prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.



Report 2: Many Members of Congress became actively engaged in foreign policy debates over U S  intervention in the 1992-1995 war in Bosnia and Herzegovina (hereafter, "Bosnia")  Congress monitored and at times challenged the Bush and Clinton Administrations' response to the conflict through numerous hearings, resolutions, and legislative initiatives  Many observers contend that the United States is a stakeholder in Bosnia's future because of the strong impact of U S  intervention on the postwar Bosnian state  Nearly 25 years after warring parties in Bosnia reached the Dayton Agreement (see below), Bosnia faces numerous internal and external challenges, and the country retains geopolitical importance to U S  interests in the Western Balkans  As Congress assesses ongoing and emerging security issues in the region, including resilience against malign external influence, renewed conflict, and radicalization, Bosnia's internal politics and its role in Balkan stability may merit further examination  Bosnia has existed in various forms throughout its history: a medieval kingdom, territory held by two major empires, a federal unit, and, since 1992, an independent state  Bosnia's present international borders are largely consistent with its administrative boundaries under later periods of Ottoman Turkish rule  After World War I, Bosnia became part of the newly created Kingdom of Serbs, Croats, and Slovenes  It was one of the six constituent republics of the Socialist Federal Republic of Yugoslavia from 1945 until 1992  Bosnia's constitution stems from the U S -brokered Dayton Peace Agreement that ended the country's 1992-1995 war  It recognizes three "constituent peoples": Bosniaks, Croats, and Serbs  All three groups are Slavic  Religious tradition is considered a marker of difference among the three ethnic identities: Bosniaks are predominantly Muslim, Serbs are largely Orthodox Christian, and Croats are mostly Catholic  Although Bosnian, Croatian, and Serbian are recognized in Bosnia as distinct official languages, they are mutually intelligible  Bosniaks comprise approximately 50 1% of the population, Bosnian Serbs 30 8%, and Bosnian Croats 15 4%  In this report, Bosnian is used as a non-ethnic term for a person or institution from Bosnia  A Bosnian Serb is an ethnic Serb from Bosnia and a Bosnian Croat is an ethnic Croat from Bosnia  Bosniak refers to Slavic Muslims  Bosnia's religious and cultural diversity is one of its distinctive characteristics  Islam was introduced to part of Bosnia's population during the Ottoman period, although there were also large Catholic, Orthodox Christian, and Jewish communities  Bosnia was the most heterogeneous Yugoslav republic and the only one where no ethnic group formed an absolute majority  During the 1990s, some popular accounts of Bosnia (and the former Yugoslavia) depicted its ethnic relations as "ancient hatreds," implying that the country's ethnic groups cannot peacefully coexist and that the 1992-1995 war was unavoidable  However, many experts on the region reject this thesis  Although Bosnia has experienced episodes of communal violence and bloodshed, most recently during World War II and the 1992-1995 war, its heterogeneous population also has lived in mixed communities for periods of peace  Many experts contend that ethnic conflict often was stoked by domestic leaders who manipulated historical memory and grievances to further their own agendas, or by external powers seeking to rule Bosnia or annex its territory  In the 1980s, Yugoslavia's escalating political and economic crises fueled nationalist movements  Nationalist leaders in Serbia and Croatia appealed to Bosnian Serbs and Croats as ethnic "kin " The party that ruled Croatia for most of the 1990s, the Croatian Democratic Union (HDZ), established a sister party with the same name to mobilize Bosnian Croats and compete in Bosnia's elections  This gave Croatia an avenue of influence in Bosnian politics  Serbia, led by strongman Slobodan Milošević, likewise had influence over Bosnian Serb leaders  In Bosnia's November 1990 elections—the first competitive elections in decades—voters cast aside the ruling League of Communists party and elected ethnic parties that largely continue to dominate today  Bosnian voters backed independence in a 1992 referendum, following in the footsteps of Slovenia, Croatia, and Macedonia  Bosnian Serbs, who did not want to separate from Yugoslavia, boycotted the referendum  Bosnian Serb forces seized more than two-thirds of Bosnia's territory, and a three-year conflict followed that pitted Serb, Croat, and Bosniak forces against one another  Bosnian Serb leaders declared a "Serb Republic" ( Republika Srpska) in March 1992, while Bosnian Croat leaders proclaimed the Croat Community of Herceg-Bosnia in July  Some Bosnian Croat and Bosnian Serb leaders advocated unification with Croatia and Serbia, respectively, where government factions—including their strongman leaders—likewise wanted to carve a Greater Croatia and Greater Serbia out of Bosnia's territory  Bosniak leaders opposed dismemberment of the state  Bosnia's war was one of the most lethal conflicts in Europe since World War II  Bosnian Serb forces besieged Sarajevo for 44 months  More than 10,000 people, mostly civilians, died due to shelling, sniping, and blockade-related deprivation  Paramilitary factions from neighboring Croatia and Serbia—some of which reportedly had ties to the Croatian and Serbian government—fought alongside Bosnian Croats and Serbs  The Serb-dominated Yugoslav National Army also aided Bosnian Serb forces, giving them a military advantage  In many areas, combatants from the three groups killed or expelled members of other ethnic groups to "purify" territory that they wanted to claim as their own  This "ethnic cleansing" changed Bosnia's demographic landscape  An estimated 100,000 or more Bosnians were killed in the conflict, and roughly half of its population displaced  In addition, an estimated 20,000 or more women and girls were victims of sexual violence  Hundreds of Bosnians have been prosecuted for war crimes at the International Criminal Tribunal for the former Yugoslavia (ICTY) and in Bosnian courts  In 2016, the ICTY convicted wartime Bosnian Serb leader Radovan Karadžić of genocide and war crimes  In 2019, the tribunal rejected his appeal and increased his sentence from 40 years to life  Citizens of Croatia and Serbia have also been indicted for crimes committed in the Bosnian war  Highly publicized incidents in 1994 and 1995 underscored the war's human toll  Bosnian Serb forces bombarded a Sarajevo market in 1994 and 1995, resulting in over 100 civilian deaths  In July 1995, Serb forces commanded by Ratko Mladić seized and executed more than 8,000 Bosniak men and boys in a U N -designated safe area around the city of Srebrenica, an incident subsequently seen by some as a consequence of the international community's muddled, ineffectual response to the conflict  The International Court of Justice and ICTY subsequently ruled that the Srebrenica massacres constituted an act of genocide  Mladić was convicted of genocide and other crimes in 2017  These incidents increased pressure on U S  policymakers to take a stronger role in resolving a conflict that had largely been left to the EU and the United Nations  Under U S  command, NATO intervened in August and September 1995 with air strikes against Bosnian Serb targets, while allied Bosniak and Croat forces launched a simultaneous offensive in western Bosnia  The United States played a key role in brokering several agreements  The 1994 Washington Agreement ended the "war within a war" between Bosniaks and Croats  In November 1995, leaders from Croatia, Bosnia, and Serbia met at the Wright-Patterson Air Force base in Dayton, OH, to negotiate a peace agreement  U S  diplomat Richard Holbrooke played a crucial role in brokering the General Framework Agreement for Peace in Bosnia and Herzegovina, more commonly known as the Dayton Peace Agreement  Bosnia's complex political system is a product of the Dayton Agreement; one of its annexes serves as Bosnia's constitution (Annex 4)  Its provisions partly reflect the situation on the ground in 1995, including the subdivision of Bosnia into two ethnoterritorial entities ( Figure 1 ): Republika Srpska ("RS"), which Bosnian Serb leaders had proclaimed in 1992, and the Federation of Bosnia and Herzegovina ("FBiH," predominantly populated by Bosniaks and Croats), which was created by the 1994 Washington Agreement  Entity borders were largely drawn to form ethnic majorities, even though they also reflected territorial seizure and ethnic cleansing  Many Bosniaks view the division of Bosnia into these roughly equal entities as awarding the spoils of war to Bosnian Serbs, whom they regard as the aggressors  Many Bosnian Serbs, however, view the Serb-majority entity as a protection against marginalization  The designation of Bosniaks, Croats, and Serbs as Bosnia's three "constituent peoples" is a cornerstone of the Dayton system  Numerous government bodies have ethnic quotas requiring equal representation of the three groups  In these power-sharing institutions, delegates from each constituent group may veto measures that go against vital ethnic interests  While these arrangements make Bosnia's political system prone to gridlock, Dayton's negotiators viewed them as necessary to prevent any group from feeling marginalized in a context of low trust  Bosnia is a parliamentary republic with a high degree of decentralization  Its complex, tiered structure includes a central ("state-level") government, the two entities, the autonomous Brčko district, and cantonal and municipal governments  The central ("state-level") government covers the entirety of Bosnia  A three-member presidency is the head of state, and includes one Serb member who is elected by RS voters, and one Bosniak and one Croat member elected by FBiH voters  The Council of Ministers, led by a Chairperson, is roughly equivalent to a cabinet government and prime minister in other parliamentary systems  The Parliamentary Assembly is a state-level legislature with two chambers: a directly elected House of Representatives (42 members) and an indirectly elected House of Peoples (5 Serbs, 5 Croats, and 5 Bosniaks)  The state-level government is considered to be weak, despite some expansion of its functions in the 2000s  Its major responsibilities include foreign relations; trade, customs, and monetary policy; migration and asylum policy; defense; and intelligence  Bosnia is further subdivided into two ethnoterritorial entities: Republika Srpska (RS), where Serbs are the largest ethnic group (82%), and the Federation entity (FBiH), where Bosniaks (70%) and Croats (22%) are the largest groups  The two entities have broader policy jurisdiction than the state-level government  Governing functions that are not assigned to the state-level government fall to the entities  These include civilian policing, economic policy, fiscal policy, energy policy, and health and social policy, as well as other issues  Each entity has its own constitution, as well as a president, vice presidents, legislature, and cabinet government with a prime minister  Each entity may establish "special parallel relationships" with neighboring states (i e , Croatia and Serbia)  Numerous entity bodies also incorporate ethnic quotas  Brčko district, a border region in northeastern Bosnia, was initially administered by the international community to allay concerns about RS secession  Brčko's location interrupts RS's contiguity, and both entities initially claimed it  Brčko was later awarded to both entities, but remains a self-governing district whose population is a mix of all three constituent peoples  Some analysts believe it has been relatively more successful than the entities in passing reforms and reintegrating its divided population (e g , ethnically mixed schools with a common curriculum)  FBiH entity is further divided into ten cantons, many of which were drawn to form ethnic Bosniak or Croat majorities  The cantons have jurisdiction in many policy areas, including policing, housing, culture, and education  They also have their own constitutions—based on the FBiH constitution—as well as legislatures and cabinet-style governments  FBiH and RS are further divided into 79 and 64 municipalities, respectively  The Dayton Agreement established a strong oversight role for the international community  The Office of the High Representative (OHR) was created to monitor the implementation of civilian aspects of Dayton  The High Representative is supported by the Peace Implementation Council (PIC), a group of 55 countries and agencies  A 1997 PIC conference empowered the High Representative to impose binding decisions and sanction politicians who obstruct Dayton  Until the mid-2000s, the High Representative used these powers to remove officials deemed to be obstructive to peace and to promote what are considered among the most constructive reforms since Dayton, including merging the entities' armed forces and intelligence services and putting them under new state-level ministries  However, the High Representative's proactive role has since decreased  This is partly due to criticism that the OHR lacks democratic legitimacy and accountability  Bosnian Serb politicians have claimed that the OHR's interventions support Bosniak leaders' preference for a more centralized state  At the same time, some U S  and EU policymakers believed that the attraction of EU membership could incentivize reforms in place of the OHR's more top-down approach  The international community also plays an ongoing security role  NATO led the Implementation Force (IFOR) and the smaller Stabilization Force (SFOR) that monitored security aspects of the Dayton Peace Agreement  The initial deployment of NATO ground forces to Bosnia numbered nearly 60,000, of which the largest share (approximately one-third) was from the United States  The number of troops subsequently decreased  In 2004, NATO's peacekeeping role was transferred to the EU with the understanding that NATO would assist if necessary  The size of the EU operation (EUFOR Althea) decreased from 7,000 troops in 2004 to roughly 600 troops today  Many analysts contend that the Dayton Agreement helped hold Bosnia together after the war; they point to the absence of widespread violence since 1995 as an indicator of its success  However, observers also question whether Bosnia can function much longer under the Dayton system  They identify several key challenges: Critics claim that Bosnia's political system reinforces the country's ethnic divisions and makes ethnicity a core basis of political identity  The ethnic parties that have dominated politics since the war generally appeal to voters from their respective ethnic communities rather than all Bosnians  Critics accuse ethnic party leaders of inflaming nationalist tensions and manipulating historical memory to distract from corruption and win elections, thus aggravating rather than bridging the deep wounds that remain from the war  In some parts of Bosnia, divisions are further reproduced at the societal level through institutions like segregated schools, which separate