S.Amdt. 1444

SA 1444. Mr. RUBIO submitted an amendment intended to be proposed to
amendment SA 1407 submitted by Ms. Murkowski and intended to be
proposed to the bill S. 2657, to support innovation in advanced
geothermal research and development, and for other purposes; which was
ordered to lie on the table; as follows:

SEC. ___. INNOVATION AND SUPPLY CHAIN RESILIENCY LOANS.

(a) In General.--
(1) Definitions.--In this subsection--
(A) the term ``manufacturing small business concern'' means
an eligible small business concern that--
(i) is assigned a code described in paragraph (7); and
(ii) is not more than 300 percent larger than the
applicable size standard established for categorizing a
business concern as a small business concern under section
3(a) of the Small Business Act (15 U.S.C. 632(a));
(B) the term ``capital deepening'' means the purchase,
lease, or improvement or renovation of tangible long-term
fixed assets, which shall not include furniture or
automobiles;
(C) the term ``code'' means a North American Industry
Classification System code;
(D) the term ``historical average revenue'' means, with
respect to an manufacturing small business concern, the
average annual amount of revenue of the manufacturing small
business concern, as reported on the return or in the return
information of the manufacturing small business concern, over
the 3-year period preceding the date on which the
manufacturing small business concern receives the first
disbursement of an innovation and supply chain resiliency
loan;
(E) the term ``HUBZone'' has the meaning given the term in
section 31(b) of the Small Business Act (15 U.S.C. 657a(b));
(F) the term ``innovation and supply chain resiliency
loan'' means a loan guaranteed under the authority under
paragraph (2);
(G) the term ``Loan Loss Reserve Fund'' means the Loan Loss
Reserve Fund established under paragraph (6); and
(H) the terms ``return'' and ``return information'' have
the meanings given those terms in section 6103(b) of the
Internal Revenue Code of 1986.
(2) Authority.--On and after the date that is 1 year after
the date of enactment of this Act, the Administrator may
guarantee the timely payment of a loan secured by property
made to and a revolving line of credit provided to an
manufacturing small business concern in accordance with this
subsection.
(3) Level of participation.--
(A) Maximum amount.--The maximum amount of an innovation
and supply chain resiliency loan shall be $50,000,000.
(B) Percentage.--The Administrator may guarantee not more
than 80 percent of an innovation and supply chain resiliency
loan.

[[Page S1420]]

(C) Use of funds.--
(i) In general.--A manufacturing small business concern
shall use not less than 50 percent of the amounts received
under an innovation and supply chain resiliency loan for
capital deepening.
(ii) Limitation.--A tangible long-term fixed asset acquired
with amounts received under an innovation and supply chain
resiliency loan and used for capital deepening under clause
(i) shall be located in the United States.
(D) Benchmarks.--
(i) In general.--A manufacturing small business concern
that receives an innovation and supply chain resiliency loan
shall, over the 3-year period beginning 2 years after the
date on which the manufacturing small business concern
receives the first disbursement of the loan, increase the
revenue of the manufacturing small business concern by an
average annual amount equal to not less than 15 percent of
the loan principal above the historical average revenue of
the manufacturing small business concern.
(ii) Counting of export sales.--For purposes of clause (i),
the amount of revenue of a manufacturing small business
concern that is attributable to exports shall be counted as
being 1.5 times the amount of such revenue.
(iii) Compliance with benchmarks.--

(I) Fee.--

(aa) In general.--Except as provided in item (bb), at the
end of the period described in clause (i), each manufacturing
small business concern receiving an innovation and supply
chain resiliency loan shall be assessed a performance
incentive fee in an amount equal to 1 percent of the total
amount to be disbursed to the manufacturing small business
concern under the innovation and supply chain resiliency
loan, which shall be added to the outstanding principal loan
balance.
(bb) Waiver.--A lender shall waive the performance
incentive fee under item (aa) with respect to a manufacturing
small business concern if the manufacturing small business
concern increases the revenue of the manufacturing small
business concern in accordance with clause (i).

