I 

118TH CONGRESS 

1ST SESSION H. R. 580 

To establish a small business and domestic production recovery investment 

facility, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 26, 2023 

Ms. TENNEY introduced the following bill; which was referred to the 

Committee on Small Business 

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)(1) (15 U.S.C. 

2 682(a)(1))— 

3 (A) in subparagraph (A), by striking ‘‘or’’ 

4 at the end; 

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

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

7 (C) by adding at the end the following: 

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

9 for inflation, with respect to each licensee au10 thorized or seeking authority to sell bonds to 

11 Administration as a participating investment 

12 company under section 321.’’; and 

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

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

15 RECOVERY INVESTMENT FACILITY. 

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

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

18 The term ‘eligible small business concern’— 

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

20 is a manufacturing business that is assigned a 

21 North American Industry Classification System 

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

23 at which the small business concern receives an 

24 investment from a participating investment 

25 company under the facility; and 


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

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

3 Business Act (15 U.S.C. 

4 636(a)(37)(A)(iv)(III)). 

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

6 facility established under subsection (b). 

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

8 established under subsection (h). 

9 ‘‘(4) PARTICIPATING INVESTMENT COMPANY.— 

10 The term ‘participating investment company’ means 

11 a small business investment company approved 

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

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

14 term ‘prote ́ge ́ investment company’ means a small 

15 business investment company that— 

16 ‘‘(A) is majority managed by new, inexperi17 enced, or otherwise underrepresented fund man18 agers; and 

19 ‘‘(B) elects and is selected by the Adminis20 tration to participate in the pathway-prote ́ge ́

21 program under subsection (g). 

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

23 ‘small business concern’ has the meaning given the 

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

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


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1 ‘‘(b) ESTABLISHMENT.— 

2 ‘‘(1) FACILITY.—The Administrator shall estab3 lish and carry out a facility to increase resiliency in 

4 the manufacturing supply chain of eligible small 

5 business concerns by providing financial assistance 

6 to participating investment companies that facilitate 

7 equity financings to eligible small business concerns 

8 in accordance with this section. 

9 ‘‘(2) ADMINISTRATION OF FACILITY.—The fa10 cility shall be administered by the Administrator act11 ing through the Associate Administrator described in 

12 section 201. 

13 ‘‘(c) APPLICATIONS.— 

14 ‘‘(1) IN GENERAL.—Any small business invest15 ment company may submit to the Administrator an 

16 application to participate in the facility. 

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

18 application to participate in the facility shall include 

19 the following: 

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

21 applicant intends to make successful equity in22 vestments in eligible small business concerns. 

23 ‘‘(B) Information regarding the relevant 

24 investment qualifications and backgrounds of 


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1 the individuals responsible for the management 

2 of the applicant. 

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

4 the applicant meets the selection criteria under 

5 subsection (d)(2). 

6 ‘‘(3) EXCEPTIONS TO APPLICATION FOR NEW

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

8 of enactment of this section, the Administrator shall 

9 reduce requirements for applicants applying to oper10 ate as a participating investment company under 

11 this section in order to encourage the participation 

12 of new small business investment companies in the 

13 facility under this section, which may include the re14 quirements established under part 107 of title 13, 

15 Code of Federal Regulations, or any successor regu16 lation, relating to— 

17 ‘‘(A) the approval of initial management 

18 expenses; 

19 ‘‘(B) the management ownership diversity 

20 requirement; 

21 ‘‘(C) the disclosure of general compen22 satory practices and fee structures; or 

23 ‘‘(D) any other requirement that the Ad24 ministrator determines to be an obstacle to 


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1 achieving the purposes described in this para2 graph. 

3 ‘‘(d) SELECTION OF PARTICIPATING INVESTMENT

4 COMPANIES.— 

5 ‘‘(1) DETERMINATION.— 

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

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

8 date on which the Administrator receives an ap9 plication under subsection (c), the Adminis10 trator shall— 

11 ‘‘(i) make a final determination to ap12 prove or disapprove such applicant to par13 ticipate in the facility; and 

14 ‘‘(ii) transmit the determination to the 

15 applicant in writing. 

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

17 provided in paragraph (3), at the time of ap18 proval of an applicant, the Administrator shall 

19 make a determination of the amount of the 

20 commitment that may be awarded to the appli21 cant under this section. 

22 ‘‘(2) SELECTION CRITERIA.—In making a de23 termination under paragraph (1), the Administrator 

24 shall consider— 


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1 ‘‘(A) the probability that the investment 

2 strategy of the applicant will successfully repay 

3 any financial assistance provided by the Admin4 istration, including the probability of a return 

5 significantly in excess thereof; 

6 ‘‘(B) the probability that the investments 

7 made by the applicant will— 

8 ‘‘(i) provide capital to eligible small 

9 business concerns; or 

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

11 United States; 

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

13 meet the objectives in the business plan of the 

14 applicant, including the financial goals, and, if 

15 applicable, the pathway-prote ́ge ́ program in ac16 cordance with subsection (g); and 

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

18 assist eligible small business concerns in achiev19 ing profitability. 

