Capital for Cooperatives Act

II 117TH CONGRESS 1ST SESSION S. 1736 To amend the Small Business Act to address the participation of cooperatives in the program carried out under section 7(a) of that Act, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 20, 2021 Mr. HICKENLOOPER 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 to address the participa- tion of cooperatives in the program carried out under section 7(a) of that Act, 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 ‘‘Capital for Coopera- 4 tives Act’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 (1) Cooperative businesses operate on the basis 8 of 1 member, 1 vote. 9 VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1736 IS (2) Cooperatives have helped to improve the 1 economic conditions of the people of the United 2 States for more than a century by increasing com- 3 petition and helping small players gain parity in the 4 market. 5 (3) Research has shown that cooperatives are 6 more resilient to economic business cycles than other 7 business models because cooperatives require mem- 8 ber-owners of the cooperative to work together and 9 prepare for the future. 10 (4) The mission of the Small Business Adminis- 11 tration (referred to in this Act as the ‘‘Administra- 12 tion’’) is to help the people of the United States 13 start, build, and grow businesses. 14 (5) The requirement of the Administration that 15 some borrowers provide a personal guarantee with 16 respect to certain Administration loans has pre- 17 vented cooperatives from accessing the safe and af- 18 fordable financing available from the Administration. 19 SEC. 3. COOPERATIVES. 20 (a) IN GENERAL.—Section 7(a)(15)(B)(iv) of the 21 Small Business Act (15 U.S.C. 636(a)(15)(B)(iv)) is 22 amended— 23 VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1736 IS (1) in the matter preceding subclause (I), by 1 striking ‘‘, or to a cooperative in accordance with 2 paragraph (35)’’; and 3 (2) in subclause (I), by striking ‘‘or coopera- 4 tive’’. 5 (b) SBA RESPONSIBILITIES.— 6 (1) DEFINITIONS.—In this subsection: 7 (A) ADMINISTRATOR.—The term ‘‘Admin- 8 istrator’’ means the Administrator of the Ad- 9 ministration. 10 (B) COOPERATIVE.—The term ‘‘coopera- 11 tive’’ has the meaning given the term in section 12 7(a)(35) of the Small Business Act (15 U.S.C. 13 636(a)(35)). 14 (C) PROGRAM.—The term ‘‘Program’’ 15 means the program carried out under section 16 7(a) of the Small Business Act (15 U.S.C. 17 636(a)). 18 (D) SMALL BUSINESS CONCERN.—The 19 term ‘‘small business concern’’ has the meaning 20 given the term in section 3(a) of the Small 21 Business Act (15 U.S.C. 632(a)). 22 (E) WORKING GROUP.—The term ‘‘Work- 23 ing Group’’ means the interagency working 24 group coordinated and chaired by the Secretary 25 VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1736 IS of Agriculture pursuant to section 310B(e)(12) 1 of the Consolidated Farm and Rural Develop- 2 ment Act (7 U.S.C. 1932(e)(12)), as amended 3 by subsection (c). 4 (2) COORDINATION; AMENDMENTS TO RULES; 5 REPORT.—The Administrator shall— 6 (A) beginning not later than 60 days after 7 the date of enactment of this Act, coordinate 8 and participate with the Working Group to— 9 (i) develop recommendations regard- 10 ing how the Administrator can coordinate 11 with the heads of other Federal agencies to 12 promote, support, and increase the number 13 of cooperatives; and 14 (ii) ensure coordination between the 15 Administrator and— 16 (I) other Federal agencies; and 17 (II) national and local organiza- 18 tions representing cooperatives and 19 small business concerns; 20 (B) not later than 180 days after the date 21 of enactment of this Act— 22 (i) amend the rules of the Administra- 23 tion with respect to guarantees for loans 24 VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1736 IS made to cooperatives under the Program, 1 which may include— 2 (I) requiring the Administrator 3 to guarantee a loan made to a cooper- 4 ative under the Program if the lender 5 with respect to the loan can dem- 6 onstrate that the cooperative is able to 7 repay the loan; and 8 (II) establishing lending criteria 9 for cooperatives under the Program 10 that are not based on personal or en- 11 tity guarantees provided by the mem- 12 ber-owners of the cooperative; and 13 (ii) submit to Congress a report docu- 14 menting the amendments made under 15 clause (i); and 16 (C) not later than 1 year after the date of 17 enactment of this Act, submit to Congress a re- 18 port regarding— 19 (i) education regarding cooperatives 20 that the Administrator has provided to— 21 (I) officials of the Administra- 22 tion; 23 (II) lenders participating in the 24 Program; and 25 VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1736 IS (III) small business development 1 centers described in section 21 of the 2 Small Business Act (15 U.S.C. 648); 3 and 4 (ii) during the period beginning on the 5 date of enactment of this Act and ending 6 on the date on which the report is sub- 7 mitted— 8 (I) the number of applications 9 submitted by cooperatives for loans 10 under the Program; and 11 (II) the number of applications 12 received under subclause (I) that were 13 approved by the Administrator. 14 (c) INTERAGENCY WORKING GROUP ON COOPERA- 15 TIVE DEVELOPMENT.—Section 310B(e)(12) of the Con- 16 solidated Farm and Rural Development Act (7 U.S.C. 17 1932(e)(12)) is amended— 18 (1) by striking ‘‘Not later’’ and inserting the 19 following: 20 ‘‘(A) IN GENERAL.—Not later’’; and 21 (2) by adding at the end the following: 22 ‘‘(B) MEETINGS.—The interagency work- 23 ing group described in subparagraph (A)— 24 ‘‘(i) shall meet— 25 VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1736 IS ‘‘(I) at such times determined 1 necessary by the Secretary; and 2 ‘‘(II) not less frequently than bi- 3 annually; and 4 ‘‘(ii) may conduct meetings in person 5 or through the use of electronic re- 6 sources.’’. 7 Æ VerDate Sep 11 2014 01:18 Jun 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6301 E:\BILLS\S1736.IS S1736 kjohnson on DSK79L0C42PROD with BILLS