(II) Subsequent disbursements.--A lender may not make the
second disbursement, or any subsequent disbursements, of an
innovation and supply chain resiliency loan to a
manufacturing small business concern until after the date on
which the revenues of the manufacturing small business
concern over the most recent 3-year period have increased by
an average annual amount equal to not less than 15 percent of
the loan principal above the historical average revenue of
the manufacturing small business concern.

(iv) Crediting of additional fees.--A lender shall submit
to the Administrator, for deposit in the Loan Loss Reserve
Fund, any fee received under clause (iii)(I), less a
reasonable cost-of-collection percentage retained by lender
to cover costs, as determined by the Administrator.
(v) Extensions.--Not later than 180 days after the date of
enactment of this Act, the Administrator shall promulgate
regulations establishing a process under which an
manufacturing small business concern may apply for an
extension of the timeframe established under clause (i).
(4) Provision of funds.--
(A) In general.--An innovation and supply chain resiliency
loan shall be provided to the manufacturing small business
concern in 2 or more disbursements, as determined by the
lender.
(B) Maximum first disbursement.--The first disbursement of
a loan under this paragraph provided to the manufacturing
small business concern shall be in an amount equal to not
more than 60 percent of the total amount of the loan.
(C) Minimum period for second disbursement.--The second
disbursement of a loan under this paragraph--
(i) may not be provided to a manufacturing small business
concern until after the date that is 5 years after the date
on which the manufacturing small business concern receives
the first disbursement; and
(ii) may only be provided to a manufacturing small business
concern in accordance with paragraph (3)(D)(iii)(II).
(5) Growth incentive.--During the 4-year period beginning
on the date on which a manufacturing small business concern
that is a small business concern under the size standards
under section 3(a) of the Small Business Act (15 U.S.C.
632(a)) receiving an innovation and supply chain resiliency
loan ceases to comply with the size standards established
under section 3(a)(2) of that Act (15 U.S.C. 632(a)(2)), the
manufacturing small business concern shall be deemed to be a
small business concern for purposes of any contracting
program, preference, or set aside under the Small Business
Act (15 U.S.C. 631 et seq.) or any other Act.
(6) Innovation and supply chain resiliency loan loss
reserve fund.--
(A) Establishment.--There is established in the Treasury a
fund, to be known as the Loan Loss Reserve Fund, into which
shall be deposited--
(i) performance incentive fees collected under paragraph
(3)(D)(iii)(I); and
(ii) any other fees collected under this subsection--

(I) in the manner and amount that the Administrator
determines to be in accord with sound actuarial and
accounting practice; and
(II) to ensure that the Loan Loss Reserve Fund complies
with the requirement under subparagraph (C).

