S.Amdt. 1445

SA 1445. 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. ___. SMALL BUSINESS INVESTMENT COMPANIES.

(a) Fees; Innovation and Supply Chain Resiliency
Debentures; Reserve Fund.--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 303 (15 U.S.C. 683)--
(A) in subsection (b), in the matter preceding paragraph
(1), in the fifth sentence, by striking ``established
annually by the Administration, as 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 purchasing and guaranteeing debentures
under this Act, which amount may not exceed 1.38 percent per
year, and which shall be paid to and retained by the
Administration'' and inserting the following: ``that the
Administrator, by rule, shall establish, as 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 purchasing and guaranteeing debentures
under this Act, and which shall be paid to and retained by
the Administration. The Administrator may adjust the charge
established under the preceding sentence only through notice
and comment rule making conducted under section 553 of title
5, United States Code.''; and
(B) by adding at the end the following:
``(l) Innovation and Supply Chain Resiliency Debentures.--
``(1) Definitions.--In this subsection:
``(A) Code.--The term `code' means a North American
Industry Classification System code.
``(B) Covered company.--
``(i) In general.--The term `covered company' means a small
business investment company that--

``(I) is in compliance with the requirements of this title
with respect to the issuance of debentures; and
``(II) invests solely in covered small business concerns
involved in manufacturing industries, as determined under
paragraph (2).

``(ii) Rule of construction.--A small business investment
company shall not be precluded from being considered a
covered company for the purposes of this subsection solely
because of the status of the company as a subsidiary of
another small business investment company.
``(iii) Regulations.--The Administrator may issue
regulations to provide further guidance regarding the rule of
construction under clause (ii).
``(C) Covered small business concern.--The term `covered
small business concern'--
``(i) means a small business concern; and
``(ii) includes an entity that is not more than 300 percent
larger than the size standards 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)).
``(2) Determination.--
``(A) In general.--For the purposes of paragraph
(1)(B)(i)(II), a covered small business concern shall be
considered to be involved in a manufacturing industry if the
covered small business concern is in the manufacturing sector
and, subject to paragraph (3), is, in 2020 (or, as of the
date on which a covered company invests in the covered 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).

[[Page S1423]]

``(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) Rule of construction.--Any of the following entities
shall be deemed to satisfy subparagraph (A):
``(i) A small business concern that has received an award
under the Small Business Innovation Research Program or the
Small Business Technology Transfer Program of the
Administration.
``(ii)(I) 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)).
``(II) The Administrator and the Secretary of Commerce
shall, by rule, determine what constitutes significant
engagement for the purposes of subclause (I).
``(iii) Any small business concern if--

``(I) 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
``(II) 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.

``(3) Maintenance of list of manufacturing industries.--
``(A) In general.--The Administrator shall, once every 3
years, update the codes described in clauses (i) through
(xxxviii) of paragraph (2)(A) to ensure that those 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.

``(4) Debentures.--
``(A) In general.--A licensed covered company may issue
Innovation and Supply Chain Resiliency debentures.
``(B) Amount.--Notwithstanding any other provision of this
title, the amount of an Innovation and Supply Chain
Resiliency debenture purchased or guaranteed by the
Administration with respect to a covered company shall be not
more than 400 percent of the private capital of the company.
``(C) Repayment.--
``(i) In general.--

``(I) Dividend.--Except as provided in clause (ii), and
subject to clause (iii), a covered company shall repay a
debenture described in subparagraph (B) by requiring each
covered small business concern in which the covered company
invests to pay to the covered company 1 percent of the annual
revenue of the covered small business concern (referred to in
this subsection as the `Small Business Innovation and
Resiliency Dividend'), which the covered company shall
collect and transfer to the Administration until the date on
which the Administration has recovered 150 percent of the
amount of the initial investment of the Administration with
respect to the covered company.
``(II) No interest.--There shall be no interest payment
required with respect to an Innovation and Supply Chain
Resiliency debenture.

``(ii) Exceptions.--

``(I) Termination.--If a covered company is dissolved, or
otherwise terminates operations, before the date on which the
covered company is able to collect the Small Business
Innovation and Resiliency Dividend required under clause (i)
from a covered small business concern described in that
clause, the covered small business concern shall be
responsible for paying the Small Business Innovation and
Resiliency Dividend directly to the Administration.
``(II) Initial public offering.--If a covered small
business concern in which a covered company invests is the
subject of an initial public offering before the date on
which the covered company satisfies clause (i), the covered
company shall continue carrying out that clause with respect
to the covered small business concern until the date on which
the Administration has recovered 300 percent of the amount of
the initial investment of the Administration with respect to
the covered company.

