Sec. 100401. Increasing equity investment by the SBIC program
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In addition to amounts otherwise available, there is appropriated to the Administration for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, to remain available until September 30, 2031, $9,500,000,000, to be deposited into the facility established under section 321 of the Small Business Investment Act of 1958, as added by paragraph (2). The Small Business Investment Act of 1958 ( 15 U.S.C. 661 et seq. ) is amended— in section 103 ( 15 U.S.C. 662 )— in paragraph (9)(B)(iii)— in subclause (II), by striking and at the end; in subclause (III), by adding and at the end; and by adding at the end the following: funds obtained from any financial institution identified under section 302(b); ; and in paragraph (10)— in subparagraph (A), by adding and at the end; and by striking subparagraphs
(B)and
(C)and inserting the following: partnership interests purchased by the Administration, as described in section 321. ; in section 302(a)(1) ( 15 U.S.C. 682(a)(1) )— in subparagraph (A), by striking or at the end; in subparagraph (B), by striking the period at the end and inserting ; or ; and by adding at the end the following: $20,000,000, adjusted every 5 years for inflation, with respect to each licensee participating in the facility under section 321. ; in section 303(b)(2)(B) ( 15 U.S.C. 683(b)(2)(B) ), by striking $350,000,000 and inserting $400,000,000 ; and in section 304— Notwithstanding section 310(c)(6), a licensee under section 321 may, subject to regulations to be issued by the Administration, invest equity capital in investment funds which— are majority controlled by members of an underrepresented community (as defined in section 50 of the Small Business Act); receive annual assistance provided by such licensee; or meet additional criteria as determined by the Administration. ; and by adding at the end the following: In this section: The term covered investments means investments in— infrastructure, including— roads, bridges, and mass transit; water supply and sewer; the electrical grid; broadband and telecommunications; clean energy; or child care and elder care; manufacturing; low-income communities, as that term is defined in section 45D(e) of the Internal Revenue Code of 1986; HUBZones, as defined in section 31(b) of the Small Business Act; small business concerns owned and controlled by a member of an Indian tribe individually identified (including parenthetically) in the most recent list published pursuant to section 104 of the Federally Recognized Indian Tribe List Act of 1994; small business concerns owned and controlled by an individual with a disability, as defined in section 3 of the Americans with Disabilities Act of 1990; small business concerns owned and controlled by a veteran; or small business concerns identified by the Administrator as critical. The term facility means the facility established under subsection (b). The term partnership interest means a limited partnership equity interest in a licensee purchased and held by the Administration under this section. The term venture small business investment company means a private equity fund— that makes early-stage venture capital investments in small business concerns approved to participate in the facility by the Administration; and for which 75 percent of total financings shall be invested in covered investments, of which not more than 33 percent of such investments are in small business concerns in infrastructure or manufacturing. The Administrator shall establish and carry out a facility to purchase partnership interests from venture small business investment companies. The facility shall be administered by the Administrator acting through the Associate Administrator described in section 201. The Administrator shall use amounts deposited in the facility to purchase partnership interests from venture small business investment companies. Losses to the Administration under this section— shall not be offset by fees or any other charges on licenses not authorized by the Administration; shall be borne solely by the facility; and shall not be included in the calculation of the subsidy rate under section 303(j). A venture small business investment company shall be licensed under section 301(c) and approved by the Administrator to issue partnership interests. In issuing a license under paragraph (1), the Administrator shall take into consideration investment risk through criteria set by the Administrator. Except as described in paragraph (2), a venture small business investment company shall invest solely in small business concerns. Notwithstanding section 310(c)(6) and subject to rules issued by the Administrator, a venture small business investment company may invest equity capital in venture capital funds if— such venture capital funds are majority controlled by underrepresented individuals; not less than 50 percent of total capital of each such venture capital fund is invested in covered investments; and the venture small business investment company provides annual assistance to the venture capital fund. The Administrator may, out of amounts available in the facility, purchase partnership interests as described in this subsection. The Administrator may purchase venture equity securities issued by a venture small business investment company in an amount that does not exceed the lesser of 100 percent of the private capital of the venture small business investment company or a lesser amount to be determined by the Administrator. A partnership interest purchased by the Administrator from a venture small business investment company under this subsection shall be subject to such restrictions and limitations as the Administrator may determine. . In addition to amounts otherwise available, there is appropriated to the Small Business Administration for fiscal year 2022, out of any money in the Treasury not otherwise appropriated, $20,000,000, to remain available until September 30, 2031, for carrying out this subsection. The Small Business Investment Act of 1958 ( 15 U.S.C. 661 et seq. ), as amended by subsection (a), is further amended by adding at the end the following: In this section: The term covered investments has the meaning given in section 321. The term emerging manager company means an investment management firm that is focused on investing private equity that meets not less than 2 of the following criteria: The partners of the firm have— an investment track record of less than 10 years of combined investment experience; or a documented record of successful business experience. The firm has a focus on underserved markets. The firm is not less than 50 percent owned, managed, or controlled by members of an underrepresented community (as defined in section 50 of the Small Business Act). The Administrator shall establish an emerging managers program pursuant to which managers with substantial experience in operating small business investment companies may enter into a written agreement approved by the Administrator to provide guidance and assistance to an applicant for a license for a small business investment company that is to be managed by an emerging manager company. The manager with substantial experience may hold a minority financial interest in the small business investment company that is to be managed by an emerging manager company. An applicant described in subsection
(b)shall apply with for a license under section 301(c) and shall— have private capital not to exceed $100,000,000; be managed by not less than two individuals; be a second generation fund or earlier; and focus its investment strategy on covered investments. The approval of a written agreement under subsection
(b)by the Administrator shall operate as a waiver of the requirements of section 303(b)(2)(B) to the extent that such section would otherwise apply. An existing small business investment company that enters into a written agreement under subsection
(b)that is approved by the Administrator may increase the maximum leverage cap of the company under section 303(b)(2)— under subparagraph
(A)of such section, with respect to a single license, by not more than $17,500,000; and under subparagraph
(B)of such section, with respect to multiple licenses under common control, by not more than $35,000,000. .
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Sec. 100401
Increasing equity investment by the SBIC program
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