Rural Capital Access Act

II 117TH CONGRESS 1ST SESSION S. 1058 To amend the Small Business Investment Act of 1958 to provide opportunities to rural business investment companies, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 25, 2021 Mr. THUNE (for himself, Mrs. SHAHEEN, and Mrs. FISCHER) 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 Investment Act of 1958 to provide opportunities to rural business investment com- panies, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Rural Capital Access 4 Act’’. 5 SEC. 2. DEFINITIONS. 6 In this Act— 7 (1) the term ‘‘Administration’’ means the Small 8 Business Administration; 9 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 1058 IS (2) the term ‘‘Administrator’’ means the Ad- 1 ministrator of the Administration; 2 (3) the term ‘‘appropriate committees of Con- 3 gress’’ means— 4 (A) the Committee on Small Business and 5 Entrepreneurship of the Senate; 6 (B) the Committee on Agriculture, Nutri- 7 tion, and Forestry of the Senate; 8 (C) the Committee on Small Business of 9 the House of Representatives; and 10 (D) the Committee on Agriculture of the 11 House of Representatives; 12 (4) the term ‘‘rural business investment com- 13 pany’’ has the meaning given the term in section 14 384A of the Consolidated Farm and Rural Develop- 15 ment Act (7 U.S.C. 2009cc); 16 (5) the term ‘‘Secretary’’ means the Secretary 17 of Agriculture; and 18 (6) the term ‘‘working group’’ means the inter- 19 agency working group established under section 20 4(a). 21 SEC. 3. RURAL BUSINESS INVESTMENT. 22 (a) IN GENERAL.—The Small Business Investment 23 Act of 1958 (15 U.S.C. 661 et seq.) is amended— 24 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 1058 IS (1) in part A of title III (15 U.S.C. 681 et 1 seq.)— 2 (A) in section 303(b)(2) (15 U.S.C. 3 683(b)(2)), by adding at the end the following: 4 ‘‘(E) INVESTMENTS IN RURAL AREAS.— 5 ‘‘(i) DEFINITION.—In this subpara- 6 graph, the term ‘rural area’ has the mean- 7 ing given the term in section 343(a) of the 8 Consolidated Farm and Rural Develop- 9 ment Act (7 U.S.C. 1991(a)). 10 ‘‘(ii) ADDITIONAL LEVERAGE.— 11 ‘‘(I) IN GENERAL.—In calcu- 12 lating the outstanding leverage of a 13 company for the purposes of subpara- 14 graph (A), the Administrator shall not 15 include the amount of the cost basis 16 of any equity investment made by the 17 company in a smaller enterprise lo- 18 cated in a rural area if the Adminis- 19 trator, after performing an appro- 20 priate evaluation, determines that 21 such an exclusion will not result in 22 additional risk to the Administration 23 or the Federal Government. 24 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 1058 IS ‘‘(II) LIMITATION.—The amount 1 excluded under subclause (I) for a 2 company shall not exceed $25,000,000 3 in any fiscal year.’’; 4 (B) in section 308(g)(3) (15 U.S.C. 5 687(g)(3))— 6 (i) in subparagraph (D), by striking 7 ‘‘and’’ at the end; 8 (ii) in subparagraph (E), by striking 9 the period at the end and inserting ‘‘; 10 and’’; and 11 (iii) by adding at the end the fol- 12 lowing: 13 ‘‘(F) the total number of rural business invest- 14 ment companies, as defined in section 321(a), that 15 received leverage from the Administration under sec- 16 tion 321 in the previous year, including the amount 17 of that leverage that each such rural business invest- 18 ment company received.’’; 19 (C) in section 310(d)(1)(A) (15 U.S.C. 20 687b(d)(1)(A)), by inserting ‘‘(including each 21 rural business investment company that receives 22 leverage under section 321)’’ after ‘‘Each li- 23 censee’’; and 24 (D) by adding at the end the following: 25 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 1058 IS ‘‘SEC. 321. RURAL BUSINESS INVESTMENT COMPANIES. 1 ‘‘(a) DEFINITIONS.—In this section— 2 ‘‘(1) the term ‘covered amounts’ means, with 3 respect to a fiscal year, the amounts made available 4 for that fiscal year to grant leverage under this part 5 to small business investment companies; 6 ‘‘(2) the term ‘rural business investment com- 7 pany’ has the meaning given the term in section 8 384A of the Consolidated Farm and Rural Develop- 9 ment Act (7 U.S.C. 2009cc); and 10 ‘‘(3) the term ‘Secretary’ means the Secretary 11 of Agriculture. 12 ‘‘(b) LEVERAGE.— 13 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 14 if the Administration determines under subsection 15 (c) that the Administration will be unable to expend 16 all of the covered amounts for a particular fiscal 17 year, the Administration shall expend those unex- 18 pended covered amounts for that fiscal year to grant 19 leverage to rural business investment companies for 20 the purposes described in this part if, with respect 21 to that fiscal year, the Secretary determines that the 22 Secretary is unable to grant leverage to rural busi- 23 ness investment companies in a manner that is suffi- 24 cient to satisfy the leverage needs of those rural 25 business investment companies. 26 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 1058 IS ‘‘(2) CONDITIONS.