II 

118TH CONGRESS 

1ST SESSION S. 46 

To establish a small business and domestic production recovery investment 

facility, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 24 (legislative day, JANUARY 3), 2023 

Mr. RUBIO (for himself and Mr. RISCH) introduced the following bill; which 

was read twice and referred to the Committee on Small Business and Entrepreneurship 

A BILL 

To establish a small business and domestic production 

recovery investment facility, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Innovation 

5 and Manufacturing Act’’. 

6 SEC. 2. SMALL BUSINESS INVESTMENT COMPANY PRO7 GRAM. 

8 (a) IN GENERAL.—Part A of title III of the Small 

9 Business Investment Act of 1958 (15 U.S.C. 681 et seq.) 

10 is amended— 


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1 (1) in section 302(a) (15 U.S.C. 682(a))— 

2 (A) in paragraph (1)— 

3 (i) in subparagraph (A), by striking 

4 ‘‘or’’ at the end; 

5 (ii) in subparagraph (B), by striking 

6 the period at the end and inserting ‘‘; or’’; 

7 and 

8 (iii) by adding at the end the fol9 lowing: 

10 ‘‘(C) $20,000,000, adjusted every 5 years 

11 for inflation, with respect to each licensee au12 thorized or seeking authority to sell bonds to 

13 the Administration as a participating invest14 ment company under section 321.’’; and 

15 (2) by adding at the end the following: 

16 ‘‘SEC. 321. SMALL BUSINESS AND DOMESTIC PRODUCTION 

17 RECOVERY INVESTMENT FACILITY. 

18 ‘‘(a) DEFINITIONS.—In this section: 

19 ‘‘(1) ELIGIBLE SMALL BUSINESS CONCERN.— 

20 The term ‘eligible small business concern’— 

21 ‘‘(A) means a small business concern that 

22 is a manufacturing business that is assigned a 

23 North American Industry Classification System 

24 code beginning with 31, 32, or 33 at the time 

25 at which the small business concern receives an 


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1 investment from a participating investment 

2 company under the facility; and 

3 ‘‘(B) does not include an entity described 

4 in section 7(a)(37)(A)(iv)(III) of the Small 

5 Business Act (15 U.S.C. 

6 636(a)(37)(A)(iv)(III)). 

7 ‘‘(2) FACILITY.—The term ‘facility’ means the 

8 facility established under subsection (b). 

9 ‘‘(3) FUND.—The term ‘Fund’ means the fund 

10 established under subsection (h). 

11 ‘‘(4) PARTICIPATING INVESTMENT COMPANY.— 

12 The term ‘participating investment company’ means 

13 a small business investment company approved 

14 under subsection (d) to participate in the facility. 

15 ‘‘(5) PROTE ́GE ́ INVESTMENT COMPANY.—The 

16 term ‘prote ́ge ́ investment company’ means a small 

17 business investment company that— 

18 ‘‘(A) is majority managed by new, inexperi19 enced, or otherwise underrepresented fund man20 agers; and 

21 ‘‘(B) elects and is selected by the Adminis22 tration to participate in the pathway-prote ́ge ́

23 program under subsection (g). 

24 ‘‘(6) SMALL BUSINESS CONCERN.—The term 

25 ‘small business concern’ has the meaning given the 


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1 term in section 3(a) of the Small Business Act (15 

2 U.S.C. 632(a)). 

3 ‘‘(b) ESTABLISHMENT.— 

4 ‘‘(1) FACILITY.—The Administrator shall estab5 lish and carry out a facility to increase resiliency in 

6 the manufacturing supply chain of eligible small 

7 business concerns by providing financial assistance 

8 to participating investment companies that facilitate 

9 equity financings to eligible small business concerns 

10 in accordance with this section. 

11 ‘‘(2) ADMINISTRATION OF FACILITY.—The fa12 cility shall be administered by the Administrator act13 ing through the Associate Administrator described in 

14 section 201. 