(B) Distribution of funds.--Amounts in the Loan Loss
Reserve Fund shall be available to satisfy unmet debt
obligations for guarantees made under this subsection.
(C) Capital ratio.--
(i) Definition.--In this subparagraph, the term ``capital
ratio'' means, with respect to a date, the quotient obtained
by dividing the amounts in the Loan Loss Reserve Fund, as of
that date, by the outstanding guarantees under this
subsection, as of that date.
(ii) Requirement.--Beginning in fiscal year 2022, the
Administrator shall ensure that the Loan Loss Reserve Fund
maintains a capital ratio that is not less than .005 and not
greater than 0.01.
(7) Involvement in manufacturing industry.--
(A) In general.--A business concern shall be considered to
be involved in a manufacturing industry if the business
concern is in the manufacturing sector and, subject to
subparagraph (B), is, in 2020 (or, as of the date on which
the lender makes a loan or provides a revolving line of
credit to a manufacturing small business concern) assigned to
any of the following codes or any 6-digit code associated
with any of the following codes:
(i) 2111 (oil and gas extraction).
(ii) 2121 (coal mining).
(iii) 2211 (electric power generation, transmission and
distribution).
(iv) 2212 (natural gas distribution).
(v) 3241 (petroleum and coal products manufacturing).
(vi) 3251 (basic chemical manufacturing).
(vii) 3315 (foundries).
(viii) 3332 (industrial machinery manufacturing).
(ix) 3336 (engine, turbine, and power transmission
equipment manufacturing).
(x) 3346 (manufacturing and reproducing magnetic and
optical media).
(xi) 3351 (electric lighting equipment manufacturing).
(xii) 3353 (electrical equipment manufacturing).
(xiii) 3359 (other electrical equipment and component
manufacturing).
(xiv) 3252 (resin, synthetic rubber, and artificial and
synthetic fibers and filaments manufacturing).
(xv) 3253 (pesticide, fertilizer, and other agricultural
chemical manufacturing).
(xvi) 3254 (pharmaceutical and medicine manufacturing).
(xvii) 3259 (other chemical product and preparation
manufacturing).
(xviii) 3271 (clay product and preparation manufacturing).
(xix) 3279 (other nonmetallic mineral product
manufacturing).
(xx) 3311 (iron and steel mills and ferroalloy
manufacturing).
(xxi) 3313 (alumina and aluminum production and
processing).
(xxii) 3331 (agriculture, construction, and mining
machinery manufacturing).
(xxiii) 3333 (commercial and service industry machinery
manufacturing).
(xxiv) 3339 (other general purpose machinery
manufacturing).
(xxv) 3341 (computer and peripheral equipment
manufacturing).
(xxvi) 3342 (communications equipment manufacturing).
(xxvii) 3343 (audio and video equipment manufacturing).
(xxviii) 3345 (navigational, measuring, electromedical, and
control instruments manufacturing).
(xxix) 3352 (household appliance manufacturing).
(xxx) 3361 (motor vehicle manufacturing).
(xxxi) 3362 (motor vehicle body and trailer manufacturing).
(xxxii) 3363 (motor vehicle parts manufacturing).
(xxxiii) 3364 (aerospace product and parts manufacturing).
(xxxiv) 3365 (railroad rolling stock manufacturing).
(xxxv) 3366 (ship and boat building).
(xxxvi) 3369 (other transportation equipment
manufacturing).
(xxxvii) 3391 (medical equipment and supplies
manufacturing).
(xxxviii) 3399 (other miscellaneous manufacturing).
(B) Certain entities.--
(i) In general.--The following entities shall be deemed to
be assigned to a code described in clauses (i) through
(xxxviii) of subparagraph (A) or a 6-digit code associated
with such a code:

(I) A small business concern that has received an award
under the Small Business Innovation Research Program or the
Small Business Technology Transfer Program under section 9 of
the Small Business Act (15 U.S.C. 638).
(II) A small business concern that has significant
engagement with a Manufacturing USA institute, as defined in
section 34(d) of the National Institute of Standards and
Technology Act (15 U.S.C. 278s(d)).
(III) Any other small business concern if--

(aa) a foreign person sought to merge with, acquire, take
over, or otherwise obtain control of the small business
concern through a covered transaction (as defined in section
721(a) of the Defense Production Act of 1950 (50 U.S.C.
4565(a))); and
(bb) the Committee on Foreign Investment in the United
States reviewed the covered transaction under section 721 of
the Defense Production Act of 1950 (50 U.S.C. 4565) and
recommended to the President that the President suspend or
prohibit the covered transaction.

