Rural Capital Access Act
Bill: S.1058 | Sponsor: Sen. Thune, John (R-SD)
Policy area: Commerce

Summary:
Rural Capital Access Act
This bill increases federally backed leverage, or investments, available to small businesses in rural areas through Small Business Administration (SBA) programs. Specifically, the bill (1) reduces restrictions on federally backed leverage for small business investment companies (SBICs) investing in small businesses located in rural areas, and (2) allows the SBA to extend as leverage to rural business investment companies certain unexpended amounts intended for SBICs.
The bill also establishes an interagency working group comprised of the SBA, the Department of Agriculture, and industry stakeholders to develop administrative and legislative recommendations to improve program coordination and capital access in rural areas.

To amend the Small Business Investment Act of 1958 to provide 
  opportunities to rural business investment companies, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

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

SEC. 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).

SEC. 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:

``SEC. 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.

SEC. 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.
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