15 ‘‘(c) APPLICATIONS.— 

16 ‘‘(1) IN GENERAL.—Any small business invest17 ment company may submit to the Administrator an 

18 application to participate in the facility. 

19 ‘‘(2) REQUIREMENTS FOR APPLICATION.—An 

20 application to participate in the facility shall include 

21 the following: 

22 ‘‘(A) A business plan describing how the 

23 applicant intends to make successful equity in24 vestments in eligible small business concerns. 


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1 ‘‘(B) Information regarding the relevant 

2 investment qualifications and backgrounds of 

3 the individuals responsible for the management 

4 of the applicant. 

5 ‘‘(C) A description of the extent to which 

6 the applicant meets the selection criteria under 

7 subsection (d)(2). 

8 ‘‘(3) EXCEPTIONS TO APPLICATION FOR NEW

9 LICENSEES.—Not later than 90 days after the date 

10 of enactment of this section, the Administrator shall 

11 reduce requirements for applicants applying to oper12 ate as a participating investment company under 

13 this section in order to encourage the participation 

14 of new small business investment companies in the 

15 facility under this section, which may include the re16 quirements established under part 107 of title 13, 

17 Code of Federal Regulations, or any successor regu18 lation, relating to— 

19 ‘‘(A) the approval of initial management 

20 expenses; 

21 ‘‘(B) the management ownership diversity 

22 requirement; 

23 ‘‘(C) the disclosure of general compen24 satory practices and fee structures; or 


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1 ‘‘(D) any other requirement that the Ad2 ministrator determines to be an obstacle to 

3 achieving the purposes described in this para4 graph. 

5 ‘‘(d) SELECTION OF PARTICIPATING INVESTMENT

6 COMPANIES.— 

7 ‘‘(1) DETERMINATION.— 

8 ‘‘(A) IN GENERAL.—Except as provided in 

9 paragraph (3), not later than 60 days after the 

10 date on which the Administrator receives an ap11 plication under subsection (c), the Adminis12 trator shall— 

13 ‘‘(i) make a final determination to ap14 prove or disapprove such applicant to par15 ticipate in the facility; and 

16 ‘‘(ii) transmit the determination to the 

17 applicant in writing. 

18 ‘‘(B) COMMITMENT AMOUNT.—Except as 

19 provided in paragraph (3), at the time of ap20 proval of an applicant, the Administrator shall 

21 make a determination of the amount of the 

22 commitment that may be awarded to the appli23 cant under this section. 


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1 ‘‘(2) SELECTION CRITERIA.—In making a de2 termination under paragraph (1), the Administrator 

3 shall consider— 

4 ‘‘(A) the probability that the investment 

5 strategy of the applicant will successfully repay 

6 any financial assistance provided by the Admin7 istration, including the probability of a return 

8 significantly in excess thereof; 

9 ‘‘(B) the probability that the investments 

10 made by the applicant will— 

11 ‘‘(i) provide capital to eligible small 

12 business concerns; or 

13 ‘‘(ii) create or preserve jobs in the 

14 United States; 

15 ‘‘(C) the probability that the applicant will 

16 meet the objectives in the business plan of the 

17 applicant, including the financial goals, and, if 

18 applicable, the pathway-prote ́ge ́ program in ac19 cordance with subsection (g); and 

20 ‘‘(D) the probability that the applicant will 

21 assist eligible small business concerns in achiev22 ing profitability. 

23 ‘‘(3) APPROVAL OF PARTICIPATING INVEST24 MENT COMPANIES.— 

25 ‘‘(A) PROVISIONAL APPROVAL.— 


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1 ‘‘(i) IN GENERAL.—Notwithstanding 

2 paragraph (1), with respect to an applica3 tion submitted by an applicant to operate 

4 as a participating investment company 

5 under this section, the Administrator may 

6 provide provisional approval for the appli7 cant in lieu of a final determination of ap8 proval and determination of the amount of 

9 the commitment under that paragraph. 