20 ‘‘(3) APPROVAL OF PARTICIPATING INVEST21 MENT COMPANIES.— 

22 ‘‘(A) PROVISIONAL APPROVAL.— 

23 ‘‘(i) IN GENERAL.—Notwithstanding 

24 paragraph (1), with respect to an applica25 tion submitted by an applicant to operate 


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1 as a participating investment company 

2 under this section, the Administrator may 

3 provide provisional approval for the appli4 cant in lieu of a final determination of ap5 proval and determination of the amount of 

6 the commitment under that paragraph. 

7 ‘‘(ii) PURPOSE.—The purpose of a 

8 provisional approval under clause (i) is 

9 to— 

10 ‘‘(I) encourage applications from 

11 investment companies with an invest12 ment mandate from the committed 

13 private market capital of the invest14 ment company that does not conform 

15 to the requirements described in this 

16 section at the time of application; 

17 ‘‘(II) allow the applicant to more 

18 effectively raise capital commitments 

19 in the private markets by referencing 

20 the intent of the Administrator to 

21 award the applicant a commitment; 

22 and 

23 ‘‘(III) allow the applicant to more 

24 precisely request the desired amount 

25 of commitment pending the securing 


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1 of capital from private market inves2 tors. 

3 ‘‘(iii) LIMIT ON PERIOD OF THE

4 TIME.—The period between a provisional 

5 approval under clause (i) and the final de6 termination of approval under paragraph 

7 (1) shall not exceed 12 months. 

8 ‘‘(e) COMMITMENTS AND SBIC BONDS.— 

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

10 out of amounts available in the Fund, purchase or 

11 commit to purchase from a participating investment 

12 company 1 or more accruing bonds that include eq13 uity features as described in this subsection. 

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

15 Administrator from a participating investment com16 pany under this subsection shall have the following 

17 terms and conditions: 

18 ‘‘(A) TERM AND INTEREST.— 

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

20 issued for a term of not less than 15 years 

21 and shall bear interest at a rate deter22 mined by the Administrator of not more 

23 than 2 percent. 

24 ‘‘(ii) ACCRUAL OF INTEREST.—Inter25 est on the bond shall accrue and shall be 


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1 payable in accordance with subparagraph 

2 (D). 

3 ‘‘(iii) PREPAYMENT.—The bond shall 

4 be prepayable without penalty after the 

5 end of the 1-year period beginning on the 

6 date on which the bond was purchased. 

7 ‘‘(B) PROFITS.— 

8 ‘‘(i) IN GENERAL.—The Administra9 tion shall be entitled to receive a share of 

10 the profits net of any profit sharing per11 formance compensation of the participating 

12 investment company equal to the quotient 

13 obtained by dividing— 

14 ‘‘(I) one-third of the commitment 

15 that the participating investment com16 pany is approved for under subsection 

17 (d); by 

18 ‘‘(II) the commitment approved 

19 under subsection (d) plus the regu20 latory capital of the participating in21 vestment company at the time of ap22 proval under that subsection. 

23 ‘‘(ii) DETERMINATION OF PERCENT24 AGE.—The share to which the Administra25 tion is entitled under clause (i)— 


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1 ‘‘(I) shall be determined at the 

2 time of approval under subsection (d); 

3 and 

4 ‘‘(II) without the approval of the 

5 Administration, shall not be revised, 

6 including to reflect subsequent dis7 tributions of profits, returns of cap8 ital, or repayments of bonds, or other9 wise. 

10 ‘‘(C) PROFIT SHARING PERFORMANCE

11 COMPENSATION.— 

12 ‘‘(i) RECEIPT BY ADMINISTRATION.— 

13 The Administration shall receive a share of 

14 profits of not more than 2 percent, which 

15 shall be deposited into the Fund and be 

16 available to make commitments under this 

17 subsection. 

18 ‘‘(ii) RECEIPT BY MANAGERS.—The 

19 managers of the participating investment 

20 company may receive a maximum profit 

21 sharing performance compensation of 25 

22 percent minus the share of profits paid to 

23 the Administration under clause (i). 

24 ‘‘(D) PROHIBITION ON DISTRIBUTIONS.— 

25 No distributions on capital, including profit disVerDate Sep 11 2014 00:48 Feb 10, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H580.IH H580

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1 tributions, shall be made by the participating 

2 investment company to the investors or man3 agers of the participating investment company 

4 until the Administration has received payment 

5 of all accrued interest on the bond committed 

6 under this section. 

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

8 as described in subparagraph (F), repayments 

9 of principal of the bond of a participating in10 vestment company shall be— 

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

12 of private capital; and 

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

14 share of the Administration of the total 

15 amount being repaid or returned at such 

16 time. 

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

18 any liquidation event or default, as defined by 

19 the Administration, any unpaid principal or ac20 crued interest on the bond shall— 

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

22 the participating investment company; and 

23 ‘‘(ii) be paid before any return of eq24 uity or any other distributions to the invesVerDate Sep 11 2014 00:48 Feb 10, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H580.IH H580

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1 tors or managers of the participating in2 vestment company. 