schoolchildren from different ethnic groups and teach them different curriculum  Some analysts also contend that the system is too gridlock-prone to pass major political and economic reforms to be passed, even with the incentive of potential EU membership  Bosnia's fractured, overlapping institutions sometimes muddle policymaking jurisdiction and impede coordinated response  Furthermore, power-sharing arrangements create numerous veto points in the legislative process  Government coalitions are typically ideologically broad and unwieldy, creating a further source of potential dysfunction  One of the consequences of these barriers is that it is difficult to pass legislation  The previous state-level Parliament, for example, adopted twelve new laws over the course of its 2014-2018 term  Corruption in Bosnia has roots in the country's wartime economy  A 2000 Government Accountability Office (GAO) report stated that "organized crime and corruption pervade Bosnia's national political parties, civil service, law enforcement and judicial systems  [Ethnic] parties control all aspects of the government, the judiciary, and the economy, and in so doing maintain the personal and financial power of their members " Many observers claim that the situation has improved little since then  In 2018, the High Representative warned that the rule of law has deteriorated, while the U S  State Department describes the rule of law as "an existential issue " Bosnia's major parties allegedly siphon from the state apparatus and public enterprises in their strongholds to amass wealth and power  Furthermore, parties in power reportedly politicize hiring in Bosnia's public sector, which employs an estimated third or more of the working population  For many Bosnians, satisfactory employment depends on having the right political connections, which creates a dependence that reportedly is exploited during elections  In 2018, the outgoing U S  ambassador to Bosnia decried the "[Bosnian] politicians who seek to destabilize the country in order to remain in power at all costs for personal profit and protection " Many analysts believe that Bosnia's entrenched ethnic parties benefit tremendously from the status quo and have little incentive to reform the system  Bosnia's MPs are among the best-paid in Europe relative to local incomes, commanding six to eight times the average Bosnian salary  Parties and politicians who gain office in the government or administration often find "a remarkably efficient path to personal enrichment " Politicians are skilled at using veto points to block legislation that threatens their position in Bosnia's patronage system  According to one analyst, Bosnia's patronage system is "the raison d'etre of the political elites and is the main cause of the state's dysfunctionality and resistance to reform " Bosnia's entrenched political class may also fear penalty if serious reforms are enacted and shine the spotlight on malfeasance  Criminal indictments against leaders in neighborhood countries like Romania, Croatia, and North Macedonia highlight this risk  Analysts believe these disincentives make entrenched politicians resistant to external pressure for reform  Several major rounds of U S - and EU-brokered constitutional reform efforts, including in 2006, 2008, and 2009, ultimately failed  Germany and the United Kingdom launched a major initiative in 2014 to shift the focus from difficult constitutional reforms to seemingly more feasible socioeconomic reforms that they hoped would improve Bosnia's economy and dismantle patronage networks  The 2015 "Reform Agenda" identified economic, administrative, and legal measures to be adopted by entity- and state-level governments  The process, which required the major parties to commit in writing to the reform framework, was supported by the EU, the International Monetary Fund, the World Bank Group, and the United States  As an incentive for politicians to agree to the Agenda, the EU offered the entry into force of Bosnia's long-stalled Stabilization and Association Agreement, which marked the first step toward EU membership  However, most observers view the Reform Agenda as largely unsuccessful; many of its provisions failed when entrenched parties objected to measures that would undercut their dominance  While many officials recognize that Bosnia's political system needs reform, there is little consensus on how to change it or to generate the political will to find common ground so long as the dominant parties remain entrenched  Bosnian Serb leaders have expressed a desire to return to the "original" Dayton system, when the entities had greater competencies in security and justice  Milorad Dodik, who has dominated politics in Republika Srpska since the 2000s, has gone further by repeatedly threatening RS secession  Bosnian Croat leaders from the largest Croat party, the Croatian Democratic Union of Bosnia (HDZ-BiH), call for more autonomy for Croats, and have raised the prospect of splitting FBiH to create a third Croat-majority entity  By contrast, Bosniak leaders generally prefer more centralization and the removal of some of the institutional arrangements that they believe contribute to dysfunction and gridlock  Some Bosniak officials also have proposed dismantling the entities or eliminating FBiH's cantons  Survey research documents Bosnian citizens' anger toward the political class and their distrust of political institutions  In a 2018 International Republican Institute survey, 86% of respondents expressed belief that Bosnia is heading in the wrong direction  An estimated 170,000 individuals—disproportionately young and skilled—have emigrated since 2013  Dissatisfaction with education and healthcare, insecurity, and nepotism are cited as key motives to emigrate  Nevertheless, some analysts believe that periods of social discontent in 2014 and 2018, which challenged the system but appeared to transcend ethnic divides, suggest that strengthening Bosnian civil society could increase pressure for reform, and perhaps cultivate a new generation of party leaders  Other observers have put their hopes for reform in Bosnia's so-called "civic parties," which do not have nationalist platforms and typically mobilize voters on the basis of socioeconomic interests rather than ethnicity  While these parties have not matched the results of the ethnic parties, their electoral performance has improved in recent years  Bosnia's challenges came to the forefront during its most recent general election on October 7, 2018 (see Table 1 )  The Central Election Commission (CEC) registered 60 parties and over 3,500 candidates for state-level, entity, and cantonal offices  Observers noted that the campaign climate was more divisive and nationalist in tone than usual  Despite broad voter dissatisfaction, entrenched ethnic parties won the largest vote shares  Almost six months after the election, the parties are still negotiating over government formation at the state level and in FBiH; however, it appears that entrenched ethnic parties will continue to dominate  In March 2019, the leaders of the largest Bosniak, Croat, and Serb parties stated that they had agreed to a set of principles to guide forming the state-level government (the Council of Ministers)  Some observers viewed the improved result of civic parties (one-third of the vote in FBiH) as a positive development  Some of the most controversial outcomes concern the elections to the state-level presidency, composed of three members (one Bosniak, one Croat, and one Serb)  In a closely fought race, Šefik Džaferović, candidate of the ethnic Bosniak SDA party, narrowly defeated the candidate of the civic SDP party (36 6% and 33 5%, respectively), retaining the lock that the SDA has had on the Bosniak seat in most elections since 1996, but perhaps auguring a future victory by a civic party candidate  Prior to the election, some analysts expressed concern at the prospect of two of the three seats on the presidency being held by the nationalist Bosnian Serb leader Milorad Dodik and his ally, the nationalist Bosnian Croat politician Dragan Čović  Both politicians have explicitly or implicitly challenged the legitimacy of Bosnian statehood and called for greater ethnoterritorial autonomy  However, to the surprise of some observers, Željko Komšić of the civic Democratic Front defeated incumbent Čović for the Croat seat with 53% of the vote  Komšić was previously elected as the Croat member of the presidency in 2006 and 2010, and is considered to be a moderate political figure who generally supports centralizing reforms  In contrast to HDZ-BiH leader Čović, he does not have strong ties to the Croatian government  Komšić's election as the Croat member of the presidency in 2006 and 2010 was mired in controversy amid complaints that he only won with the support of Bosniaks who voted in the election for the Croat member on the presidency rather than the Bosniak member  Komšić identifies as Croat but has been leader of several civic parties  He comes from central Bosnia, and not from the Croat-majority western regions that are the stronghold of the HDZ  Although it is not illegal for Bosniaks to vote for the Croat seat on the presidency rather than the Bosniak seat, some Croat leaders (especially HDZ-BiH and HDZ-1990) claim that it violates the spirit of Dayton and results in illegitimate representation of Croats  Similar accusations of ethnic cross-voting surfaced after Komšić's victory in 2018  Some analysts expect Komšić's victory to harden the HDZ-BiH position on electoral reform (see "Legal Challenges," above) and possibly embolden politicians who seek a separate entity  As most pre-election polls anticipated, RS strongman Milorad Dodik defeated the more moderate incumbent Serb member of the presidency with 54% of the vote  Dodik has dominated entity politics in RS since the mid-2000s as entity prime minister and president  Analysts note that RS's political environment grew more closed as Dodik consolidated power  Dodik has run afoul of the United States and the EU by frequently threatening to hold a referendum on RS secession, questioning the legitimacy of Bosnian statehood, and cultivating close ties to Russia (see below)  The U S  Treasury Department sanctioned him in 2017 for actively obstructing Dayton  Many analysts have expressed concern that Dodik will use his new position to obstruct the workings of the central government while continuing to dictate politics in RS through loyal allies  Shortly after the election he vowed to "work above all and only for the interests of Serbs " One of his first acts as head of state was to call for Bosnia to recognize Ukraine's Crimea region as Russian territory  In December 2018, the National Assembly of RS approved the creation of several new ministries, an act that some view as an attempt to wrest competencies from the state-level government  In early 2019, the RS parliament courted controversy when it passed legislation to create a new commission to reinvestigate the events of Srebrenica, which many view as an attempt to deny or downplay the massacres  Since the election, the formation of governments has proceeded piecemeal, and legal challenges to election law in FBiH (see above, "Legal Challenges") initially cast doubt over the formation of that entity's government  The RS National Assembly approved the new entity government in December 2018  Party leaders continue to negotiate over forming governments in FBiH and the state-level Council of Ministers  Because the FBiH government did not fix electoral legislation before the election, the Electoral Commission adopted a decision to assign delegates to the House of Peoples based on the 2013 census  (The Electoral Commission's actions reportedly came amid strong pressure from U S  and EU officials)  Several Bosniak parties challenged the decision before the Constitutional Court; however, the Court declined to take on the case  Bosnia is one of Europe's poorest countries  The 1992-1995 war caused an estimated $110 billion in damage, and Bosnia's economy contracted to one-eighth of its prewar level  Despite significant reconstruction and recovery since 1995, GDP per capita was $5,148 in 2017, well below the EU average ($33,715) and that of Bulgaria ($8,031), its lowest-ranking member  Nearly one in five Bosnians lives below the poverty level  Bosnia's unemployment rate was 18% in 2018, down from 28% in 2015  Youth unemployment also declined in recent years from 60% to 46%  Nevertheless, these rates are still high by European standards  Since 2015, annual GDP growth has averaged around 3%, but it is largely driven by consumption (much of which in turn is fueled by migrant remittances)  The IMF has urged Bosnia to privatize or restructure the nearly 550 state-owned enterprises that comprise roughly 20% of its economy; many of them are unprofitable but allegedly are used by politicians as "cash cows and workplaces for loyal cadres " Bosnia participates in several free trade schemes  In 2006, it joined the Central European Free Trade Agreement (CEFTA) alongside other non-EU countries in the region, including other ex-Yugoslav neighbors  Bosnia's Stabilization and Association Agreement (SAA) with the European Union, which entered into force in 2015, provides for almost fully free trade  A free trade agreement with the European Free Trade Association (EFTA) also entered into force in 2015  The EU is Bosnia's primary trade partner  Germany, Italy, Croatia, Slovenia, and Austria are Bosnia's key EU export markets, accounting for more than half of its exports in 2017