10 ‘‘(ii) PURPOSE.—The purpose of a 

11 provisional approval under clause (i) is 

12 to— 

13 ‘‘(I) encourage applications from 

14 investment companies with an invest15 ment mandate from the committed 

16 private market capital of the invest17 ment company that does not conform 

18 to the requirements described in this 

19 section at the time of application; 

20 ‘‘(II) allow the applicant to more 

21 effectively raise capital commitments 

22 in the private markets by referencing 

23 the intent of the Administrator to 

24 award the applicant a commitment; 

25 and 


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1 ‘‘(III) allow the applicant to more 

2 precisely request the desired amount 

3 of commitment pending the securing 

4 of capital from private market inves5 tors. 

6 ‘‘(iii) LIMIT ON PERIOD OF THE

7 TIME.—The period between a provisional 

8 approval under clause (i) and the final de9 termination of approval under paragraph 

10 (1) shall not exceed 12 months. 

11 ‘‘(e) COMMITMENTS AND SBIC BONDS.— 

12 ‘‘(1) IN GENERAL.—The Administrator may, 

13 out of amounts available in the Fund, purchase or 

14 commit to purchase from a participating investment 

15 company 1 or more accruing bonds that include eq16 uity features as described in this subsection. 

17 ‘‘(2) BOND TERMS.—A bond purchased by the 

18 Administrator from a participating investment com19 pany under this subsection shall have the following 

20 terms and conditions: 

21 ‘‘(A) TERM AND INTEREST.— 

22 ‘‘(i) IN GENERAL.—The bond shall be 

23 issued for a term of not less than 15 years 

24 and shall bear interest at a rate deterVerDate Sep 11 2014 03:36 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S46.IS S46

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1 mined by the Administrator of not more 

2 than 2 percent. 

3 ‘‘(ii) ACCRUAL OF INTEREST.—Inter4 est on the bond shall accrue and shall be 

5 payable in accordance with subparagraph 

6 (D). 

7 ‘‘(iii) PREPAYMENT.—The bond shall 

8 be prepayable without penalty after the 

9 end of the 1-year period beginning on the 

10 date on which the bond was purchased. 

11 ‘‘(B) PROFITS.— 

12 ‘‘(i) IN GENERAL.—The Administra13 tion shall be entitled to receive a share of 

14 the profits net of any profit sharing per15 formance compensation of the participating 

16 investment company equal to the quotient 

17 obtained by dividing— 

18 ‘‘(I) one-third of the commitment 

19 that the participating investment com20 pany is approved for under subsection 

21 (d); by 

22 ‘‘(II) the commitment approved 

23 under subsection (d) plus the regu24 latory capital of the participating inVerDate Sep 11 2014 03:36 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S46.IS S46

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1 vestment company at the time of ap2 proval under that subsection. 

3 ‘‘(ii) DETERMINATION OF PERCENT4 AGE.—The share to which the Administra5 tion is entitled under clause (i)— 

6 ‘‘(I) shall be determined at the 

7 time of approval under subsection (d); 

8 and 

9 ‘‘(II) without the approval of the 

10 Administration, shall not be revised, 

11 including to reflect subsequent dis12 tributions of profits, returns of cap13 ital, or repayments of bonds, or other14 wise. 

15 ‘‘(C) PROFIT SHARING PERFORMANCE

16 COMPENSATION.— 

17 ‘‘(i) RECEIPT BY ADMINISTRATION.— 

18 The Administration shall receive a share of 

19 profits of not more than 2 percent, which 

20 shall be deposited into the Fund and be 

21 available to make commitments under this 

22 subsection. 

23 ‘‘(ii) RECEIPT BY MANAGERS.—The 

24 managers of the participating investment 

25 company may receive a maximum profit 


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1 sharing performance compensation of 25 

2 percent minus the share of profits paid to 

3 the Administration under clause (i). 

