to any 1 licensed company of the manager under 
section 7(b)(6)(B)(i)(I) shall be increased by 
$17,500,000; and 
(3) the otherwise applicable maximum amount 
of outstanding leverage that may be made available 
to any 2 or more licensed companies that are com-
monly controlled by the manager under section 
7(b)(6)(B)(i)(II) shall be increased by $35,000,000. 
SEC. 6. CAPITAL REQUIREMENTS. 
(a) AMOUNT.— 
(1) IN GENERAL.—The private capital of each 
licensee shall be not less than $10,000,000. 
(2) ADEQUACY.—In addition to the requirement 
under paragraph (1), the Secretary shall— 
(A) determine whether the private capital 
of each licensee is adequate to assure a reason-
able prospect that the licensee will be operated 
soundly and profitably, and managed actively 
and prudently in accordance with the articles of 
the licensee; and 
(B) determine whether the licensee will be 
able, both prior to licensing and prior to ap-
proving any request for financing, to make peri-
odic payments on any debt of the licensee that 
is interest bearing and shall take into consider-
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00035
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
ation the income that the licensee anticipates on 
the contemplated investments of the licensee, 
the experience of the owners and managers of 
the licensee, the history of the licensee as an 
entity, if any, and the financial resources of the 
licensee. 
(b) DIVERSIFICATION
OF OWNERSHIP.—The Sec-
retary shall ensure that the management of each licensee 
(including Prote´ge´ OICs) is sufficiently diversified from 
and unaffiliated with the ownership of the licensee in a 
manner that ensures independence and objectivity in the 
financial management and oversight of the investments 
and operations of the licensee. 
SEC. 7. BORROWING POWER. 
(a) IN GENERAL.—Each ownership investment com-
pany shall have authority to borrow money and to issue 
its securities, promissory notes, or other obligations under 
such general conditions and subject to such limitations 
and regulations as the Secretary may prescribe. 
(b) AUTHORITY TO GUARANTEE.— 
(1) GRANT OF AUTHORITY.—To encourage the 
formation and growth of ownership investment com-
panies the Secretary may, when authorized in appro-
priation Acts, guarantee the timely payment of all 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00036
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
principal and interest as scheduled on debentures 
issued by ownership investment companies. 
(2) TERMS
AND
CONDITIONS.—Guarantees 
made under paragraph (1) may be made by the Sec-
retary on such terms and conditions as the Secretary 
deems appropriate, pursuant to regulations issued by 
the Secretary. 
(3) FULL FAITH AND CREDIT.—The full faith 
and credit of the United States is pledged to the 
payment of all amounts that may be required to be 
paid under any guarantee under this subsection. 
(4) STATUS
OF
DEBENTURES.—Debentures 
guaranteed by the Department under this subsection 
shall be subordinate to any other debenture bonds, 
promissory notes, or other debts and obligations of 
an ownership investment company, unless the Sec-
retary, in the exercise of reasonable investment pru-
dence and in considering the financial soundness of 
such ownership investment company, determines 
otherwise. 
(5) TERM AND INTEREST RATE.—A debenture 
issued under this subsection may be issued for a 
term of not to exceed 15 years and shall bear inter-
est at a rate not less than a rate determined by the 
Secretary of the Treasury, taking into consideration 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00037
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
the current average market yield on outstanding 
marketable obligations of the United States with re-
maining periods to maturity comparable to the aver-
age maturities on such debentures, adjusted to the 
nearest 1⁄8 of 1 per centum, plus an additional 
charge, in an amount established annually by the 
Secretary, as necessary to reduce to 0 the cost (as 
defined in section 502 of the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661a)) to the Department 
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 Depart-
ment. 
(6) ADDITIONAL
RESTRICTIONS
AND
LIMITA-
TIONS.—A debenture issued under this subsection— 
(A) shall include such other terms as the 
Department may fix; and 
(B) shall be subject to the following re-
strictions and limitations: 
(i)(I) The maximum amount of out-
standing leverage made available to any 1 
ownership investment company licensed 
under section 4(c) that is not a Prote´ge´ 
OIC may not exceed the lesser of— 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00038
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
(aa) 100 percent of the private 
capital of such company; or 
(bb) $500,000,000. 
(II) The maximum amount of out-
standing leverage made available to 2 or 
more ownership investment companies li-
censed under section 4(c) that are com-
monly controlled (as determined by the 
Secretary) and not under capital impair-
ment may not exceed $1,000,000,000. 
(ii) A Prote´ge´ OIC may not have mul-
tiple licenses under common control. 
(iii) The maximum amount of out-
standing leverage made available under the 
facility established under section 3 to any 
1 Prote´ge´ OIC may not to exceed the less-
er of— 
(I) 100 percent of the private 
capital of the Prote´ge´ OIC; or 
(II) $100,000,000. 
(iv)(I) In calculating the outstanding 
leverage of a company for the purposes of 
subclauses (I) and (II) of clause (i), the 
Secretary shall not include the amount of 
the cost basis of any covered investment 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00039
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
made by the ownership investment com-
pany in a covered business concern that— 
(aa) conducts in the United 
States research and development, en-
gineering, or production activities nec-
essary or incidental to manufacturing; 
(bb) operates in a critical indus-
try or critical technology area identi-
fied by the Secretary to be vital to 
maintaining the national or economic 
security of the United States; and 
(cc) is headquartered in the 
United 
States, 
or 
will 
be 
headquartered in the United States 
immediately following the transaction 
in the case of a covered investment 
described in section 2(6)(A). 