Report 2: gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff who made key contributions to this report are listed in appendix III  In this report, we provide information about (1) companies’ disclosures filed with the U S  Securities and Exchange Commission (SEC) in 2017 compared with disclosures filed in the prior 2 years and (2) the rate of sexual violence in the eastern Democratic Republic of the Congo and neighboring countries published in 2017 and early 2018  To examine the fourth annual company disclosures filed with the SEC in 2017 in response to the SEC disclosure rule, we downloaded the specialized disclosure reports (Form SD) and conflict minerals reports (CMR) from SEC’s publically available Electronic Data Gathering, Analysis, and Retrieval (EDGAR) database in September 2017  We downloaded 1,165 filings identified as Form SDs and the CMRs included in EDGAR  To review the completeness and accuracy of the EDGAR database, we reviewed relevant documentation, interviewed knowledgeable SEC officials, and reviewed prior GAO reports on internal controls related to SEC’s financial systems  We determined that the EDGAR database was sufficiently reliable for identifying the universe of SD filings  We reviewed the conflict minerals section of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) and the requirements of the SEC disclosure rule to develop a data collection instrument (DCI) that guided our analysis of Form SDs and CMRs that contain the information disclosed by the filing companies  Our DCI was not a compliance review of the Form SDs and CMRs  The questions were written in both yes-no and multiple-choice formats  An analyst reviewed the Form SDs and CMRs and recorded responses to the DCI for all of the companies in the sample  A second analyst also reviewed the Form SDs and CMRs and verified the responses recorded by the first analyst  Analysts met to discuss and resolve any discrepancies  We randomly sampled 100 Form SDs from a population of 1,165 to create estimates generalizable to the population of all companies that filed  All estimates based on our sample have a margin of error of plus or minus 10 percentage points or less at the 95-percent confidence level  Because we followed a probability procedure based on random selections, our sample is only one of a large number of samples that we might have drawn  Since each sample could have provided different estimates, we express our confidence in the precision of our particular sample’s results as a 95-percent confidence interval  This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn  We also attended an industry conference on conflict minerals and spoke with company representatives to provide additional perspective  To address our second objective, we identified and assessed any information on sexual violence in the eastern DRC and the three adjoining countries—Rwanda, Uganda, and Burundi—that had been published or otherwise had become available in 2017 and early 2018  We discussed the collection of sexual violence–related data in the DRC and adjoining countries, including population-based survey data and case-file data, during interviews with U S  Department of State and U S  Agency for International Development officials and with representatives of nongovernmental organizations and researchers whom we interviewed for our prior review of sexual violence rates in the eastern DRC and adjoining countries  We also interviewed officials from the United Nations Population Fund and the United Nations Special Representative of the Secretary-General in New York on Sexual Violence in Conflict  In addition, we conducted Internet searches to identify new academic articles containing any additional information on sexual violence published in 2017 and early 2018  We conducted this performance audit from September 2017 to June 2018 in accordance with generally accepted government auditing standards  Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives  We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives  The U S  Securities and Exchange Commission (SEC) conflict minerals disclosure rule requires certain companies to file a specialized disclosure report, known as the Form SD, if the company manufactures, or contracts to have manufactured, a product or products containing conflict minerals that are necessary to the functionality or the production of those products  The rule also requires each company, as applicable, to provide a description of the measures the company took to exercise due diligence in determining the source and chain of custody of the conflict minerals, the facilities used to process them, their country of origin, and the efforts made to determine the mine or location of origin with the greatest possible specificity  Form SD provides general instructions for filing conflict minerals disclosures and specifies the information that companies must provide  Companies were required to file under the rule for the first time by June 2, 2014, and annually thereafter on May 31  Figure 4 shows the SEC’s flowchart summarizing the conflict minerals disclosure rule  In addition to the individual named above, Godwin Agbara (Assistant Director), Farahnaaz Khakoo-Mausel (Analyst-in-Charge), Diana Blumenfeld, Andrew Kurtzman, Justin Fisher, Grace Lui, David Dayton, Christopher Keblitis, and Michael McAtee made key contributions to this report  Conflict Minerals: Information on Artisanal Mined Gold and Efforts to Encourage Responsible Sourcing in the Democratic Republic of the Congo  GAO-17-733  Washington, D C : August 23, 2017  SEC Conflict Minerals Rule: 2017 Review of Company Disclosures in Response to the U S  Securities and Exchange Commission Rule  GAO-17-517R  Washington, D C : April 26, 2017  Conflict Minerals: Insights from Company Disclosures and Agency Actions  GAO-17-544T  Washington, D C : April 5, 2017  SEC Conflict Minerals Rule: Companies Face Continuing Challenges in Determining Whether Their Conflict Minerals Benefit Armed Groups  GAO-16-805  Washington, D C : August 25, 2016  SEC Conflict Minerals Rule: Insights from Companies’ Initial Disclosures and State and USAID Actions in the Democratic Republic of the Congo Region  GAO-16-200T  Washington, D C : November 17, 2015  SEC Conflict Minerals Rule: Initial Disclosures Indicate Most Companies Were Unable to Determine the Source of Their Conflict Minerals  GAO-15-561  Washington, D C : August 18, 2015  Conflict Minerals: Stakeholder Options for Responsible Sourcing Are Expanding, but More Information on Smelters Is Needed  GAO-14-575  Washington, D C : June 26, 2014  SEC Conflict Minerals Rule: Information on Responsible Sourcing and Companies Affected  GAO-13-689  Washington D C : July 18, 2013  Conflict Minerals Disclosure Rule: SEC’s Actions and Stakeholder- Developed Initiatives  GAO-12-763  Washington, D C : July 16, 2012  The Democratic Republic of Congo: Information on the Rate of Sexual Violence in War-Torn Eastern DRC and Adjoining Countries  GAO-11-702  Washington, D C : July 13, 2011  The Democratic Republic of the Congo: U S  Agencies Should Take Further Actions to Contribute to the Effective Regulation and Control of the Minerals Trade in Eastern Democratic Republic of the Congo  GAO-10-1030  Washington, D C : September 30, 2010 

ground_truth: Congressional interest in small business access to capital has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to start, continue, or expand operations and create jobs. Some have argued that the federal government should provide additional resources to assist small businesses. Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit. They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs. Several laws were enacted during the 111th Congress to enhance small business access to capital. For example, P.L. 111-5, the American Recovery and Reinvestment Act of 2009 (ARRA), provided the Small Business Administration (SBA) an additional $730 million, including funding to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program's maximum loan guaranty percentage to 90%. P.L. 111-240, the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF), in which $4.0 billion was issued, to encourage community banks with less than $10 billion in assets to increase their lending to small businesses. It also authorized a $1.5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, numerous changes to the SBA's loan guaranty and contracting programs, funding to continue the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses. P.L. 111-322, the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011. This report focuses on the SBLF. It opens with a discussion of the supply and demand for small business loans. The SBLF's advocates claimed the SBLF was needed to enhance the supply of small business loans. The report then examines other arguments presented both for and against the program. Advocates argued that the SBLF would increase lending to small businesses and, in turn, create jobs. Opponents contended that the SBLF could lose money, lacked sufficient oversight provisions, did not require lenders to increase their lending to small businesses, could serve as a vehicle for Troubled Asset Relief Program (TARP) recipients to effectively refinance their TARP loans on more favorable terms with little or no resulting benefit for small businesses, and could encourage a failing lender to make even riskier loans to avoid higher dividend payments. The report concludes with an examination of the program's implementation and a discussion of bills introduced to amend the SBLF. For example, during the 112th Congress, S. 681, the Greater Accountability in the Lending Fund Act of 2011, would have limited the program's authority to 15 years from enactment and prohibited TARP recipients from participating in the program. H.R. 2807, the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund "to increase the availability of credit for small businesses." H.R. 3147, the Small Business Lending Extension Act, would have extended the Department of the Treasury's investment authority from one year to two years. During the 113th Congress, H.R. 2474, the Community Lending and Small Business Jobs Act of 2013, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: Congressional interest in small business access to capital has increased in recent years because of concerns that small businesses might be prevented from accessing sufficient capital to enable them to start, continue, or expand operations and create jobs  Small businesses have played an important role in net job growth during previous economic recoveries, particularly in the construction, housing, and retail sectors  For example, after the eight-month recession that began in July 1990 and ended in March 1991, small businesses (defined for this purpose as having fewer than 500 employees) increased their net employment in the first year after the recession, whereas larger businesses continued to experience declines in employment  During the most recent recession (December 2007-June 2009), small businesses accounted for almost 60% of net job losses  From the end of the recession through the end of FY2012, small businesses accounted for about 63% of net new jobs, close to their historical average share of net new job creation  Since then, small businesses have added about 65% of net new jobs  Some have argued that the federal government should provide additional resources to assist small businesses  Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit  They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs  Several laws were enacted during the 111 th Congress to enhance small business access to capital  For example, P L  111-5 , the American Recovery and Reinvestment Act of 2009 (ARRA), provided the Small Business Administration (SBA) an additional $730 million, including $375 million to temporarily subsidize SBA fees and increase the 7(a) loan guaranty program's maximum loan guaranty percentage from 85% on loans of $150,000 or less and 75% on loans exceeding $150,000 to 90% for all regular 7(a) loans  P L  111-240 , the Small Business Jobs Act of 2010, authorized the Secretary of the Treasury to establish a $30 billion Small Business Lending Fund (SBLF) ($4 0 billion was issued) to encourage community banks with less than $10 billion in assets to increase their lending to small businesses  It also authorized a $1 5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs, numerous changes to the SBA's loan guaranty and contracting programs, funding to continue the SBA's fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through December 31, 2010, and about $12 billion in tax relief for small businesses  P L  111-322 , the Continuing Appropriations and Surface Transportation Extensions Act, 2011, authorized the SBA to continue its fee subsidies and the 7(a) program's 90% maximum loan guaranty percentage through March 4, 2011, or until available funding was exhausted, which occurred on January 3, 2011  According to the SBA, the temporary fee subsidies and 90% maximum loan guaranty for the 7(a) program "engineered a significant turnaround in SBA lending     The end result is that the agency helped put more than $42 billion in the hands of small businesses through the Recovery Act and Jobs Act combined " This report focuses on the SBLF  It begins with a discussion of the supply and demand for small business loans  The SBLF's advocates argued that the fund was an important part of a larger effort to enhance the supply of small business loans  After describing the program's structure, the report then examines other arguments that were presented both for and against the program's enactment  Advocates claimed the SBLF would increase lending to small businesses and, in turn, create jobs  Opponents contended that the SBLF could lose money, lacked sufficient oversight provisions, did not require lenders to increase their lending to small businesses, could serve as a vehicle for the Troubled Asset Relief Program (TARP) recipients to effectively refinance their TARP loans on more favorable terms with little or no resulting benefit for small businesses, and could encourage a failing lender to make even riskier loans to avoid higher dividend payments  The report concludes with an examination of the SBLF's implementation by the Department of the Treasury and a discussion of bills introduced during recent Congresses to amend the SBLF  For example, during the 112 th Congress, S  681 , the Greater Accountability in the Lending Fund Act of 2011, would have, among other provisions, limited the program's authority to 15 years from enactment and prohibited TARP recipients from participating in the program  H R  2807 , the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF when its investment authority expired on September 27, 2011, to the Community Development Financial Institutions Fund "to continue the program of making capital investments in eligible community development financial institutions in order to increase the availability of credit for small businesses " H R  3147 , the Small Business Lending Extension Act, would have, among other provisions, extended the Department of the Treasury's investment authority from one year following the date of enactment to two years  During the 113 th Congress, H R  2474 , the Community Lending and Small Business Jobs Act of 2013, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund  Each quarter, the Federal Reserve Board surveys senior loan officers concerning their bank's lending practices  The survey includes questions about both the supply and demand for small business loans  For example, the survey includes a question concerning their bank's credit standards for small business loans: "Over the past three months, how have your bank's credit standards for approving applications for C&I [commercial and industrial] loans or credit lines—other than those to be used to finance mergers and acquisitions—for small firms (defined as having annual sales of less than $50 million) changed?" The senior loan officers are asked to indicate if their bank's credit standards have "Tightened considerably," "Tightened somewhat," "Remained basically unchanged," "Eased somewhat," or "Eased considerably " Subtracting the percentage of respondents reporting "Eased somewhat" and "Eased considerably" from the percentage of respondents reporting "Tightened considerably" and "Tightened somewhat" provides an indication of the market's supply of small business loans  As shown in Figure 1 , senior loan officers reported that they generally tightened small business loan credit standards from 2007 through late 2009  Since 2009, small business credit markets have generally improved, with some tightening in 2016 and the end of 2018  The survey also includes a question concerning the demand for small business loans: "Apart from normal seasonal variation, how has demand for C&I loans changed over the past three months for small firms (annual sales of less than $50 million)?" Senior loan