[[Page S1421]]

(ii) Significant engagement.--The Administrator and the
Secretary of Commerce shall, by rule, determine what
constitutes significant engagement for the purposes of clause
(i)(II).
(8) Maintenance of list of manufacturing industries.--
(A) In general.--Not later than 3 years after the date of
enactment of this Act, and every 3 years thereafter, the
Administrator shall update the codes described in paragraph
(7)(A) to ensure that the codes reflect manufacturing
industries.
(B) Criteria for consideration.--In updating a code under
subparagraph (A) to ensure that the code reflects a
manufacturing industry, the Administrator shall consider--
(i) whether the amount of spending on research and
development per worker in the industry covered by the code is
in not lower than the 75th percentile of such spending, as
compared with all industries in the United States;
(ii) whether the percentage of workers in the industry
covered by the code, the duties of whom require a high degree
of training in the fields of science, technology,
engineering, and mathematics, is above the national average,
as compared with all industries in the United States; and
(iii) the role of the industry covered by the code in--

(I) the manufacturing sector of the economy of the United
States; and
(II) the United States supply chain.

(9) No secondary market sales.--Notwithstanding section
5(f) of the Small Business Act (15 U.S.C. 634(f)), the
guaranteed portion of an innovation and supply chain
resiliency loan may not be sold by the lender.
(10) Period of maturity.--An innovation and supply chain
resiliency loan shall have a period of maturity of not more
than 25 years, which may be established by the lender to
reflect the primary purpose of the loan.
(11) Rate of interest.--An innovation and supply chain
resiliency loan shall have a rate of interest that is not
more than the applicable maximum percentage rate of interest
for a loan guaranteed under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)).
(12) Guarantee and yearly fees.--
(A) In general.--Notwithstanding paragraphs (18) and (23)
of section 7(a) of the Small Business Act (15 U.S.C. 636(a)),
the Administrator may establish the guarantee and yearly fees
assessed for an innovation and supply chain resiliency loan
at a percentage of the loan that the Administrator determines
necessary to reduce to zero the cost (as defined in section
502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a))
to the Administration of making guarantees under this
subsection.
(B) Publication of projected fees.--When the Administrator
changes fees under this paragraph, the Administrator shall
publish--
(i) the projected annual fee rate for each year for the
ensuing 10-year period; and
(ii) a description of the assumptions used by the
Administrator in projecting fees under clause (i).
(C) Waiver.--The Administrator shall waive 25 percent of
the otherwise applicable guarantee and annual fees under
subparagraph (A) if an manufacturing small business concern--
(i) uses the innovation and supply chain resiliency loan
for activities substantially located within a HUBZone; and
(ii) is primarily located within a HUBZone.
(D) Regulations.--Not later than 90 days after the date of
enactment of this Act, the Administrator shall promulgate
regulations establishing what constitutes--
(i) activities substantially located within a HUBZone; and
(ii) being primarily located within a HUBZone.
(13) Creditworthiness.--For purposes of an innovation and
supply chain resiliency loan, a lender shall determine
creditworthiness in the same manner as is required under the
Export Working Capital Program established under section
7(a)(14)(A) of the Small Business Act (15 U.S.C.
636(a)(14)(A)) to the maximum extent practicable.
(14) Provision of returns and return information.--As a
condition of a loan guarantee under this subsection, a
manufacturing small business concern shall agree to disclose,
upon request of the Administrator, any return or return
information the Administrator determines necessary to
determine the historical average revenue of the manufacturing
small business concern.
(15) Outreach program.--The Administrator shall develop and
implement an outreach program to inform and recruit
manufacturing small business concerns to apply for innovation
and supply chain resiliency loans, under which the
Administrator shall make a sustained and substantial effort
to engage--
(A) resource partners of the Administration;
(B) the Minority Business Development Agency;
(C) the National Network for Manufacturing Innovation;
(D) national and regional chambers of commerce,
particularly those that work with small business concerns in
underserved markets;
(E) national and regional business councils, particularly
those that work with small business concerns in underserved
markets;
(F) other public entities that work with small business
concerns in underserved markets;
(G) the offices of Federal agencies responsible for the
Small Business Innovation Research Program and Small Business
Technology Transfer Program of the Federal agencies; and
(H) institutions of higher education, research
institutions, and other academic institutions that are
engaged in the study or promotion of manufacturing in the
United States.
(16) The national small business innovation working
group.--
(A) Establishment.--There is established an advisory
committee to be known as the National Small Business
Innovation Working Group (referred to in this paragraph as
the ``advisory committee'').
(B) Duties.--
(i) In general.--The advisory committee shall advise the
Administrator with respect to activities proposed or
undertaken to carry out the mission of the advisory committee
under this paragraph.
(ii) Certain recommendations.--Activities of the advisory
committee under clause (i) shall include making
recommendations to the Administrator regarding--