``(iii) Principal payments.--If, as of the date that is 30
years after the date on which a covered company makes an
investment in a covered small business concern, the covered
small business concern has repaid less than 50 percent of the
original principal with respect to that investment, the
covered small business concern shall be required to pay to
the covered company an amount that is equal to 50 percent of
that original principal amount, which the covered company
shall transfer to the Administration.
``(iv) Punitive damages.--

``(I) In general.--Except as provided in subclause (III), a
covered small business concern in which a covered company has
invested shall be required to pay the covered company
punitive damages in an amount that is 600 percent of the
amount of that investment if--

``(aa) the covered small business concern is purchased by
another entity and, after that purchase, the operations of
the small business concern are moved outside of the United
States; or
``(bb) the production of goods produced by the covered
small business concern (or produced by another entity on
behalf of the covered small business concern), the
headquarters of the small business concern, or substantial
operations of the small business concern are established or
moved outside of the United States.

``(II) Payments.--Punitive damages that a covered small
business concern are required to pay to a covered company
under subclause (I) shall be--

``(aa) paid to the covered company on the date on which the
action that triggers the payment of damages under that
subclause occurs; and
``(bb) upon collection by the covered company, transferred
to the Administrator, who shall deposit the amounts in the
SBIC Reserve Fund established under section 321(a).

``(III) Termination.--If a covered company is dissolved, or
otherwise terminates operations, before the date on which the
covered company is able to collect punitive damages required
under subclause (I) from a covered small business concern
described in that subclause, the covered small business
concern shall be responsible for paying the punitive damages
directly to the Administration.

``(5) Applicability of rules regarding default and
insolvency.--The rules of the Administration under this title
regarding the default or insolvency of a small business
investment company shall apply to a covered company under
this subsection.
``(6) Calculation of subsidy rate.--All fees, interest, and
profits received and retained by the Administration under
this subsection 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
Congressional Budget Act of 1974 (2 U.S.C. 661a)) to the
Administration of purchasing and guaranteeing debentures and
participating securities under this Act.
``(7) Issuance and guarantee of trust certificates.--The
Administration is authorized to issue trust certificates
representing ownership of all or a fractional part of
debentures issued by covered companies and guaranteed by the
Administration under this subsection in the same manner, and
subject to the same requirements, as provided in section 319.
``(8) Accounting.--Any payment made to the Administration
under this subsection, including the payment of a Small
Business Innovation and Resiliency Dividend, shall be
remitted to the account associated with the program carried
out under this title.''; and
(2) by adding at the end the following:

``SEC. 321. RESERVE FUND.

``(a) In General.--There is established in the Treasury an
SBIC Reserve Fund (referred to in this section as the
`fund'), which shall be an account separate from any other
accounts or funds available to the Administrator and shall be
credited with the amounts described in subsection (b).
``(b) Credits.--The fund shall be credited with the fees
described in section 303(b)--
``(1) in the manner and amount that the Administrator
determines to be in accord with sound actuarial and
accounting practice; and
``(2) to ensure that the fund complies with the requirement
under subsection (d).
``(c) Distribution of Funds.--Amounts in the fund shall be
available to satisfy unmet debt obligations for purchasing
and guaranteeing debentures under this title.
``(d) Capital Ratio.--
``(1) Definition.--In this subsection, the term `capital
ratio' means, with respect to a date, the quotient obtained
by dividing the amounts in the fund, as of that date, by the
outstanding guarantees under this title, as of that date.
``(2) Requirement.--Beginning in fiscal year 2022, the
Administrator shall ensure that the fund maintains a capital
ratio that is not less than 0.005 and not greater than
0.03.''.
(b) Limitations.--Commitments to guarantee loans for
debentures under section 303 of the Small Business Investment
Act of 1958 (15 U.S.C. 683) shall not exceed the following
amounts:
(1) In each of fiscal years 2021 and 2022--
(A) $7,000,000,000 for such commitments under subsection
(b) of such section 303 (referred to in this subsection as
``section 303(b) commitments''); and
(B) $4,000,000,000 for commitments under the program
established under subsection (l) of such section 303, as
added by subsection (a)(1) of this section (referred to in
this subsection as ``innovation and supply chain resiliency
debenture commitments'').

[[Page S1424]]

(2) In each of fiscal years 2023, 2024, and 2025--
(A) $4,500,000,000 for section 303(b) commitments; and
(B) $2,000,000,000 for innovation and supply chain
resiliency debenture commitments.
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