officers are asked to indicate if demand was "Substantially stronger," "Moderately stronger," "About the same," "Moderately weaker," or "Substantially weaker " Subtracting the percentage of respondents reporting "Moderately weaker" and "Substantially weaker" from the percentage of respondents reporting "Substantially stronger" and "Moderately stronger" provides an indication of the market's demand for small business loans  As shown in Figure 1 , senior loan officers reported that the demand for small business loans declined somewhat in 2007 and 2008, and declined significantly in 2009  Demand then leveled off (at a relatively reduced level) during 2010, increased somewhat during the first half of 2011, declined during the latter half of 2011, generally increased from 2012 through 2015, and has varied somewhat, increasing in some quarters and declining in others, since then  The Federal Deposit Insurance Corporation (FDIC) has maintained comparable small business lending data for the second quarter (June 30) of each year since 2002  Figure 2 shows the amount of outstanding small business loans (defined by the FDIC as commercial and industrial loans of $1 million or less) for nonagricultural purposes as of June 30 of each year from 2006 to 2018  As shown in Figure 2 , the amount of outstanding small business loans for nonagricultural purposes increased at a relatively steady pace from June 30, 2006, to June 30, 2008, declined over the next several years, and has increased each year since June 30, 2013  Although changes in small business outstanding debt are not necessarily a result of changes in the supply of small business loans, many, including the SBA, view a decline in small business outstanding debt as a signal that small businesses might be experiencing difficulty accessing sufficient capital to enable them to lead job growth  According to an SBA-sponsored study of small business lending, several factors contributed to the decline in small business lending from 2007 to 2010  The report's authors noted that the 30% decline in home prices from their peak in 2006 to 2010 diminished the value of collateral for many small business borrowers, some of whom had relied on home equity loans to finance their small businesses during the real estate boom  The authors concluded that the absence of this additional source of collateral may have contributed to a decline in lending to small businesses  They also argued that many small businesses found it increasingly difficult to renew existing lines of credit as lenders became more cautious as a result of slow economic growth and an increasing risk of loan defaults, especially among small business start-ups, which are generally considered among the most risky investments  The authors argued that in this newly regulated market, smaller lenders are likely to be less profitable because they have fewer sales of products and services to spread out over the higher auditing and FDIC costs  Hence, they have less money to lend to small businesses and others; and the relative difficulty in assessing creditworthiness due to the lack of information about potential financial performance is very high in small business lending, especially in financial markets driven by factor—rather than relationship—lending  Therefore, one would expect the small business loan market to recover more slowly than other financial markets  The authors also noted that FDIC data indicated that small business lending had not only declined in absolute terms (the total amount of dollars borrowed and the total number of small business loans issued), but in relative terms as well (the market share of business loans): Over the eight years from 2003 through 2010, small business loans as a share of total business loans declined by more than 12 percentage points, from 81 7% in 2003 to 68 9% in 2010  Perhaps of most concern is the further decline in the ratios of small business loans to total assets and small business loans to total business loans  Small business loans constituted about 16 8% of total assets in 2005, but only 15 3% in 2010; hence, small business lending is becoming less significant for these lenders  Small business lending is also losing market share in the business loan market  In the eight-year period from 2003 to 2010, small business loans as a share of total business loans declined more than 10 percentage points from 81 7% in 2003 to 68 9% in 2010  According to the previously mentioned SBA-sponsored study of small business lending, the demand for small business loans fell during the recession primarily because many small businesses experienced a decline in sales and many small business owners had a heightened level of uncertainty concerning future sales  The study's authors argued that given small business owners' lack of confidence in the demand for their goods and services, many small business owners decided to save capital instead of hiring additional employees and borrowing capital to invest in business expansions and inventory  The responses of small business owners to a monthly survey by the National Federation of Independent Business Research Foundation (NFIB) concerning small business owners' views of the economy support the argument that declining sales contributed to the reduced demand for small business loans  From 2008 through 2011, small business owners responding to the NFIB surveys identified poor sales as their number-one problem  Prior to 2008, taxes had been reported as their number-one problem in nearly every survey since the monthly surveys began in 1986  Also, employment data suggest that small businesses were particularly hard hit by the recession  As mentioned previously, small businesses accounted for almost 60% of the net job losses during the December 2007-June 2009 recession  According to testimony by the Secretary of the Treasury before the House Small Business Committee on June 22, 2011, small businesses were especially hard hit by the recession because [s]mall businesses are concentrated in sectors that were especially hard hit by the recession and the bursting of the housing bubble: construction and real estate  More than one-third of all construction workers are employed by firms with less than 20 workers, and an additional third are employed by businesses with fewer than 100 employees  Just over half of those employed in the real estate, rental, and leasing sectors work for businesses with less than 100 workers on their payrolls  More broadly, the rate of job losses was almost twice as high in small businesses as it was in larger firms during the depths of the crisis  During the 111 th Congress, legislation designed to increase both the supply and demand for small business loans was adopted  For example, Congress provided more than $1 1 billion to temporarily subsidize fees for the SBA's 7(a) and 504/Certified Development Company (504/CDC) loan guaranty programs and to increase the 7(a) program's maximum loan guaranty percentage from 85% on loans of $150,000 or less and 75% on loans exceeding $150,000 to 90% for all regular 7(a) loans (funding was exhausted on January 3, 2011)  The fee subsidies were designed to increase the demand for small business loans by reducing the cost of borrowing  The 90% loan guarantee was designed to increase the supply of small business loans by reducing the risk of lending  Congress also provided the SBA additional resources to expand its lending to small businesses  For example, ARRA included a $255 million temporary, two-year small business stabilization program to guarantee loans of $35,000 or less to small businesses for qualified debt consolidation, later named the America's Recovery Capital (ARC) Loan program (the program ceased issuing new loan guarantees on September 30, 2010); an additional $15 million for the SBA's surety bond program and a temporary increase in that program's maximum bond amount from $2 million to $5 million and up to $10 million under certain conditions (the higher maximum bond amounts ended on September 30, 2010); an additional $6 million for the SBA's Microloan program's lending program and an additional $24 million for the Microloan program's technical assistance program; and increased the funds ( leverage ) available to SBA-licensed Small Business Investment Companies (SBICs) to no more than 300% of the company's private capital or $150 million, whichever is less  Several other programs were also enacted during the 111 th Congress to increase the supply of small business loans  For example, ARRA authorized the SBA to establish a temporary secondary market guarantee authority to provide a federal guarantee for pools of first lien 504/CDC program loans that are to be sold to third-party investors  ARRA also authorized the SBA to make below-market interest rate direct loans to SBA-designated "Systemically Important Secondary Market (SISM) Broker-Dealers" that would use the loan funds to purchase SBA-guaranteed loans from commercial lenders, assemble them into pools, and sell them to investors in the secondary loan market  P L  111-240 extended the SBA's secondary market guarantee authority from two years after the date of ARRA's enactment to two years after the date of the program's first sale of a pool of first lien position 504/CDC loans to a third-party investor (which took place on September 24, 2010)  The act also increased the loan guarantee limits for the SBA's 7(a) program from $2 million to $5 million, and for the 504/CDC program from $1 5 million to $5 million for "regular" borrowers, from $2 million to $5 million if the loan proceeds are directed toward one or more specified public policy goals, and from $4 million to $5 5 million for manufacturers  It also increased the SBA's Microloan program's loan limit for borrowers from $35,000 to $50,000 and for microlender intermediaries after their first year in the program from $3 5 million to $5 million  In addition, it temporarily increased for one year (through September 26, 2011) the SBA 7(a) Express Program's loan limit from $350,000 to $1 million  The act also authorized the Secretary of the Treasury to establish the $30 billion SBLF and a $1 5 billion State Small Business Credit Initiative to provide funding to participating states with small business capital access programs  The SBLF was designed "to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses " The SBLF's legislative history, including differences in the House- and Senate-passed versions of the program, appears in the Appendix   P L  111-240 authorized the Secretary of the Treasury to make up to $30 billion in capital investments in eligible institutions with total assets equal to or less than $1 billion or $10 billion (as of the end of the fourth quarter of calendar year 2009)  The authority to make capital investments in eligible institutions was limited to one year after enactment  Eligible financial institutions with total assets equal to or less than $1 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the SBLF in an amount not exceeding 5% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 7,340 FDIC-insured lending institutions reported having assets amounting to less than $1 billion  Eligible financial institutions with total assets of $10 billion or less as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the fund in an amount not exceeding 3% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 565 FDIC-insured lending institutions reported having assets of $1 billion to $10 billion  Risk-weighted assets are assets such as cash, loans, investments, and other financial institution assets that have different risks associated with them  FDIC regulations (12 C F R  §567 6) establish that cash and government bonds have a 0% risk-weighting; residential mortgage loans have a 50% risk-weighting; and other types of assets (such as small business loans) have a higher risk-weighting  Lending institutions on the FDIC problem bank list or institutions that have been removed from the FDIC problem bank list for less than 90 days are ineligible to participate in the program  A lending institution can refinance securities issued through the Treasury Capital Purchase Program (CPP) and the Community Development Capital Incentive (CDCI) program under TARP, but only if that institution had not missed more than one dividend payment due under those programs  Participating banks (C corporations and savings associations) are charged a dividend rate of no more than 5% per annum initially, with reduced rates available if the bank increases its small business lending by specified amounts  For example, during any calendar quarter in the initial two years of the capital investments under the program, the bank's dividend rate is lowered if it increases its small business lending, as reported in its FDIC call reports, compared with the average small business lending it made in the four previous quarters immediately preceding the law's enactment, minus some allowable adjustments  Table 1 shows the dividend rates associated with small business lending increases by C corporation banks and savings associations  Table 2 shows the dividend rates associated with small business lending increases by participating S corporation banks and mutual lending institutions  These rates are slightly higher than those for C corporation banks and savings associations "to reflect after-tax effective rates equivalent to the dividend rate paid by other classes of institutions participating in the Fund through the issuance of preferred stock " As will be discussed later, an S corporation does not pay federal taxes at the corporate level  Any business income or loss is "passed through" to shareholders who report it on their personal income tax returns  Community Development Financial Institutions (CFDIs) are provided funding for an initial eight years with an automatic rollover for two additional years at the issuer's option  On the 10 th anniversary of the investment date the issuer repays the principal amount, together with all accrued and unpaid interest  Additionally, the dividend rate is 2% per annum for the first eight years from the investment date (payable quarterly in arrears on January 1, April 1, July 1, and October 1 of each year) and 9% thereafter  SBLF applicants are required to submit a small business lending plan to the appropriate federal banking agency and, for applicants that are state-chartered banks, to the appropriate state banking regulator  The plan must describe how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate  The plan is treated as confidential supervisory information  The Secretary of the Treasury is required to consult with the appropriate federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, before determining if the eligible institution may participate in the program  The act directed that all funds received by the Secretary of the Treasury in connection with purchases made by the SBLF, "including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt " The SBLF's advocates argued that it would create jobs by encouraging lenders, especially those experiencing liquidity problems (access to cash and easily tradable assets), to increase their lending to small businesses  For example, the House report accompanying H R  5297 , the Small Business Lending Fund Act of 