(I) effective and efficient implementation of the
innovation and supply chain resiliency loan product line
established under this subsection;
(II) the overall performance and structure of the
innovation and supply chain resiliency loan program
established under this subsection, and measures that may
improve the effectiveness and efficiency of the program; and
(III) applications for extensions made under the process
established under paragraph (3)(D)(v).

(iii) Considerations.--In evaluating applications under
paragraph (3)(D)(v), the advisory committee shall consider--

(I) the applicant's prospects for future ability to meet
the growth benchmarks established under paragraph (3)(D)(i)
if granted an extension;
(II) the technological and scientific promise of the uses
to which the proceeds of the innovation and supply chain
resiliency loan have been and will be directed;
(III) the local and regional economic development
implications of the uses to which the proceeds of the
innovation and supply chain resiliency loan have been and
will be directed;
(IV) the importance to the national innovation ecosystem of
the uses to which the proceeds of the innovation and supply
chain resiliency loan have been and will be directed; and
(V) the importance to national or economic security of the
uses to which the proceeds of the innovation and supply chain
resiliency loan have been and will be directed.

(C) Membership.--
(i) In general.--The advisory committee shall be composed
of appointed members and ex officio members. All members of
the advisory committee other than ex officio members shall be
voting members.
(ii) Appointed members.--

(I) In general.--The Administrator shall appoint to the
advisory committee 17 appropriately qualified individuals.
(II) Non-federal members.--Not fewer than 12 members of the
advisory committee shall be individuals who are not officers
or employees of the United States.

(iii) Representative membership.--The Administrator shall
ensure that the appointed members of the Committee, as a
group, are representative of professions and entities
concerned with, or affected by, activities under this
paragraph, of which--

(I) 4 shall be individuals distinguished in the private
sector in manufacturing industries;
(II) 4 shall be individuals distinguished in the academic
study of manufacturing;
(III) 4 shall be representatives of the commercial lending
community;
(IV) 4 shall be individuals distinguished in the field of
innovation policy; and
(V) 1 shall be such individual as the Administrator may
consider appropriate.

(iv) Ex officio members.--The ex officio members of the
advisory committee shall be the following:

(I) The Director of the Advanced Research Projects Agency-
Energy.
(II) The Director of the Defense Advanced Research Projects
Agency.
(III) The Co-Chairs of the President's Council of Advisors
on Science and Technology.
(IV) The Director of the Advanced Manufacturing National
Program Office.
(V) The Director of the Manufacturing Extension Partnership
at the National Institute of Standards and Technology.
(VI) Not more than 3 other Federal officers, as the
Administrator may consider appropriate.

(D) Terms.--
(i) In general.--Subject to clause (ii), members of the
advisory committee appointed under subparagraph (C)(ii)(I)
shall serve for a term of 3 years.
(ii) Staggered terms.--The Administrator shall appoint the
initial members of the advisory committee under subparagraph
(C)(ii)(I) for terms of 1, 2, or 3 years to ensure the
staggered rotation of \1/3\ of the members of the advisory
committee each year.
(iii) Service beyond term.--A member of the Committee
appointed under subparagraph (C)(ii)(I) may continue to serve
after the expiration of the term of the members until a
successor is appointed.
(E) Vacancies.--If a member of the advisory committee
appointed under subparagraph (C)(ii)(I) does not serve the
full term