—With respect to leverage 1 granted by the Administration to a rural business 2 investment company under paragraph (1)— 3 ‘‘(A) the amount of the leverage made 4 available shall be subject to the limitations 5 under section 303(b)(2); 6 ‘‘(B) for the purposes of subparagraph 7 (A), any leverage granted by the Secretary to 8 the rural business investment company under 9 the program carried out under subtitle H of the 10 Consolidated Farm and Rural Development Act 11 (7 U.S.C. 2009cc et seq.) shall be included 12 when determining the maximum amount of out- 13 standing leverage that may be made available to 14 the rural business investment company under 15 this section; and 16 ‘‘(C) the Administration, in consultation 17 with the Secretary, shall— 18 ‘‘(i) impose such terms and conditions 19 with respect to the leverage that the Ad- 20 ministration and the Secretary determine 21 to be appropriate; and 22 ‘‘(ii) in developing the terms and con- 23 ditions described in clause (i)— 24 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 1058 IS ‘‘(I) ensure, to the maximum ex- 1 tent practicable, that those terms and 2 conditions are not— 3 ‘‘(aa) duplicative of other re- 4 quirements applicable to rural 5 business investment companies; 6 or 7 ‘‘(bb) otherwise unnecessary; 8 and 9 ‘‘(II) take into consideration how 10 rural business investment companies 11 that have been issued a license by the 12 Secretary under section 384D(e) of 13 the Consolidated Farm and Rural De- 14 velopment Act (7 U.S.C. 2009cc–3(e)) 15 before the date of enactment of this 16 section could qualify to receive that le- 17 verage. 18 ‘‘(c) INTERNAL EVALUATION.—Not later than June 19 1 of each year, the Administration shall perform an eval- 20 uation to determine whether the Administration will be 21 unable to expend all of the covered amounts for the fiscal 22 year in which the evaluation is made.’’; and 23 (2) in section 503(g) (15 U.S.C. 697(g)), by in- 24 serting ‘‘, and with respect to leverage granted 25 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 1058 IS under section 321,’’ after ‘‘retained by the Adminis- 1 tration under this section’’. 2 (b) SBA REQUIREMENTS.— 3 (1) ESTABLISHMENT OF APPLICATION PROC- 4 ESS.—Not later than 180 days after the date of en- 5 actment of this Act, the Administrator, in consulta- 6 tion with the Secretary, shall establish a process 7 through which a rural business investment company 8 may apply for leverage granted under section 321 of 9 the Small Business Investment Act of 1958, as 10 added by subsection (a) of this section. 11 (2) UPDATE TO RULES.—Not later than 180 12 days after the date of enactment of this Act, and in 13 addition to the process established under paragraph 14 (1), the Administrator shall make any updates to the 15 rules of the Administration that are necessary as a 16 result of this section and the amendments made by 17 this section. 18 SEC. 4. INTERAGENCY WORKING GROUP. 19 (a) ESTABLISHMENT.—Not later than 180 days after 20 the date of enactment of this Act, the Administrator, in 21 consultation with the Secretary, shall establish an inter- 22 agency working group to develop— 23 (1) administrative recommendations for improv- 24 ing the coordination between the Administration and 25 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 1058 IS the Department of Agriculture in administering the 1 program carried out under part A of title III of the 2 Small Business Investment Act of 1958 (15 U.S.C. 3 681 et seq.) and the program carried out under sub- 4 title H of the Consolidated Farm and Rural Devel- 5 opment Act (7 U.S.C. 2009cc et seq.), respectively; 6 and 7 (2) legislative recommendations for improving 8 capital access and investment in rural areas of the 9 United States through the programs described in 10 paragraph (1), including by increasing the number 11 of licensees under those programs. 12 (b) MEMBERS.— 13 (1) IN GENERAL.—The Administrator, in con- 14 sultation with the Secretary, shall appoint to the 15 working group such representatives from the Admin- 16 istration and the Department of Agriculture, and 17 such non-Federal industry stakeholders, as the Ad- 18 ministrator, in consultation with the Secretary, de- 19 termines to be appropriate. 20 (2) COMPENSATION.—No member of the work- 21 ing group may receive any compensation by reason 22 of the service of the member on the working group. 23 (c) REPORT TO CONGRESS.—Not later than 180 days 24 after the date on which the working group is established 25 VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 1058 IS under subsection (a), the working group shall submit to 1 the appropriate committees of Congress a report that con- 2 tains— 3 (1) the administrative actions that the Adminis- 4 tration and the Department of Agriculture should 5 take to make the improvements described in para- 6 graph (1) of that subsection; and 7 (2) the legislative recommendations described in 8 paragraph (2) of that subsection. 9 (d) TERMINATION.—The working group shall termi- 10 nate upon submission of the report required under sub- 11 section (c). 12 (e) IMPLEMENTATION OF RECOMMENDATIONS.—Not 13 later than 90 days after the date on which the working 14 group submits the report required under subsection (c), 15 the Administration and the Department of Agriculture 16 shall take the administrative actions described in para- 17 graph (1) of that subsection. 18 (f) INAPPLICABILITY OF FEDERAL ADVISORY COM- 19 MITTEE ACT.—The Federal Advisory Committee Act (5 20 U.S.C. App.) shall not apply with respect to the working 21 group or the activities of the working group. 22 Æ VerDate Sep 11 2014 20:56 Apr 23, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\S1058.IS S1058 pamtmann on DSKBC07HB2PROD with BILLS