2010, argued that the SBLF was needed to enhance small business's access to capital, which, in turn, was necessary to enable those businesses to create jobs and assist in the economic recovery: There has been a dramatic decrease in the amount of bank lending in the past several quarters  On May 20, 2010, the Federal Deposit Insurance Corporation (FDIC) released its Quarterly Banking Profile for the first quarter of 2010  The report shows that commercial and industrial loans declined for the seventh straight quarter, down more than 17% from the year before  Many companies, particularly small businesses, claim that it is becoming harder to get new loans to keep their business operating and that banks are tightening requirements or cutting off existing lines of credit even when the businesses are up to date on their loan repayments  Treasury Secretary Timothy F  Geithner recently acknowledged the problem encountered by some banks, both healthy and troubled, which have been told to maintain capital levels in excess of those required to be considered well capitalized  Some banks say they have little choice but to scale back lending, even to creditworthy borrowers, and the most recent Federal Reserve data shows banks are continuing to tighten lending terms for small businesses  A dissenting view, endorsed by the House Committee on Financial Services' minority members, was included in the report  This view argued that the SBLF does not properly deal with the lack of financing for small businesses: Instead of addressing the problem by stimulating demand for credit by small businesses, H R  5297 injects capital into banks with no guarantees that they will actually lend  The bill allows a qualifying bank to obtain a capital infusion from the government without even requiring the bank to make a loan for two years  In fact, if a bank reduces or fails to increase lending to small business during those first two years, it would not face any penalty  It defies logic that the Majority would support a bill to increase lending that does not actually require increased lending  A more effective response to the challenges facing America's small businesses was offered by Representatives Biggert, Paulsen, Castle, Gerlach, and King, whose amendment would have extended a series of small business tax credits before implementing the Small Business Lending Fund  Advocates also argued that even if the SBLF were authorized "the program probably would not be fully operational for months; banks could shun the program for fear of being stigmatized by its association with TARP; and many banks would avoid taking on new liabilities when their existing assets are troubled " They contended that the bill did not provide sufficient oversight for effectively monitoring the program because the Inspector General of the Department of the Treasury, who was given that oversight responsibility under the bill, "might not be able to direct sufficient attention to this task given its other responsibilities " They argued that the Special Inspector General of TARP would be in a better position to provide effective oversight of the program  These, and other, arguments were presented during House floor debate on the bill  For example, Representative Melissa Bean advocated the bill's passage, arguing that the SBLF builds on the effective financial stabilization measures Congress has previously taken by establishing a new $30 billion small business loan fund to provide additional capital to community banks that increase lending to small businesses  This $30 billion investment on which the government will be collecting dividends and earning a profit per the CBO [Congressional Budget Office] estimates can be leveraged by banks into over $300 billion in new small business loans  This is an important investment by the Federal Government in our small business that brings tremendous returns  The terms of the capital provided to banks are performance based; the more a bank increases its small business lending, the lower the dividend rate is for the SBLF capital  If a bank decreases its small business lending, it will be penalized with higher dividend rates  This legislation includes strong safeguards to ensure that banks adequately utilize available funds to increase lending to small businesses, not for other lending or to improve their balance sheet  There will be oversight consistently throughout the program, plus it requires that the capital be invested only in strong financial institutions at little risk of default and the best positioned to increase small business lending  It's important for Americans to understand that although this fund has a maximum value of $30 billion, it is estimated to make a profit for taxpayers in the long run  And the money will ultimately go not to banks, but to the small businesses and their communities that they lend to  As our financial system stabilizes and our community banks recapitalize, these funds will be repaid to Treasury with full repayment required over the next 10 years  Representative Nydia Velázquez, then-chair of the House Committee on Small Business, added that the legislation had sufficient safeguards in place to ensure that the funds were targeted at small businesses: First, banks must apply to the Treasury to receive funds, with a detailed plan on how to increase small business lending at their institution  This language was included at my insistence that we need to make sure that small businesses will get the benefit of this legislation  Second, this capital, repayment of the government loans will be at a dividend rate starting at 5% per year  This rate will be lowered by 1% for every 2 5% increase in small business lending over 2009 levels  It can go as low as a total dividend rate of just 1% if the bank increases its business lending by 10% or more, incentivizing banks to do the right thing  To ensure that banks actually use the funding they receive, the rate will increase—and there are penalties—to 7% if the bank fails to increase its small business lending at their institution within 2 years  To ensure that all federal funds are paid back within 5 years, the dividend rate will increase to 9% for all banks, irrespective of their small business lending, after 4 1/2 years  Representative Velázquez added "let me just make it clear … CBO estimates that [the SBLF] will save taxpayers $1 billion over 10 years, as banks are expected to pay back this loan over 10 years, with interest " Representative Randy Neugebauer opposed the bill's adoption, arguing that the majority is repeating the same failed initiatives that have helped our national debt grow to $13 trillion in the past 2 years  This bill follows the model of the TARP program, minus [TARP's] stronger oversight, and it puts another $30 billion into banks in the hopes that lending to small businesses will increase  In the words of Neil Barofsky, the Special Inspector General who oversees the TARP, "In terms of its basic design," he says, "its participants, its application process, from an oversight perspective, the Small Business Lending Fund would essentially be an extension of the TARP's Capital Purchase Program " From the Congressional Oversight Panel for TARP, chaired by Elizabeth Warren, she says, "The SBLF's prospects are far from certain  The SBLF also raises questions about whether, in light of the Capital Purchase Program's poor performance in improving credit access, any capital infusion program can successfully jump-start small business lending " This bill allows for another $33 billion in spending that will be added to the government's credit card  The CBO tells us that the bank lending portion will ultimately cost taxpayers $3 4 billion when market risk is taken into account  The House passed H R  5297 by a vote of 241-182, on June 17, 2010  The arguments presented during House floor debate on H R  5297 were also presented during Senate consideration of the bill  Advocates argued that the SBLF would encourage higher levels of small business lending and jobs  For example, Senator Mary Landrieu argued on July 21, 2010, that the SBLF should be adopted because it "is not a government program for banks  It is a public-private partnership lending strategy for small business " She added that as chair of the Senate Committee on Small Business and Entrepreneurship, she talked with her colleagues, including the SBLF's opponents, and revised the program to address their concerns  She also argued that the SBLF has hundreds of endorsements from independent banks, the community banks and almost every small business association in America … makes $1 billion [according to the CBO score] … is not direct lending from the federal government  It is not creating a new bureaucracy … [It is] voluntary … there are no onerous restrictions … The small business gets the loans  We create jobs  People are employed  The recession starts ending…  It has nothing to do with TARP money  It is not a TARP program  It is not a bank program  It doesn't have anything to do with banks except that we are working in partnership with banks to lend money to small businesses which are desperate for money  Opponents argued that the SBLF could lose money, lacked sufficient oversight provisions, did not require lenders to increase their lending to small businesses, could serve as a vehicle for TARP recipients to effectively refinance their TARP loans on more favorable terms with little or no resulting benefit for small businesses, and could encourage a failing lender to make even riskier loans to avoid higher dividend payments  In addition, there were disagreements over the number of amendments that could be offered by the minority, which led several Senators to oppose further consideration of the bill until that issue was resolved to their satisfaction  For example, on July 22, 2010, Senator Olympia Snowe argued that although "under a cash-based estimate, CBO listed the official score for the lending fund as raising $1 1 billion over 10 years," SBLF proponents "fail to mention" that when CBO scored the SBLF using an alternative methodology that adjusts for market risk, it estimated that the SBLF could cost $6 2 billion  Senator Snowe also argued that the bipartisan Congressional Oversight Panel for TARP stated in its May 2010 oversight report that the proposed SBLF "substantially resembles" the TARP and "is a bank-focused capital infusion program that is being contemplated despite little, if any, evidence that such programs increase lending " Senator Snowe noted that she regretted "that we are in a position where we have not been able to reach agreement allowing the minority to offer amendments, which is confounding and perplexing as well as disappointing " Senator Snowe later added that the SBLF's incentives to encourage lending to small businesses also "could encourage unnecessarily risky behavior by banks … to avoid paying higher interest rates " Opponents also questioned the SBLF's use of quarterly call report data as submitted by lenders to their appropriate banking regulator to determine what counts as a small business loan  Call report data denotes loans of $1 million or less as small business loans, regardless of the size of the business receiving the loan  As a result, the SBLF's opponents argued that "the data used to measure small business lending in the SBLF covers an entirely different set of small businesses than those that fall within the definition set out in the Small Business Act or used by the SBA " The Senate's version of H R  5297 was agreed to on September 16, 2010, by a vote of 68-38  The House agreed to the Senate-passed version of H R  5297 on September 23, 2010, by a vote of 237-187, and the bill, retitled the Small Business Jobs Act of 2010, was signed into law by President Obama on September 27, 2010  On February 14, 2011, the Obama Administration issued its budget recommendation for FY2012  The budget anticipated that the SBLF would provide $17 399 billion in financings, well below its authorized amount of $30 billion  This was the first indication that the SBLF's implementation may not proceed as expected  The second indication that the program's implementation may not proceed as expected was an unanticipated delay in the writing of the program's regulations  The U S  Treasury was criticized by some for not implementing the program quickly enough  The first financing took place on June 21, 2011, about nine months after the program's enactment  The delay was largely due to the Treasury's need to finalize the SBLF's investment decision process with federal banking agencies and the need to create separate SBLF regulations for financial institutions established as C corporations, Subchapter S corporations, mutual lending institutions, and Community Development Financial Institutions (CDFIs)  A C corporation is a legal entity established under state law and includes shareholders, directors, and officers  The profit of a C corporation is taxed to the corporation when earned and then is taxed to the shareholders when distributed as dividends  The majority of insured depository institutions, bank holding companies, and savings and loan holding companies are C corporations  A Subchapter S c orporation refers to a section of the Internal Revenue Code (IRC) that allows a corporation to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes  Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates  This allows S corporations to avoid double taxation on the corporate income  Mutual lending institutions , which include many thrifts, are owned by their depositors or policyholders  They have no stockholders  CDFIs are financial entities certified by the CDFI Fund in the U S  Department of the Treasury and provide capital and financial services to underserved communities  The establishment of separate regulations for each of these different types of financial institutions was largely related to issues involving whether the SBLF's financings would be counted by banking regulatory agencies as Tier 1 capital (core capital that is relatively liquid, such as common shareholders' equity, disclosed reserves, most retained earnings, and perpetual noncumulative preferred stocks) or as Tier 2 capital (supplementary capital that consists mainly of undisclosed reserves, revaluation reserves, general provisions, hybrid instruments, and subordinated term debt)  The treatment of the SBLF's financings was important given that banks must maintain a minimum total risk-based capital ratio of 8% (the ratio measures bank capital against assets, with asset values risk-weighted, or adjusted on a scale of riskiness) to be considered adequately capitalized by federal banking regulators  In addition, banks must maintain a minimum Tier 1 risk-based ratio to assets, typically 3% for banking institutions with the highest financial ratings and 4% for others  According to Treasury officials, under Internal Revenue Service (IRS) rules, S corporations can have only a single class of stock (common shares)  Consequently, these institutions cannot issue preferred stock to Treasury  As a result, Treasury had to consider purchasing subordinated debt from these institutions, which the banking regulatory agencies would likely designate as Tier 2 capital  Treasury officials believed that providing Tier 2 capital