4 ‘‘(D) PROHIBITION ON DISTRIBUTIONS.— 

5 No distributions on capital, including profit dis6 tributions, shall be made by the participating 

7 investment company to the investors or man8 agers of the participating investment company 

9 until the Administration has received payment 

10 of all accrued interest on the bond committed 

11 under this section. 

12 ‘‘(E) REPAYMENT OF PRINCIPAL.—Except 

13 as described in subparagraph (F), repayments 

14 of principal of the bond of a participating in15 vestment company shall be— 

16 ‘‘(i) made at the same time as returns 

17 of private capital; and 

18 ‘‘(ii) in amounts equal to the pro rata 

19 share of the Administration of the total 

20 amount being repaid or returned at such 

21 time. 

22 ‘‘(F) LIQUIDATION OR DEFAULT.—Upon 

23 any liquidation event or default, as defined by 

24 the Administration, any unpaid principal or ac25 crued interest on the bond shall— 


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1 ‘‘(i) have a priority over all equity of 

2 the participating investment company; and 

3 ‘‘(ii) be paid before any return of eq4 uity or any other distributions to the inves5 tors or managers of the participating in6 vestment company. 

7 ‘‘(3) AMOUNT OF COMMITMENTS AND PUR8 CHASES.— 

9 ‘‘(A) MAXIMUM AMOUNT.—The maximum 

10 amount of outstanding bonds and commitments 

11 to purchase bonds for any participating invest12 ment company under the facility shall be the 

13 lesser of— 

14 ‘‘(i) twice the amount of the regu15 latory capital of the participating invest16 ment company; or 

17 ‘‘(ii) $200,000,000. 

18 ‘‘(4) COMMITMENT PROCESS.—Commitments by 

19 the Administration to purchase bonds under the fa20 cility shall remain available to be sold by a partici21 pating investment company until the end of the 

22 fourth fiscal year following the year in which the 

23 commitment is made, subject to review and approval 

24 by the Administration based on regulatory compli25 ance, financial status, change in management, deviVerDate Sep 11 2014 03:36 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S46.IS S46

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1 ation from business plan, and such other limitations 

2 as may be determined by the Administration by reg3 ulation or otherwise. 

4 ‘‘(5) COMMITMENT CONDITIONS.— 

5 ‘‘(A) IN GENERAL.—As a condition of re6 ceiving a commitment under the facility, not 

7 less than 50 percent of amounts invested by the 

8 participating investment company shall be in9 vested in eligible small business concerns. 

10 ‘‘(B) EXAMINATIONS.—In addition to the 

11 matters set forth in section 310(c), the Admin12 istration shall examine each participating in13 vestment company in such detail so as to deter14 mine whether the participating investment com15 pany has complied with the requirements under 

16 this subsection. 

17 ‘‘(f) DISTRIBUTIONS AND FEES.— 

18 ‘‘(1) DISTRIBUTION REQUIREMENTS.— 

19 ‘‘(A) DISTRIBUTIONS.—As a condition of 

20 receiving a commitment under the facility, a 

21 participating investment company shall make 

22 all distributions to the Administrator in the 

23 same form and in a manner as are made to in24 vestors, or otherwise at a time and in a manner 


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1 consistent with regulations or policies of the 

2 Administration. 

3 ‘‘(B) ALLOCATIONS.—A participating in4 vestment company shall make allocations of in5 come, gain, loss, deduction, and credit to the 

6 Administrator with respect to any outstanding 

7 bonds as if the Administrator were an investor. 

8 ‘‘(2) FEES.—The Administrator may not 

9 charge fees for participating investment companies 

10 other than examination fees that are consistent with 

11 the license of the participating investment company. 

12 ‘‘(3) BIFURCATION.—Losses on bonds issued by 

13 participating investment companies shall not be off14 set by fees or any other charges on debenture small 

15 business investment companies. 

16 ‘‘(g) PROTE ́GE ́ PROGRAM.—The Administrator shall 

17 establish a pathway-prote ́ge ́ program in which a prote ́ge ́

18 investment company may receive technical assistance and 

19 program support from a participating investment company 

20 on a voluntary basis and without penalty for non-partici21 pation. 

