S. 1058

Rural Capital Access Act

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II

117th CONGRESS

1st Session

S. 1058

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 companies, and for other purposes.

1.

Short title

This Act may be cited as the Rural Capital Access Act.

2.

Definitions

In this Act—

(1)

the term Administration means the Small Business Administration;

(2)

the term Administrator means the Administrator of the Administration;

(3)

the term appropriate committees of Congress means—

(A)

the Committee on Small Business and Entrepreneurship of the Senate;

(B)

the Committee on Agriculture, Nutrition, and Forestry of the Senate;

(C)

the Committee on Small Business of the House of Representatives; and

(D)

the Committee on Agriculture of the House of Representatives;

(4)

the term rural business investment company has the meaning given the term in section 384A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc);

(5)

the term Secretary means the Secretary of Agriculture; and

(6)

the term working group means the interagency working group established under section 4(a).

3.

Rural business investment

(a)

In general

The Small Business Investment Act of 1958 (15 U.S.C. 661 et seq.) is amended—

(1)

in part A of title III (15 U.S.C. 681 et seq.)—

(A)

in section 303(b)(2) (15 U.S.C. 683(b)(2)), by adding at the end the following:

(E)

Investments in rural areas

(i)

Definition

In this subparagraph, the term rural area has the meaning given the term in section 343(a) of the Consolidated Farm and Rural Development Act (7 U.S.C. 1991(a)).

(ii)

Additional leverage

(I)

In general

In calculating the outstanding leverage of a company for the purposes of subparagraph (A), the Administrator shall not include the amount of the cost basis of any equity investment made by the company in a smaller enterprise located in a rural area if the Administrator, after performing an appropriate evaluation, determines that such an exclusion will not result in additional risk to the Administration or the Federal Government.

(II)

Limitation

The amount excluded under subclause (I) for a company shall not exceed $25,000,000 in any fiscal year.

;

(B)

in section 308(g)(3) (15 U.S.C. 687(g)(3))—

(i)

in subparagraph (D), by striking and at the end;

(ii)

in subparagraph (E), by striking the period at the end and inserting ; and; and

(iii)

by adding at the end the following:

(F)

the total number of rural business investment companies, as defined in section 321(a), that received leverage from the Administration under section 321 in the previous year, including the amount of that leverage that each such rural business investment company received.

;

(C)

in section 310(d)(1)(A) (15 U.S.C. 687b(d)(1)(A)), by inserting (including each rural business investment company that receives leverage under section 321) after Each licensee; and

(D)

by adding at the end the following:

321.

Rural business investment companies

(a)

Definitions

In this section—

(1)

the term covered amounts means, with respect to a fiscal year, the amounts made available for that fiscal year to grant leverage under this part to small business investment companies;

(2)

the term rural business investment company has the meaning given the term in section 384A of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc); and

(3)

the term Secretary means the Secretary of Agriculture.

(b)

Leverage

(1)

In general

Subject to paragraph (2), if the Administration determines under subsection (c) that the Administration will be unable to expend all of the covered amounts for a particular fiscal year, the Administration shall expend those unexpended covered amounts for that fiscal year to grant leverage to rural business investment companies for the purposes described in this part if, with respect to that fiscal year, the Secretary determines that the Secretary is unable to grant leverage to rural business investment companies in a manner that is sufficient to satisfy the leverage needs of those rural business investment companies.

(2)

Conditions

With respect to leverage granted by the Administration to a rural business investment company under paragraph (1)—

(A)

the amount of the leverage made available shall be subject to the limitations under section 303(b)(2);

(B)

for the purposes of subparagraph (A), any leverage granted by the Secretary to the rural business investment company under the program carried out under subtitle H of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc et seq.) shall be included when determining the maximum amount of outstanding leverage that may be made available to the rural business investment company under this section; and

(C)

the Administration, in consultation with the Secretary, shall—

(i)

impose such terms and conditions with respect to the leverage that the Administration and the Secretary determine to be appropriate; and

(ii)

in developing the terms and conditions described in clause (i)—

(I)

ensure, to the maximum extent practicable, that those terms and conditions are not—

(aa)

duplicative of other requirements applicable to rural business investment companies; or

(bb)

otherwise unnecessary; and

(II)

take into consideration how rural business investment companies that have been issued a license by the Secretary under section 384D(e) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc–3(e)) before the date of enactment of this section could qualify to receive that leverage.

(c)

Internal evaluation

Not later than June 1 of each year, the Administration shall perform an evaluation to determine whether the Administration will be unable to expend all of the covered amounts for the fiscal year in which the evaluation is made.

; and

(2)

in section 503(g) (15 U.S.C. 697(g)), by inserting , and with respect to leverage granted under section 321, after retained by the Administration under this section.

(b)

SBA requirements

(1)

Establishment of application process

Not later than 180 days after the date of enactment of this Act, the Administrator, in consultation with the Secretary, shall establish a process through which a rural business investment company may apply for leverage granted under section 321 of the Small Business Investment Act of 1958, as added by subsection (a) of this section.

(2)

Update to rules

Not later than 180 days after the date of enactment of this Act, and in addition to the process established under paragraph (1), the Administrator shall make any updates to the rules of the Administration that are necessary as a result of this section and the amendments made by this section.

4.

Interagency working group

(a)

Establishment

Not later than 180 days after the date of enactment of this Act, the Administrator, in consultation with the Secretary, shall establish an interagency working group to develop—

(1)

administrative recommendations for improving the coordination between the Administration and the Department of Agriculture in administering the program carried out under part A of title III of the Small Business Investment Act of 1958 (15 U.S.C. 681 et seq.) and the program carried out under subtitle H of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009cc et seq.), respectively; and

(2)

legislative recommendations for improving capital access and investment in rural areas of the United States through the programs described in paragraph (1), including by increasing the number of licensees under those programs.

(b)

Members

(1)

In general

The Administrator, in consultation with the Secretary, shall appoint to the working group such representatives from the Administration and the Department of Agriculture, and such non-Federal industry stakeholders, as the Administrator, in consultation with the Secretary, determines to be appropriate.

(2)

Compensation

No member of the working group may receive any compensation by reason of the service of the member on the working group.

(c)

Report to Congress

Not later than 180 days after the date on which the working group is established under subsection (a), the working group shall submit to the appropriate committees of Congress a report that contains—

(1)

the administrative actions that the Administration and the Department of Agriculture should take to make the improvements described in paragraph (1) of that subsection; and

(2)

the legislative recommendations described in paragraph (2) of that subsection.

(d)

Termination

The working group shall terminate upon submission of the report required under subsection (c).

(e)

Implementation of recommendations

Not later than 90 days after the date on which the working group submits the report required under subsection (c), the Administration and the Department of Agriculture shall take the administrative actions described in paragraph (1) of that subsection.

(f)

Inapplicability of Federal Advisory Committee Act

The Federal Advisory Committee Act (5 U.S.C. App.) shall not apply with respect to the working group or the activities of the working group.