would probably result in fewer S corporation participants  Additionally, because mutual lending institutions do not issue stock, Treasury officials were unable to receive preferred stock as consideration for an investment in this type of institution  Therefore, Treasury had to consider purchasing subordinated debt from these institutions as well  Treasury completed its regulations for C corporation banks first  For C corporations, SBLF funds are treated as Tier I capital and the Treasury purchases senior perpetual noncumulative preferred stock (or an equivalent)  The stock pays a quarterly dividend on the first day of each quarter after closing of the SBLF capital program funding  Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view  It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings) but may also include nonredeemable, noncumulative preferred stock  In contrast, S corporations and mutual lending institutions receive unsecured subordinated debentures from the Treasury, which are considered Tier 2 capital for regulatory capital requirements  The application deadline for C corporation banks was May 16, 2011  The application deadline for Subchapter S corporations and mutual lending institutions was June 6, 2011, and the application deadline for CDFIs was June 22, 2011  A total of 926 institutions applied for $11 8 billion in SBLF funding  Treasury approved more than $4 0 billion in SBLF financing to 332 lending institutions ($3 9 billion to 281 community banks and $104 million to 51 CDFIs)  SBLF recipients have offices located in 47 states and the District of Columbia  The average financing was $12 1 million, ranging from $42,000 to $141 0 million  Of the 332 lending institutions which received financing, 137 institutions had participated in TARP's Community Development Capital Initiative or its Capital Purchase Program  These institutions received nearly $2 7 billion in SBLF financing (66 8% of the total)  Treasury is required to publish monthly reports describing all transactions made under the SBLF program during the reporting period  It is also required to publish a semiannual report (each March and September) providing all projected costs and liabilities, operating expenses, and transactions made by the SBLF, including a list of all participating institutions and the amounts each institution has received under the program  Treasury must also publish a quarterly report describing how participating institutions have used the funds they have received  SBLF participants must submit an initial supplemental report to Treasury no later than five business days before closing  The report provides information from the institution's FDIC call reports or, for holding companies, from their subsidiaries' FDIC call reports, that Treasury uses to establish an initial baseline for measuring the SBLF participants' progress in making loans to small businesses  The initial baseline is the average amount of qualified small business lending that was outstanding for the four full quarters ending on June 30, 2010  It is derived by first adding the outstanding amount of lending reported for all commercial and industrial loans, owner-occupied nonfarm, nonresidential real estate loans, loans to finance agricultural production and other loans to farmers, and loans secured by farmland  Then, the outstanding amount of lending for large loans (defined as any loan or group of loans greater than $10 million), loans to large businesses (defined as businesses with annual revenues greater than $50 million), and the portion of any loans guaranteed by the U S  government or for which the risk is assumed by a third party is subtracted from that amount  The lending institution then adds back any cumulative charge-offs with respect to such loans since July 1, 2010  This last adjustment is done to prevent lending institutions from being penalized for appropriately charging off loans  Each SBLF participant's small business lending baseline is also adjusted to take into account any gains in qualified small business lending during the four baseline quarters resulting from mergers, acquisitions, and loan purchases  This adjustment is designed to ensure that dividend rate reductions provided to any SBLF participant correspond to additional lending to small businesses and not to the acquisition of existing loans  In addition, the cumulative baseline for all SBLF participants will decrease over time as SBLF participants repay their SBLF loans and exit the program  For example, the initial small business lending baseline for the 332 SBLF participants as of March 31, 2011, was $35 52 billion ($34 75 billion for 281 banks and $770 48 million for 51 CDFIs)  The small business lending baseline for the 50 institutions that continued to participate in the SBLF as of December 31, 2018, was $1 5 billion ($808 8 million for 7 banks and $714 5 million for 43 CDFIs)  Table 3 provides the number and type of SBLF participating institutions, the small business lending baseline, the amount of small business lending by participants, the change in small business lending by participants, and the change in small business lending by both current and former participants from 2011 to 2018  The number of SBLF participating institutions is declining as institutions repay their loans and exit the program  As Treasury anticipated, this decline has accelerated following the first quarter of 2016 because the dividend rates for C corporation banks and savings associations and for S corporation banks and mutual lending institutions were increased at that time (to 9% and 13 8%, respectively)  SBLF institutions are also required to submit quarterly supplemental reports, due in the calendar quarter following submission of the initial supplemental report and in each of the next nine quarters, to determine their dividend rate for the next quarter  Using information contained in the quarterly supplemental reports, Treasury announced in its April 2019 quarterly report on SBLF Participants' Small Business Lending Growth that, as of December 31, 2018 The 50 current SBLF participants (7 banks and 43 CDFIs) increased their small business lending by $1 347 billion over a $1 523 billion baseline  Since inception, the total increase in small business lending reported by both current and former SBLF participants is more than $19 1 billion over the baseline  All seven of the currently participating community banks and 39 of the 43 currently participating CDLFs increased their small business lending over baseline levels  Most current participants report that their small business lending increases have been substantial, with 43 of 50 current SBLF participants (86 0%) increasing small business lending by 10% or more  Treasury officials have praised the SBLF's performance  For example, on October 9, 2012, then-Deputy Secretary of the Treasury Neal Wolin announced that the SBLF quarterly use of funds report released that day "is further indication that the Administration's Small Business Lending Fund is continuing to help create an environment in which entrepreneurial small businesses can succeed and excel " He added that "banks in the SBLF program continue to show large increases in the lending available for small businesses to grow, create jobs, and support families in communities across the country " Some financial commentators have expressed a somewhat less sanguine view of the program's performance  For example, one commentator noted, after the release of the quarterly use of funds report in January 2012, that although the report of increased small business lending was positive news "it is difficult to isolate the proportion of new lending that would have occurred anyway" due to improvements in the economy  Another commentator noted that the data may have been skewed by SBLF participants who were entering the small business lending market for the first time, making the increases appear larger and more significant than they actually are; yet another noted that the reported growth in small business lending occurred over six quarters (since June 30, 2010) and that the results, although positive, are "not as impressive as it may seem " A commentator argued in September 2012 that "if the SBLF ends up being a success story, it will have been on a far smaller scale than either Obama or Congress had originally expected  What's more, it's become clear that even boatloads of financing won't change the fact that demand for the loans themselves has also fallen off, as small businesses themselves are reluctant to expand in a stagnant economy " In addition, on August 29, 2013, Treasury's Office of Inspector General (OIG) released an audit of Treasury's reporting of small business lending gains relative to small business lending levels prior to the lenders' participation in the program  The OIG found that "small business lending gains reported by Treasury are significantly overstated and cannot be linked directly to SBLF funding " Specifically, the OIG noted that "substantial amounts [$3 4 billion of the then reported $8 9 billion] of the reported gains occurred prior to participants receiving SBLF funding " As the OIG explained, the lending gains reported [by Treasury] were measured against the same baseline period that the Small Business Jobs Act of 2010 (the Act) instructs Treasury to use for setting dividend rates for repayment of the SBLF capital, which is the four calendar quarters [which] ended [on] June 30, 2010  However, measuring program performance against a baseline with a midpoint seven quarters prior to when most participants received funding inflates program accomplishments and is not responsive to provisions in the Act that direct Treasury to report on participant use of the SBLF funds received  The OIG also argued that the reported lending gains cannot be directly linked to the SBLF capital that Treasury invested in the financial institutions because the lending gains reported "represent all small business lending gains that institutions participating in the SBLF achieved, regardless of how the loans were funded " In addition, the OIG noted, among other findings, that "a relatively small number (35 or 11%) of SBLF participants accounted for half of small business lending increases between the baseline figure and December 31, 2012 " During the 112 th Congress, several bills were introduced to change the SBLF  None of the bills were enacted  For example, then-Senator Snowe introduced S  681 , the Greater Accountability in the Lending Fund Act of 2011, on March 30, 2011  Senator Snowe argued that While I would prefer to terminate this fund altogether, it is unlikely based on the current political environment, which is why we must work to protect taxpayers from some of its most egregious provisions  My goal with this legislation is to ensure that only healthy banks have access to taxpayer money, that they are required to repay loans within a reasonable period of time, and that small businesses find the affordable credit they need  The bill would have, among other things, required recipients to repay SBLF distributions within 10 years of the receipt of the investment; terminated the program no later than 15 years after the date of the bill's enactment; prohibited the Secretary of the Treasury from making capital investments under the program if the FDIC is appointed receiver of 5% or more of the institutions receiving an investment under the program; prohibited participation by any institution that received an investment under TARP (effective on the date of the bill's enactment); removed provisions allowing the Secretary of Treasury to make a capital investment in institutions that would otherwise not be recommended to receive the investment based on the institution's financial condition, but are able to provide a matching investment from private, nongovernmental investors; required the approval of appropriate financial regulators when determining whether an institution should receive a capital investment; and revised the benchmark against which changes in the amount of small business lending is measured from the four full quarters immediately preceding the date of enactment to calendar year 2007  In addition, H R  1387 , the Small Business Lending Fund Accountability Act of 2011, would have provided the Special Inspector General for TARP responsibility for providing oversight over the SBLF  S Amdt  279 to S  493 , the Small Business Innovation Research, Small Business Technology Transfer Reauthorization Act of 2011, would have prevented TARP recipients from using funds received in any form under any other federal assistance program, including the SBLF program  H R  2807 , the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund beginning on the date when the Secretary of the Treasury's authority to make capital investments in eligible institutions expired (on September 27, 2011)  The bill's stated intent was "to increase the availability of credit for small businesses " H R  3147 , the Small Business Lending Extension Act, would have extended the Department of the Treasury's investment authority from one year following enactment to two years and required the Treasury Secretary to provide any institution not selected for participation in the program the reason for the rejection, ensure that the rejection reason remains confidential, and establish an appeal process that provides the institution an opportunity to contest the reason provided for the rejection of its application  During the 113 th Congress, H R  2474 , the Community Lending and Small Business Jobs Act of 2013, would have, among other provisions, transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund  The SBLF was enacted as part of a larger effort to enhance the supply of capital to small businesses  Advocates argued that the SBLF would help to address the decline in small business lending and create jobs  Opponents were not convinced that it would enhance small business lending and worried about the program's potential cost to the federal treasury and its similarities to TARP  Participating institutions are reporting they have increased their small business lending  However, as has been discussed, questions have been raised concerning the validity of these reported amounts  Specifically, as Treasury's OIG argued in its August 2013 audit, more than one-third of the reported lending gains at that time occurred prior to September 30, 2011, the quarter in which most SBLF participants received their SBLF funds; the reported small business lending gains reflect all of the small business lending gains that the participants achieved, regardless of how the loans were funded; and previous OIG audits "have shown that a large number of participants misreport their small business lending activity " In those previous audits, "50% or more of the institutions reviewed submitted erroneous lending data to Treasury, either overstating or understating their small business lending gains " In addition to questions related to the validity of the reported small business lending gains, any analysis of the program's influence on small business lending is likely to be more suggestive than definitive because differentiating the SBLF's effect on small business lending from other factors, such as changes in the lender's local