22 ‘‘(h) LOSS LIMITING FUND.— 

23 ‘‘(1) IN GENERAL.—There is established in the 

24 Treasury a fund for making commitments and pur25 chasing bonds with equity features under the facility 


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1 and receiving capital returned by participating in2 vestment companies. 

3 ‘‘(2) USE OF FUNDS.—Amounts appropriated 

4 to the Fund or deposited in the Fund under para5 graph (3) shall be available to the Administrator, 

6 without further appropriation, for making commit7 ments and purchasing bonds under the facility and 

8 expenses and payments, excluding administrative ex9 penses, relating to the operations of the Adminis10 trator under the facility. 

11 ‘‘(3) DEPOSITING OF AMOUNTS.— 

12 ‘‘(A) IN GENERAL.—All amounts received 

13 by the Administrator from a participating in14 vestment company relating to the facility, in15 cluding any moneys, property, or assets derived 

16 by the Administrator from operations in con17 nection with the facility, shall be deposited in 

18 the Fund. 

19 ‘‘(B) PERIOD OF AVAILABILITY.—Amounts 

20 deposited under subparagraph (A) shall remain 

21 available until expended. 

22 ‘‘(i) APPLICATION OF OTHER SECTIONS.—To the ex23 tent not inconsistent with requirements under this section, 

24 the Administrator may apply sections 309, 311, 312, 313, 

25 and 314 to activities under this section and an officer, diVerDate Sep 11 2014 03:36 Jan 28, 2023 Jkt 039200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S46.IS S46

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1 rector, employee, agent, or other participant in a partici2 pating investment company shall be subject to the require3 ments under such sections. 

4 ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There 

5 is authorized to be appropriated for the first fiscal year 

6 beginning after the date of enactment of this part 

7 $10,000,000,000 to carry out the facility. Amounts appro8 priated pursuant to this subsection shall remain available 

9 until the end of the second fiscal year beginning after the 

10 date of enactment of this section.’’. 

11 (b) APPROVAL OF BANK-OWNED, NON-LEVERAGED

12 APPLICANTS.—Section 301(c)(2) of the Small Business 

13 Investment Act of 1958 (15 U.S.C. 681(c)(2)) is amend14 ed— 

15 (1) in subparagraph (B), in the matter pre16 ceding clause (i), by striking ‘‘Within’’ and inserting 

17 ‘‘Except as provided in subparagraph (C), within’’; 

18 and 

19 (2) by adding at the end the following: 

20 ‘‘(C) EXCEPTION FOR BANK-OWNED, NON21 LEVERAGED APPLICANTS.—Notwithstanding 

22 subparagraph (B), not later than 45 days after 

23 the date on which the Administrator receives a 

24 completed application submitted by a bank25 owned, non-leveraged applicant in accordance 


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1 with this subsection and in accordance with 

2 such requirements as the Administrator may 

3 prescribe by regulation, the Administrator 

4 shall— 

5 ‘‘(i) review the application in its en6 tirety; and 

7 ‘‘(ii)(I) approve the application and 

8 issue a license for such operation to the 

9 applicant if the requirements of this sec10 tion are satisfied; or 

11 ‘‘(II) disapprove the application and 

12 notify the applicant in writing of the dis13 approval.’’. 

14 (c) ELECTRONIC SUBMISSIONS.—Part A of title III 

15 of the Small Business Investment Act of 1958 (15 U.S.C. 

16 681 et seq.), as amended by subsection (a) of this section, 

17 is amended by adding at the end the following: 

18 ‘‘SEC. 322. ELECTRONIC SUBMISSIONS. 

19 ‘‘The Administration shall permit any document sub20 mitted under this title, or pursuant to a regulation car21 rying out this title, to be submitted electronically, includ22 ing by permitting an electronic signature for any signature 

23 that is required on such a document.’’. 

Æ 


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