3 ‘‘(3) AMOUNT OF COMMITMENTS AND PUR4 CHASES.— 

5 ‘‘(A) MAXIMUM AMOUNT.—The maximum 

6 amount of outstanding bonds and commitments 

7 to purchase bonds for any participating invest8 ment company under the facility shall be the 

9 lesser of— 

10 ‘‘(i) twice the amount of the regu11 latory capital of the participating invest12 ment company; or 

13 ‘‘(ii) $200,000,000. 

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

15 the Administration to purchase bonds under the fa16 cility shall remain available to be sold by a partici17 pating investment company until the end of the 

18 fourth fiscal year following the year in which the 

19 commitment is made, subject to review and approval 

20 by the Administration based on regulatory compli21 ance, financial status, change in management, devi22 ation from business plan, and such other limitations 

23 as may be determined by the Administration by reg24 ulation or otherwise. 

25 ‘‘(5) COMMITMENT CONDITIONS.— 


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1 ‘‘(A) IN GENERAL.—As a condition of re2 ceiving a commitment under the facility, not 

3 less than 50 percent of amounts invested by the 

4 participating investment company shall be in5 vested in eligible small business concerns. 

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

7 matters set forth in section 310(c), the Admin8 istration shall examine each participating in9 vestment company in such detail so as to deter10 mine whether the participating investment com11 pany has complied with the requirements under 

12 this subsection. 

13 ‘‘(f) DISTRIBUTIONS AND FEES.— 

14 ‘‘(1) DISTRIBUTION REQUIREMENTS.— 

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

16 receiving a commitment under the facility, a 

17 participating investment company shall make 

18 all distributions to the Administrator in the 

19 same form and in a manner as are made to in20 vestors, or otherwise at a time and in a manner 

21 consistent with regulations or policies of the 

22 Administration. 

23 ‘‘(B) ALLOCATIONS.—A participating in24 vestment company shall make allocations of in25 come, gain, loss, deduction, and credit to the 


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1 Administrator with respect to any outstanding 

2 bonds as if the Administrator were an investor. 

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

4 charge fees for participating investment companies 

5 other than examination fees that are consistent with 

6 the license of the participating investment company. 

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

8 participating investment companies shall not be off9 set by fees or any other charges on debenture small 

10 business investment companies. 

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

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

13 investment company may receive technical assistance and 

14 program support from a participating investment company 

15 on a voluntary basis and without penalty for non-partici16 pation. 

17 ‘‘(h) LOSS LIMITING FUND.— 

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

19 Treasury a fund for making commitments and pur20 chasing bonds with equity features under the facility 

21 and receiving capital returned by participating in22 vestment companies. 

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

24 to the Fund or deposited in the Fund under para25 graph (3) shall be available to the Administrator, 


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1 without further appropriation, for making commit2 ments and purchasing bonds under the facility and 

3 expenses and payments, excluding administrative ex4 penses, relating to the operations of the Adminis5 trator under the facility. 

6 ‘‘(3) DEPOSITING OF AMOUNTS.— 

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

8 by the Administrator from a participating in9 vestment company relating to the facility, in10 cluding any moneys, property, or assets derived 

11 by the Administrator from operations in con12 nection with the facility, shall be deposited in 

13 the Fund. 

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

15 deposited under subparagraph (A) shall remain 

16 available until expended. 

17 ‘‘(i) APPLICATION OF OTHER SECTIONS.—To the ex18 tent not inconsistent with requirements under this section, 

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

20 and 314 to activities under this section and an officer, di21 rector, employee, agent, or other participant in a partici22 pating investment company shall be subject to the require23 ments under such sections. 

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

25 is authorized to be appropriated for the first fiscal year 


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1 beginning after the date of enactment of this part 

2 $10,000,000,000 to carry out the facility. Amounts appro3 priated pursuant to this subsection shall remain available 

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

5 date of enactment of this section.’’. 

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

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

8 Investment Act of 1958 (15 U.S.C. 681(c)(2)) is amend9 ed— 

10 (1) in subparagraph (B), in the matter pre11 ceding clause (i), by striking ‘‘Within’’ and inserting 

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

13 and 

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

15 ‘‘(C) EXCEPTION FOR BANK-OWNED, NON16 LEVERAGED APPLICANTS.—Notwithstanding 

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

18 the date on which the Administrator receives a 

19 completed application submitted by a bank20 owned, non-leveraged applicant in accordance 

21 with this subsection and in accordance with 

22 such requirements as the Administrator may 

23 prescribe by regulation, the Administrator 

24 shall— 


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1 ‘‘(i) review the application in its en2 tirety; and 

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

4 issue a license for such operation to the 

5 applicant if the requirements of this sec6 tion are satisfied; or 

7 ‘‘(II) disapprove the application and 

8 notify the applicant in writing of the dis9 approval.’’. 

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

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

12 681 et seq.), as amended by subsection (a) of this section, 

13 is further amended by adding at the end the following: 

14 ‘‘SEC. 322. ELECTRONIC SUBMISSIONS. 

15 ‘‘The Administration shall permit any document sub16 mitted under this title, or pursuant to a regulation car17 rying out this title, to be submitted electronically, includ18 ing by permitting an electronic signature for any signature 

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

Æ 


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