Section 1 Short title
This Act may be cited as the “Investing in America's Small Manufacturers Act”.
Investing in America's Small Manufacturers Act
A BILL
To amend the Small Business Act and the Small Business Investment Act of 1958 to increase the percentage of loans guaranteed for small business concerns that are manufacturers.
Sec. 2 Findings
Congress finds the following:
In 2015, manufacturers contributed over $2,000,000,000,000 to the United States economy and accounted for over 12 percent of United States gross domestic product.
Manufacturing is one of the most important sectors of the United States economy with respect to employment. In 2013, the manufacturing sector supported over 17,000,000 indirect jobs in the United States, in addition to the 12,000,000 individuals who were directly employed in manufacturing. Combined, these indirect and direct manufacturing jobs represented more than 20 percent of United States employment in 2013—more than any other sector.
While the United States has added over 14,000,000 non-farm jobs since 2010, manufacturing job growth has lagged and added only approximately 900,000 jobs. Post-recession job recovery averages since the 1940s indicate that another 1,200,000 manufacturing jobs should have been created during this period.
Small manufacturers are the backbone of the United States manufacturing industry, accounting for nearly half of all manufacturing jobs in the United States. Ensuring that small manufacturers have adequate access to capital is critical to creating manufacturing jobs and the growth of the United States economy.
The 2015 Federal Reserve Small Business Credit Survey indicates that of the 52 percent of manufacturers that applied for financing during the survey period, 65 percent did so to expand their business or to pursue a new business opportunity. The survey also indicates that 42 percent of manufacturers received less financing than they requested, the primary result of which was delayed expansion of their business.
The loan guarantee programs of the Small Business Administration under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.) encourage lenders to provide loans to creditworthy small businesses that would not otherwise obtain financing on reasonable terms and conditions and can serve as an excellent mechanism by which to increase the availability of affordable credit to small manufacturers in the United States.
Sec. 3 Small manufacturers
Loan guarantee percentage— Section 7(a)(2) of the Small Business Act (15 U.S.C. 636(a)(2)) is amended—
in subparagraph (A), in the matter preceding clause (i), by striking “and (E)” and inserting “(E), and (F)”; and
by adding at the end the following:
“(F) Participation for manufacturers
“(i) In general—In an agreement to participate in a loan on a deferred basis under this subsection for a small business concern assigned to a North American Industry Classification System code for manufacturing or that is designated by the Administrator under clause (ii), the participation by the Administration shall be 90 percent.
“(ii) Addition of advanced manufacturing sectors—After submitting notice to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, the Administrator may designate a North American Industry Classification System code for purposes of clause (i) if the Administrator determines the code—
“(I) is not a manufacturing code under the North American Industry Classification System; and
“(II) corresponds to a sector in which manufacturing is a considerable component of the operations of a small business concern, as determined by the Administrator, including advanced manufacturing.”
Guarantee fee reduction— Section 7(a)(18) of the Small Business Act (15 U.S.C. 636(a)(18)) is amended—
in subparagraph (A), by striking “With respect” and inserting “Except as provided in subparagraph (C), with respect”; and
by adding at the end the following:
“(C) Manufacturers
“(i) In general—Subject to clause (ii), with respect to a loan guaranteed under this subsection for a small business concern described in paragraph (2)(F)(i)—
“(I) the Administration may not collect a guarantee fee under this paragraph for a loan of not more than $350,000; and
“(II) for a loan of more than $350,000, the Administration shall collect a guarantee fee under this paragraph equal to 50 percent of the guarantee fee that the Administration would otherwise collect for the loan.
“(ii) Exception—The requirements of clause (i) shall not apply to loans made during a fiscal year if—
“(I) the budget of the President for that fiscal year, submitted to Congress under section 1105(a) of title 31, United States Code, includes a cost for the program established under this subsection that is above zero; and
“(II) the Administrator submits to Congress—
“(aa) notice regarding the determination of cost described in subclause (I); and
“(bb) a detailed discussion indicating why not implementing clause (i) will cause the cost of the program established under this subsection to be not more than zero.”
in section 7(a) (15 U.S.C. 636(a)), by adding at the end the following:
“(35) Assistance for small manufacturers—The Administrator shall ensure that each district office of the Administration provides training to small business concerns described in paragraph (2)(F)(i) in obtaining assistance under this subsection, including with respect to the application process and partnering with participating lenders under this subsection.”
in section 8 (15 U.S.C. 637), by striking subsection (c) and inserting the following:
“(c) Assistance for small manufacturers in SCORE program
“(1) Definition—In this subsection, the term SCORE program means the Service Corps of Retired Executives authorized under subsection (b)(1)(B).
