitted electronically, including by 
     permitting an electronic signature for any signature that is 
     required on such a document.''.
                                 ______