[[Page S1422]]

applicable under subparagraph (D), the individual appointed
to fill the resulting vacancy shall be appointed for the
remainder of the term of the predecessor of the individual.
(F) Chairperson.--At the first meeting of the advisory
committee, the voting members of the advisory committee
shall, from among the members of the advisory committee
appointed under subparagraph (C)(ii)(I), designate an
individual to serve as the chairperson of the advisory
committee. In the event that the advisory committee in unable
to select a chairperson during its first meeting, the
Administrator shall designate a chairperson from among the
members of the advisory committee appointed under
subparagraph (C)(ii)(I).
(G) Meetings.--The advisory committee shall meet not less
than twice per year, not fewer than 5 months apart, and shall
otherwise meet at the call of the Administrator or the
chairperson.
(H) Compensation and reimbursement of expenses.--
(i) Appointed members.--Members of the advisory committee
appointed under subparagraph (C)(ii)(I) shall receive
compensation for each day (including travel time) engaged in
carrying out the duties of the advisory committee in an
amount not to exceed the daily equivalent of the annual rate
of basic pay prescribed for level IV of the Executive
Schedule under section 5315 of title 5, United States Code,
unless declined by the member.
(ii) Ex officio members.--Ex officio members of the
advisory committee may not receive compensation for service
on the advisory committee in addition to the compensation
otherwise received for duties carried out as officers of the
United States.
(I) Staff.--The Administrator shall provide to the advisory
committee such staff, information, and other assistance as
may be necessary to carry out the duties of the advisory
committee.
(J) Duration.--Notwithstanding section 14(a) of the Federal
Advisory Committee Act (5 U.S.C. App.), the advisory
committee shall continue in existence until otherwise
provided by law.
(K) Exemptions.--The advisory committee shall be exempt
from the requirements of sections 10(a), 10(b), and 11 of the
Federal Advisory Committee Act (5 U.S.C. App.).
(L) Report.--Not later than 1 year after the date of
enactment of this Act, and not less that annually thereafter,
the advisory committee shall submit to the Committee on Small
Business and Entrepreneurship of the Senate and the Committee
on Small Business of the House of Representatives, the
Administrator, and the President a report that describes the
recommendations and evaluations required under subparagraph
(B)
(17) Eligibility criteria for lenders.--The Administrator
shall establish eligibility criteria for lenders to
participate in the loan guarantee program under this
subsection, which shall include streamlined criteria for a
lender that is participating in the Preferred Lenders
Program, as defined in section 7(a)(2)(C)(iii) of the Small
Business Act (15 U.S.C. 636(a)(2)(C)(iii)).
(18) Applicability.--Except as otherwise provided, the
rules issued under, and any applicable terms with respect to,
the program carried out under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)) shall apply with respect to
the loan guarantee program under this subsection.
(19) Calculation of subsidy rate.--All fees, interest, and
profits received and retained by the Administration under
this section shall be included in the calculations made by
the Director of the Office of Management and Budget to offset
the cost (as that term is defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) to the
Administration of purchasing and guaranteeing loans under
this subsection.
(20) Applicability.--Except as otherwise provided, the
rules issued under, and any applicable terms with respect to,
the program carried out under section 7(a) of the Small
Business Act (15 U.S.C. 636(a)) shall apply with respect to
the loan guarantee program under this subsection.
(b) Authorization.--The Administrator may not make, with
respect to guarantees under subsection (a), in the
aggregate--
(1) in fiscal year 2021, more than $3,000,000,000 in
guarantees;
(2) in fiscal year 2022, more than $5,000,000,000 in
guarantees;
(3) in fiscal year 2023, more than $10,000,000,000 in
guarantees;
(4) in fiscal year 2024, more than $15,000,000,000 in
guarantees; and
(5) in fiscal year 2025, more than $15,000,000,000 in
guarantees.
______