economy, is methodologically challenging, especially given the relatively small amount of financing involved relative to the national market for small business loans  The SBLF's $4 0 billion in financing represents less than 0 7% of outstanding small business loans (as defined by the FDIC)  In terms of the concerns expressed about the program's potential cost, Treasury initially estimated in December 2010 that the SBLF could cost taxpayers up to $1 26 billion (excluding administrative costs that were initially estimated at about $26 million annually but actual outlays were $4 54 million in FY2014, $9 05 million in FY2015, $5 01 million in FY2016, and $3 4 million in FY2017)  Treasury based that estimate on an expectation that about $17 billion in SBLF financings would be disbursed  In October 2011, Treasury estimated the program's costs based on actual participant data  It estimated that the SBLF would generate a savings of $80 million (excluding administrative costs), with the savings coming primarily from a lower-than-expected financing level and, to a lesser extent, improvements in projected default rates "due to higher participant quality than expected" and lower market interest rates  Treasury issues a semiannual report on SBLF costs  In its latest semiannual cost report, released on August 16, 2018, Treasury estimated that the SBLF will "generate a lifetime positive return of $31 million [excluding administrative costs] for the Treasury General Fund " One issue that arose relative to the program's projected cost is the noncumulative treatment of dividends  Treasury's OIG reported in May 2011 that Under the terms set by legislation, dividend payments are non-cumulative, meaning that institutions are under no obligation to make dividend payments as scheduled or to pay off previously missed payments before exiting the program  This dividend treatment differs from the TARP programs, in which many dividend payments were cumulative  This change in dividend treatment was driven by changes in capital requirements mandated by the Collins Amendment to the Dodd-Frank Act  The amendment equalizes the consolidated capital requirements for Tier 1 capital of bank holding companies by requiring that, at a minimum, regulators apply the same capital and risk standards for FDIC-insured banks to bank holding companies  Under TARP, the FRB [Federal Reserve Board] and FDIC treated capital differently at the holding company and depository institution levels  The FRB treated cumulative securities issued by holding companies as Tier 1 capital, while FDIC treated non-cumulative securities issued by depository institutions as Tier 1 capital  In order to comply with the Dodd-Frank Act requirement that securities purchased from holding companies receive the same capital treatment as those purchased from depository institutions, Treasury made the dividends under SBLF non-cumulative  Additionally, given that Tier 1 capital must be perpetual and cannot have a mandatory redemption date, the 10-year repayment period in the Small Business Jobs Act cannot be enforced  Treasury addressed this issue by placing the following additional requirements and restrictions on participants who miss dividend payments: the participant's CEO [Chief Executive Office] and CFO [Chief Financial Officer] must provide written notice regarding the rationale of the board of directors (BOD) for not declaring a dividend; no repurchases may be affected and no dividends may be declared on any securities for the applicable quarter and the following three quarters; after four missed payments (consecutive or not), the issuer's BOD must certify in writing that the issuer used best efforts to declare and pay dividends appropriately; after five missed payments (consecutive or not), Treasury may appoint a representative to serve as an observer on the issuer's BOD; and after six missed payments (consecutive or not), Treasury may elect two directors to the issuer's BOD if the liquidation preference is $25 million or more  Treasury's OIG agreed that Treasury's equity investment policy is consistent with the legislation and that "it has reasonably structured the program to incentivize payment of dividends " However, it recommended that "Congress consider whether an amendment to the Small Business Jobs Act and/or waiver from the Collins Amendment to the Dodd-Frank Act is needed to make the repayment of dividends a requirement for exiting the program " In conclusion, congressional oversight of the SBLF is currently focused on the program's potential long-term costs and effects on small business lending  Underlying those concerns are fundamental disagreements regarding the best way to assist small businesses  Some advocate the provision of additional federal resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs  Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit  They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs  The SBLF's Legislative Origin On March 16, 2009, President Obama announced the first SBLF-like proposal  Under that proposal, the Department of the Treasury would have used TARP funds to purchase up to $15 billion of SBA-guaranteed loans  The purchases were intended to "immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks " The plan was dropped after it met resistance from lenders  Some lenders objected to TARP's requirement that participating lenders comply with executive compensation limits and issue warrants to the federal government  Smaller, community banks objected to the program's paperwork requirements, such as the provision of a small-business lending plan and quarterly reports  In his January 2010 State of the Union address, President Obama proposed the creation of a $30 billion SBLF to enhance access to credit for small businesses: When you talk to small business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies  Financing remains difficult for small business owners across the country, even those that are making a profit  Tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat  In response to the opposition community lenders had expressed concerning TARP's restrictions in 2009, the Obama Administration proposed that Congress approve legislation authorizing the transfer of up to $30 billion in TARP spending authority to the SBLF and statutorily establish the new program as distinct and independent from TARP and its restrictions  The Administration's legislative proposal was finalized and sent to Congress on May 7, 2010  Representative Barney Frank, then-chair of the House Committee on Financial Services, introduced H R  5297 , the Small Business Lending Fund Act of 2010, on May 13, 2010  The House Committee on Financial Services held a hearing on H R  5297 on May 18, 2010, and passed the bill, as amended to include a State Small Business Credit Initiative, the following day  The House passed the bill, as amended to include a Small Business Early-Stage Investment Program, a Small Business Borrower Assistance Program, and some small business tax reduction provisions, on June 17, 2010  The House-Passed Version of the SBLF Title I of the House-passed version of H R  5297 authorized the Secretary of the Treasury to establish a $30 billion SBLF "to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions" with total assets equal to or less than $1 billion or $10 billion (as of the end of the fourth quarter of calendar year 2009) "in order to increase the availability of credit for small businesses " The authority to make capital investments in eligible institutions was limited to one year after enactment  Eligible financial institutions having total assets equal to or less than $1 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the SBLF in an amount not exceeding 5% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 7,340 FDIC-insured lending institutions reported having assets amounting to less than $1 billion  Eligible financial institutions having total assets equal to or less than $10 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the fund in an amount not exceeding 3% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 565 FDIC-insured lending institutions reported having assets of $1 billion to $10 billion  Risk-weighted assets are assets such as cash, loans, investments, and other financial institution assets that have different risks associated with them  FDIC regulations (12 C F R  §567 6) establish that cash and government bonds have a 0% risk-weighting; residential mortgage loans have a 50% risk-weighting; and other types of assets (such as small business loans) have a higher risk-weighting  Lending institutions on the FDIC problem bank list or institutions that have been removed from the FDIC problem bank list for less than 90 days were ineligible to participate in the program  Lending institutions could refinance securities issued through the Treasury Capital Purchase Program (CPP) and the Community Development Capital Incentive (CDCI) program under TARP, but only if the institution had not missed more than one dividend payment due under those programs  Participating banks would be charged a dividend rate of no more than 5% per annum initially, with reduced rates available if the bank increased its small business lending  For example, during any calendar quarter in the initial two years of the capital investments under the program, the bank's rate would be lowered if it had increased its small business lending compared to the average small business lending it made in the four previous quarters immediately preceding the enactment of the bill, minus some allowable adjustments  A 2 5% to less than 5% increase in small business lending would have lowered the rate to 4%, a 5% to less than 7 5% increase would have lowered the rate to 3%, a 7 5% to less than 10% increase would have lowered the rate to 2%, and an increase of 10% or greater would have lowered the rate to 1%  Table A-1 shows the dividend rates associated with small business lending increases for C corporation banks and savings institutions under H R  5297   These rates were subsequently included in the final law  The bill also authorized the Secretary of the Treasury to adjust these dividend rates for S corporations "to take into account any differential tax treatment of securities issued by such eligible institution " Also, Community Development Financial Institutions were to be charged a dividend rate of 2% per annum for eight years, and 9% thereafter  SBLF applicants were also required to submit a small business lending plan to the appropriate federal banking agency and, for applicants that are state-chartered banks, to the appropriate state banking regulator  The plan was to describe how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate  The plan was to be treated as confidential supervisory information  The Secretary of the Treasury was required to consult with the appropriate federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, before determining if the eligible institution was to participate in the program  The bill specified that the SBLF would be "established as separate and distinct from the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008  An institution shall not, by virtue of a capital investment under the Small Business Lending Fund Program, be considered a recipient of the Troubled Asset Relief Program " The bill also directed that all funds received by the Secretary of the Treasury in connection with purchases made by the SBLF, "including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt " The Senate-Passed Version of the SBLF Title IV of the Senate-passed version of H R  5297 , which later became law, authorized the Secretary of the Treasury to establish a $30 billion SBLF to make capital investments in eligible community banks with total assets equal to or less than $1 billion or $10 billion  There were several differences between the Senate-passed version of H R  5297 's SBLF provisions and the SBLF provisions in the House-passed version of H R  5297   Specifically, the House-passed version of H R  5297 indicated that eligible institutions may be insured depository institutions that are not controlled by a bank holding company or a savings and loan holding company that is also an eligible institution and is not directly or indirectly controlled by any company or other entity that has total consolidated assets of more than $10 billion, bank holding companies, savings and loan holding companies, community development financial institution loan funds, and small business lending companies, all with total assets of $10 billion or less (as of the end of 2009)  The Senate-passed version of H R  5297 did not provide eligibility to small business lending companies  House-passed version of H R  5297 defined small business lending "as small business lending as defined by and reported in an eligible institution's quarterly call report, where each loan comprising such lending is made to a small business and is one the following types: (1) commercial and industrial loans; (2) owner-occupied nonfarm, nonresidential real estate loans; (3) loans to finance agricultural production and other loans to farmers; (4) loans secured by farmland; (5) nonowner-occupied commercial real estate loans; and (6) construction, land development and other land loans " The Senate-passed version of H R  5297 's definition of small business lending did not include nonowner-occupied commercial real estate or construction, land development and other land loans  Senate-passed version of H R  5297 had an exclusion provision prohibiting recipient lending institutions from using the funds to issue loans that have an original amount greater than $10 million or that would be made to a business with more than $50 million in revenues  The House-passed version of H R  5297 did not contain this provision  House-passed version of H R  5297 indicated that the incentives received in the form of reduced dividend rates during the first 4 5-year period following the date on which an eligible institution received a capital investment under the program would be contingent on an increase in the number of loans made  If the number of loans made by the institution did not increase by 2 5% for each 2 5% increase of small business lending, then the rate at which dividends and interest would be payable during the following quarter on preferred stock or other financial instruments issued to the Treasury by the eligible institution would be (i) 5%, if this quarter is within the two-year period following the date on which the eligible institution received the capital investment under the program; or (ii) 7%, if the quarter is after the two-year period  The Senate-passed version of H R  5297 did not contain this legislative language  House-passed version of H R  5297 included an alternative computation provision that would have allowed eligible institutions to compute their small business lending amounts for incentive purposes as if the definition of their small business lending amounts did not require that the loans comprising such lending be made to small business  This alternative computation would have been allowed if the eligible institution certified that all lending included by the institution for purposes of computing the increase in lending was made to small businesses  The Senate-passed version of H R  5297 did not contain this provision  House-passed version of H R  5297 indicated that an eligible institution that is a community development loan fund may apply to receive a capital investment from the SBLF in an amount not exceeding 10% of total assets, as reported in the audited financial statements for the fiscal year of the eligible institution that ended in calendar year 2009  The Senate-passed version of H R  5297 specifies 5%  House-passed version of H R  5297 would have required the Secretary of the Treasury, in consultation with the Community Development Financial Institutions Fund, to develop eligibility criteria to determine the financial ability of a Community Development Loan Fund to participate in the program and repay the investment  It provided a list of recommended eligibility criteria that the Secretary of the Treasury could use for this purpose  The Senate-passed version of H R  5297 provided a similar, but mandatory, list of eligibility criteria that must be used for this purpose  House-passed version of H R  5297 contained a temporary amortization authority provision which would have allowed an eligible institution to amortize any loss or write-down on a quarterly straight-line basis over a period of time, adjusted to reflect the institution's change in the amount of small business lending relative to the baseline  The Senate-passed version of H R  5297 did not contain this provision  The Senate's version of H R  5297 was agreed to in the Senate on September 16, 2010, after considerable debate and amendment to remove the Small Business Early-Stage Investment Program and Small Business Borrower Assistance Program, revise the SBLF, and add numerous other provisions to assist small businesses, including additional small business tax reduction provisions  The House agreed to the Senate amendments on September 23, 2010, and President Obama signed the bill, retitled the Small Business Jobs Act of 2010 ( P L  111-240 ), into law on September 27, 2010 