“(2) Volunteers—Under the SCORE program, the Administrator shall recruit volunteers to assist small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), including with respect to the application process and partnering with participating lenders under that section.”
in section 21(c)(3) (15 U.S.C. 648(c)(3))—
in subparagraph (S), by striking “and” at the end;
in subparagraph (T), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(U) providing training to small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), including with respect to the application process and partnering with participating lenders under that section.”
in section 29(b) (15 U.S.C. 656(b))—
in paragraph (2), by striking “and” at the end;
in paragraph (3), by striking the period at the end and inserting “; and”; and
by adding at the end the following:
“(4) training to small business concerns owned and controlled by women that are small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), including with respect to the application process and partnering with participating lenders under that section.”
in section 32 (15 U.S.C. 657b), by adding at the end the following:
“(g) Assistance for small manufacturers—The Associate Administrator shall ensure that Veterans Business Outreach Centers assist small business concerns described in section 7(a)(2)(F)(i) in obtaining assistance under section 7(a) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.), including with respect to the application process and partnering with participating lenders under that section.”
Partnering with NIST— The Small Business Administration and its resource partners may establish partnerships with the Hollings Manufacturing Extension Partnership Program of the National Institute of Standards and Technology and its affiliated centers to facilitate outreach to small manufacturers in providing training and guidance with respect to the application process for loans guaranteed by the Administration.
Sec. 4 Development company debentures
Amount of guaranteed debenture— Section 503(a) of the Small Business Investment Act of 1958 (15 U.S.C. 697(a)) is amended by adding at the end the following:
“(5)
“(A) Any debenture issued by a State or local development company to a small manufacturer (as defined in section 501(e)(6)) with respect to which a guarantee is made under this subsection shall be in an amount equal to not more than 50 percent of the cost of the project with respect to which such debenture is issued.
“(B) Subparagraph (A) shall not apply to debentures issued during a fiscal year if—
“(i) the cost to the Federal Government of making guarantees under this section is above zero; and
“(ii) the Administrator submits to Congress—
“(I) notice regarding the determination of cost described in clause (i); and
“(II) a detailed discussion indicating why not implementing subparagraph (A) will cause the cost to the Federal Government of making guarantees under this section to be not more than zero.”
Startup small manufacturers— Section 502(3)(C)(i) of the Small Business Investment Act of 1958 (15 U.S.C. 696(3)(C)(i)) is amended by inserting “is not a small manufacturer (as defined in section 501(e)(6)) and” after “small business concern”.
Sec. 5 Federal loan guarantees for innovative technologies in manufacturing
Transfer of existing program— The Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3701 et seq.) is amended—
by striking section 26 (15 U.S.C. 3721); and
by redesignating sections 27 and 28 (15 U.S.C. 3722 and 3723) as sections 26 and 27, respectively.
Authority of SBA—
Definitions— In this subsection—
the term Administrator means the Administrator of the Small Business Administration;
the term business loan programs of the Administration means the programs under section 7(a) of the Small Business Act (15 U.S.C. 636(a)) and title V of the Small Business Investment Act of 1958 (15 U.S.C. 695 et seq.); and
the term small manufacturer means a business concern described in section 7(a)(2)(F)(i) of the Small Business Act, as amended by this Act.
Authorization— To the extent the Administrator determines that the assistance available to small manufacturers under section 26 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3721), as in effect on the day before the date of enactment of this Act, is not available under the business loan programs of the Administration, the Administrator shall ensure that the business loan programs of the Administration provide adequate support for innovative technologies in manufacturing.
Reporting— The Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report regarding any determination or activity of the Administrator under paragraph (2).
Savings clause— Any loan guarantee issued under section 26 of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3721), as in effect on the day before the date of enactment of this Act, shall remain in full force and effect under the terms, and for the duration, of the loan guarantee agreement.