Capital for Cooperatives Act
Bill: H.R.6317 | Sponsor: Rep. Neguse, Joe (D-CO)
Policy area: Commerce

Summary:
Capital for Cooperatives Act
This bill eliminates the requirement that cooperatives provide a personal guarantee with respect to certain Small Business Administration (SBA) loans. It also requires the SBA, in collaboration with the Interagency Working Group on Cooperative Development, to develop recommendations and cooperate with federal agencies and other entities to promote, support, and increase the number of cooperatives.

To amend the Small Business Act to address the participation of 
cooperatives in the program carried out under section 7(a) of that Act, 
                        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 ``Capital for Cooperatives Act''.

SEC. 2. FINDINGS.

    Congress finds the following:
            (1) Cooperative businesses operate on the basis of 1 
        member, 1 vote.
            (2) Cooperatives have helped to improve the economic 
        conditions of the people of the United States for more than a 
        century by increasing competition and helping small players 
        gain parity in the market.
            (3) Research has shown that cooperatives are more resilient 
        to economic business cycles than other business models because 
        cooperatives require member-owners of the cooperative to work 
        together and prepare for the future.
            (4) The mission of the Small Business Administration 
        (referred to in this Act as the ``Administration'') is to help 
        the people of the United States start, build, and grow 
        businesses.
            (5) The requirement of the Administration that some 
        borrowers provide a personal guarantee with respect to certain 
        Administration loans has prevented cooperatives from accessing 
        the safe and affordable financing available from the 
        Administration.

SEC. 3. COOPERATIVES.

    (a) In General.--Section 7(a)(15)(B)(iv) of the Small Business Act 
(15 U.S.C. 636(a)(15)(B)(iv)) is amended--
            (1) in the matter preceding subclause (I), by striking ``, 
        or to a cooperative in accordance with paragraph (35)''; and
            (2) in subclause (I), by striking ``or cooperative''.
    (b) SBA Responsibilities.--
            (1) Definitions.--In this subsection:
                    (A) Administrator.--The term ``Administrator'' 
                means the Administrator of the Administration.
                    (B) Cooperative.--The term ``cooperative'' has the 
                meaning given the term in section 7(a)(35) of the Small 
                Business Act (15 U.S.C. 636(a)(35)).
                    (C) Program.--The term ``Program'' means the 
                program carried out under section 7(a) of the Small 
                Business Act (15 U.S.C. 636(a)).
                    (D) Small business concern.--The term ``small 
                business concern'' has the meaning given the term in 
                section 3(a) of the Small Business Act (15 U.S.C. 
                632(a)).
                    (E) Working group.--The term ``Working Group'' 
                means the interagency working group coordinated and 
                chaired by the Secretary of Agriculture pursuant to 
                section 310B(e)(12) of the Consolidated Farm and Rural 
                Development Act (7 U.S.C. 1932(e)(12)), as amended by 
                subsection (c).
            (2) Coordination; amendments to rules; report.--The 
        Administrator shall--
                    (A) beginning not later than 60 days after the date 
                of enactment of this Act, coordinate and participate 
                with the Working Group to--
                            (i) develop recommendations regarding how 
                        the Administrator can coordinate with the heads 
                        of other Federal agencies to promote, support, 
                        and increase the number of cooperatives; and
                            (ii) ensure coordination between the 
                        Administrator and--
                                    (I) other Federal agencies; and
                                    (II) national and local 
                                organizations representing cooperatives 
                                and small business concerns;
                    (B) not later than 180 days after the date of 
                enactment of this Act--
                            (i) amend the rules of the Administration 
                        with respect to guarantees for loans made to 
                        cooperatives under the Program, which may 
                        include--
                                    (I) requiring the Administrator to 
                                guarantee a loan made to a cooperative 
                                under the Program if the lender with 
                                respect to the loan can demonstrate 
                                that the cooperative is able to repay 
                                the loan; and
                                    (II) establishing lending criteria 
                                for cooperatives under the Program that 
                                are not based on personal or entity 
                                guarantees provided by the member-
                                owners of the cooperative; and
                            (ii) submit to Congress a report 
                        documenting the amendments made under clause 
                        (i); and
                    (C) not later than 1 year after the date of 
                enactment of this Act, submit to Congress a report 
                regarding--
                            (i) education regarding cooperatives that 
                        the Administrator has provided to--
                                    (I) officials of the 
                                Administration;
                                    (II) lenders participating in the 
                                Program; and
                                    (III) small business development 
                                centers described in section 21 of the 
                                Small Business Act (15 U.S.C. 648); and
                            (ii) during the period beginning on the 
                        date of enactment of this Act and ending on the 
                        date on which the report is submitted--
                                    (I) the number of applications 
                                submitted by cooperatives for loans 
                                under the Program; and
                                    (II) the number of applications 
                                received under subclause (I) that were 
                                approved by the Administrator.
    (c) Interagency Working Group on Cooperative Development.--Section 
310B(e)(12) of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1932(e)(12)) is amended--
            (1) by striking ``Not later'' and inserting the following:
                    ``(A) In general.--Not later''; and
            (2) by adding at the end the following:
                    ``(B) Meetings.--The interagency working group 
                described in subparagraph (A)--
                            ``(i) shall meet--
                                    ``(I) at such times determined 
                                necessary by the Secretary; and
                                    ``(II) not less frequently than 
                                biannually; and
                            ``(ii) may conduct meetings in person or 
                        through the use of electronic resources.''.
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