(II) The exclusion of amounts in sub-
clause (I) shall not exceed a total of 
$75,000,000 or 25 percent of private cap-
ital of such company, whichever is less. 
(III) Subclause (I) shall not apply to 
any Prote´ge´ OIC. 
(v) Nothing in this paragraph shall 
prevent licensees with 1 or more small 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00040
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
business investment companies licensed 
under section 301(c) of the Small Business 
Investment Act of 1958 (15 U.S.C. 681) 
under common control (as determined by 
the Secretary), including licensees whose 
small business investment companies have 
received the maximum amount of leverage 
in sections 303(b)(2)(A) or 303(b)(2)(B) 
of that Act, from receiving the maximum 
amount of leverage in clause (i). 
(c) THIRD-PARTY DEBT.—The Secretary— 
(1) may not permit a licensee having out-
standing leverage to incur third-party debt that 
would create or contribute to an unreasonable risk 
of default or loss to the Federal Government; and 
(2) shall permit any licensee to incur third- 
party debt only on such terms and subject to such 
conditions as may be established by the Secretary, 
by regulation or otherwise. 
(d) CAPITAL IMPAIRMENT.—Before approving any 
application for leverage submitted by a licensee under this 
Act, the Secretary— 
(1) shall determine that the private capital of 
the licensee meets the requirements of section 6(a); 
and 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00041
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
(2) shall determine, taking into account the na-
ture of the assets of the licensee, the amount and 
terms of any third-party debt owed by such licensee, 
and any other factors determined to be relevant by 
the Secretary, that the private capital of the licensee 
has not been impaired to such an extent that the 
issuance of additional leverage would create or oth-
erwise contribute to an unreasonable risk of default 
or loss to the Federal Government. 
(e) LEVERAGE FEE.—With respect to leverage grant-
ed by the Department to a licensee, the Department shall 
collect from the licensee a nonrefundable fee in an amount 
equal to 3 percent of the face amount of leverage granted 
to the licensee in the following manner: 
(1) One percent upon the date on which the De-
partment enters into any commitment for such lever-
age with the licensee. 
(2) The balance of 2 percent (or 3 percent if no 
commitment has been entered into by the Depart-
ment) on the date on which the leverage is drawn by 
the licensee. 
(f) CALCULATION OF SUBSIDY RATE.—All fees and 
interest received and retained by the Department under 
this section shall be included in the calculations made by 
the Director of the Office of Management and Budget to 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00042
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
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 Department of guaranteeing debentures under this 
Act. 
SEC. 8. PROVISION OF INVESTMENT CAPITAL FOR COV-
ERED BUSINESS CONCERNS. 
(a) IN GENERAL.—Each ownership investment com-
pany shall provide a source of debt, synthetic equity, pre-
ferred stock, or equity capital, or a combination thereof, 
for incorporated and unincorporated covered business con-
cerns, in such manner and under such terms as the owner-
ship investment company may fix in accordance with the 
regulations established by the Department. 
(b) REQUIREMENT.—Before any capital described in 
subsection (a) is provided to a covered business concern 
under this section— 
(1) the ownership investment company may re-
quire a covered business concern to refinance any or 
all of the outstanding indebtedness of the covered 
business concern so that the ownership investment 
company is the only holder of any evidence of in-
debtedness of the covered business concern; and 
(2) except as provided in regulations issued by 
the Secretary, such the covered business concern 
shall agree that the covered business concern will 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00043
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
not thereafter incur any indebtedness without first 
securing the approval of the ownership investment 
company and giving the ownership investment com-
pany the first opportunity to finance such indebted-
ness. 
(c) THIRD-PARTY INVESTORS.—Investment capital 
provided to covered business concerns under this section 
may be provided directly or in cooperation with other in-
vestors, incorporated or unincorporated, through agree-
ments to participate on an immediate or deferred basis. 
(d) INTEREST.—The maximum rate of interest for 
the share of an ownership investment company of any loan 
made under this section shall be determined by the Sec-
retary— 
(1) provided that the Department also shall 
permit those ownership investment companies that 
have issued debentures pursuant to this Act to 
charge a maximum rate of interest based upon the 
coupon rate of interest on the outstanding deben-
tures, determined on an annual basis, plus such 
other expenses of the ownership investment company 
as may be approved by the Department; and 
(2) in making the initial determinations on the 
maximum rate of interest under this subsection fol-
lowing the enactment of this Act, the Secretary shall 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00044
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS
(A) the total number of active plan partici-
pants; 
(B) the total number of employees of the 
covered business concerns with such employee 
stock ownership plans; 
(C) the total value of employer securities, 
as determined by the independent appraisers 
hired by the independent trustee of each em-
ployee stock ownership plan; 
(D) the total plan assets; 
(E) the total contributions during the plan 
year; 
(F) the total distributions during the plan 
year; 
(G) the median account asset balance; and 
(H) demographic information of plan par-
ticipants, disaggregated by race, gender, and 
State, to the extent available. 
(12) A summary of eligible worker-owned co-
operatives created by ownership investment compa-
nies (including Prote´ge´ OICs), including— 
(A) the number of member-owners; 
(B) the total number of employees of the 
covered business concern with such eligible 
worker-owned cooperatives; 
VerDate Sep 11 2014 
01:19 May 31, 2025
Jkt 059200
PO 00000
Frm 00052
Fmt 6652
Sfmt 6201
E:\BILLS\H3248.IH
H3248
ssavage on LAPJG3WLY3PROD with BILLS