Report 2:  Serbia, another CEFTA signatory, is also an important export market  Bosnia's major exports include vehicle seats, raw materials, leather products, textiles, energy, and wood products  The EU is also Bosnia's primary source of foreign direct investment (FDI)  In 2016, 63% of Bosnia's FDI came from EU countries, with Austria, Croatia, and Slovenia the top sources  Serbia is also a significant source of FDI (16 3%)  However, Bosnia's fragmented legal and administrative structure create a challenging investment climate  Many relevant laws differ between the two entities  Corruption, entrenched economic interests, and political instability also deter investment  As a result, FDI amounts to just 2% of Bosnia's GDP, well below the Western Balkan average of 5%  Bosnia was the region's lowest-rated country in the World Bank's 2019 Ease of Doing Business Index  U S  and EU policymakers view the NATO and EU accession processes as a positive force for democratization and reform in the Western Balkans, including Bosnia  According to analysts, this assessment informed the United States' partial retreat from the region in the 2000s and 2010s  EU membership is one of the few policy issues for which there is relatively broad consensus among Bosnia's politicians and population  The EU's "fundamentals first" approach to enlargement in the Western Balkans frontloads the accession process with meeting the core requirements of having a democratic political system and functioning market economy; in Bosnia, the EU is currently focused on issues relating to the rule of law, public administration reform, and economic development  In 2016, Bosnia submitted its application to join the EU  Its current status is potential candidate , which entitles it to receive financial assistance from the EU's Instrument for Pre-Accession Assistance II (IPA II)  Between 2014 and 2020, Bosnia is expected to receive €552 million in IPA II allocations, making the EU Bosnia's largest source of foreign assistance  Many EU member states provide additional aid to Bosnia through domestic foreign assistance programs  Bosnia's EU membership prospects are uncertain  In a 2018 progress report, the European Commission (the EU's executive) flagged Bosnia's slow implementation of reforms, including the 2015 Reform Agenda (a flagship EU initiative in Bosnia) and numerous domestic and international court rulings (see "Legal Challenges," above)  Some analysts question whether Bosnia, under its current political system, would be capable of meeting the membership requirement of harmonizing domestic legislation with the many thousands of provisions in the acquis communautaire, the cumulative body of EU legislation, case law, and regulations  In comparison to EU membership, Bosnian leaders are more divided over the issue of joining NATO  These divisions largely fall along Bosnian Serb and Bosnian Croat/Bosniak lines  Bosnian Serb opposition is rooted in resentment over NATO's role in the Bosnian war, and may also reflect a desire to remain in lockstep with neighboring Serbia, which also does not seek NATO membership  Bosnia joined NATO's Partnership for Peace in 2006 and secured an Individual Partnership Action Plan in 2008  In 2010, NATO indicated that it would launch a Membership Action Plan (MAP)—a program to help aspiring members meet membership requirements—once Bosnia meets several conditions, the most challenging of which is the reregistration of permanent defense installations from entity to state-level government  RS officials have resisted ceding control over defense installations on entity territory  Although Bosnia does not yet meet these requirements, in December 2018 NATO foreign ministers invited Bosnia to activate its MAP by submitting its first Annual National Program  Some analysts interpreted this invitation as a gesture to generate reform momentum in Bosnia's fragile post-election period  The Bosniak and Croat members of the presidency responded positively, but Bosnian Serb leaders (and most Bosnian Serbs) do not want Bosnia to join NATO  In October 2017, the RS National Assembly passed a resolution supporting military neutrality  RS President Željka Cvijanović reiterated this stance after NATO's invitation, and Dodik—now a member of the state-level presidency—also has vowed to pursue military neutrality  Bosnia's relations with Croatia and Serbia are seen as an important component of regional stability  However, bilateral relations have often been fraught as a legacy of the Bosnian war, as well as sensitivities over Croatia and Serbia's relations with Bosnian Croats and Serbs  While democratic gains in Croatia and Serbia after 2000 contributed to improved relations with Bosnia, they remain reluctant to examine or acknowledge their role in the Bosnian war  At times, Bosnian leaders have objected to what they describe as Croatian and Serbian meddling in Bosnia's affairs  Ex-Bosnian Croat member of the presidency Dragan Čović and current Bosnian Serb member of the presidency Milorad Dodik draw support from leaders in Croatia and Serbia and reportedly hold Croatian and Serbian citizenship, respectively, alongside their Bosnian citizenship  The Croatian government financially and politically backed Čović in Bosnia's 2018 elections, and Croatian politicians have raised the issue of Bosnian Croats' constitutional challenges (see above, "Legal Challenges") in forums like the European Parliament, NATO, and the United Nations  These moves prompted three former High Representatives to Bosnia to issue a joint letter expressing alarm over Croatia's "meddling" in Bosnia's internal affairs  The Croatian government also challenged the legitimacy of Željko Komšić as the Croat member of the Bosnian presidency (see above, "2018 General Election")  Some parties in Croatia hold Croatian election campaign events on Bosnian territory to mobilize Bosnian Croat voters with dual citizenship to vote in Croatia's elections  The Serbian government likewise supports Dodik, who is a frequent visitor to Belgrade  Some Serbian politicians have made statements supporting convicted Bosnian Serb war criminals, inflaming an issue that remains highly sensitive in Bosnia  Bosnia and Serbia have an unresolved demarcation dispute over approximately 40 square kilometers of border area, including a railway segment and hydroelectric power stations  Bosnia has dual citizenship treaties with Croatia and Serbia, resulting in hundreds of thousands of Bosnian Croats and Bosnian Serbs acquiring dual citizenship  This has raised jurisdictional issues in cases in which indicted war criminals hold dual citizenship  Despite occasional tensions in their relations, Croatia and Serbia are important economic partners for Bosnia  Both countries are among Bosnia's top export markets and top sources of FDI  As part of its enlargement strategy in the Western Balkans, the EU has embraced a connectivity agenda to improve regional transportation, energy, and infrastructural linkages, reserving up to €1 billion in grants for projects for the period 2015-2020  Officials believe that improved connectivity could benefit bilateral relations and contribute to regional stability  Given its strategic location and relatively small, weak states, the Balkan region has long drawn in more powerful states  Many analysts maintain that as the United States and the European Union have both scaled back their presence in the Balkans to address other issues since the late 2000s, Russia, Turkey, and China partly filled the vacuum  U S  and EU officials have expressed concern over Russian influence in the Western Balkans, particularly after Russia occupied Ukraine's Crimea region in 2014  Many analysts maintain that Russia does not have a grand strategy in the Western Balkans, but rather aims to prevent Euro-Atlantic integration and shore up its claims to great power status by asserting itself in the EU's "inner courtyard " Analysts have identified several Russian tools in the region, including playing a "spoiler" role, projecting soft power, and leveraging energy dominance  Observers contend that Russia plays a "spoiler" role in Bosnia by exacerbating ethnic divisions, backing illiberal or anti-Western political factions, and helping to militarize RS  They claim that these actions help sustain the dysfunction and gridlock that undermine Bosnia's Euro-Atlantic reform efforts  Russia has supported Bosnian Serb and Bosnian Croat nationalist leaders Milorad Dodik and Dragan Čović  Dodik's meeting with Russian President Vladimir Putin just before Bosnia's October 7, 2018 general election was one of nearly ten meetings between the two over the past three years, signaling high-level Russian support  Many experts assert that Russia has been a key ally to Dodik in resisting Western pressure to cooperate on reforms  Moscow has also supported divisive RS policies  When Dodik violated a Bosnian Constitutional Court ruling in 2016 by holding a referendum to establish a controversial "Statehood Day," Russia stood apart from the High Representative and Western diplomats by supporting the initiative  More recently, Russia stated its support for RS's controversial Srebrenica commission (see above)  Analysts have also expressed concern at Russia's apparent support for Čović, who has advocated greater autonomy for Croats and the creation of a third Croat entity  Some analysts have expressed concern at Russia's role in RS's security sector  Russian forces have trained RS police special forces on counterterrorism and intelligence  Some observers believe that these exercises contribute to militarization in RS, potentially pushing the police force beyond its civilian law enforcement mandate  Analysts caution that militarization could increase the scale of violence in any confrontation between RS and the Bosnian government  Some Bosnian Serb ultranationalist and veterans groups have fought alongside pro-Russia combatants in Ukraine, and analysts believe they could be mobilized to support RS leaders as well  Russian soft power draws upon religious and cultural kinship with Bosnian Serbs, as well as Russia's history of support during the wars of Yugoslav disintegration  Kremlin-linked media, like Sputnik and RT , amplify existing anti-Western narratives and positively shape public opinion toward Russia  Some local media further propagate Sputnik and RT articles  A 2018 National Democratic Institute media study found that RS media stories about Russia were overwhelmingly positive, while the tone of most stories about the United States and NATO was negative  Pro-Russian media glorifies the Russian military, highlights cultural and religious links between Serbs and Russians, and documents high-level meetings between RS and Russian officials  Economic relations between Russia and RS have deepened in recent years  Russia is the largest source of FDI in RS, and it is largely concentrated in the energy sector  In 2007, Russian state-owned oil company Zarubezhneft bought RS's Bosanski Brod oil refinery, motor oil processing facilities in nearby Modrica, and retailer Banjaluka Petrol  Some analysts believe that these assets—which were purchased without an open tender—give Zarubezhneft influence in RS  In addition to being an important employer, Zarubezhneft is RS's biggest taxpayer; its value-added tax and excise duty contributions reportedly account for 25% of RS budget revenue  Bosnia depends upon Russian natural gas imports via Ukraine  Energy policy is vested in the entities, and Russian natural gas provider Gazprom reportedly has used its market dominance to pit the two entities against one another and undermine projects that would diversify supplies  Many analysts believe that Turkey's influence in Bosnia has increased over the last two decades due to Ankara's close relationship with Bosniak leaders  Some Turkish officials reportedly view Bosnia as a natural sphere of influence given geographic and historical connections  Observers note that Turkish President Recep Tayyip Erdogan has at times invoked Ottoman-era ties to Bosnia and religious kinship with Bosniaks as soft power tools  Turkish influence in Bosnia has expanded since Yugoslavia's collapse  During the 1992-1995 war, Turkey gained prestige among Bosniaks by condemning the international arms embargo against Bosnia, arguing that it prevented Bosniaks from defending themselves  Turkey, as well as other predominantly Muslim countries like Iran and Saudi Arabia, reportedly supplied Bosniak forces with arms  Turkish influence has continued since the war's end  Bosnia is one of the top recipients of Turkish Cooperation and Coordination Agency assistance; much of this support is earmarked for projects to restore Ottoman-era buildings and monuments  A Turkish Cultural Center was established in Bosnia in 2003, and in 2009 the Yunus Emre Foundation, an NGO founded by the Turkish government, opened an office in Sarajevo to promote Turkish language and culture  Turkey has popular support among Bosniaks  In a 2018 International Republican Institute survey, 76% of Bosniak respondents had positive views of Turkey—the strongest support among Bosniaks for any foreign state  Many Bosnian Croats and Bosnian Serbs look to Croatia and Serbia as external protectors, and some analysts believe that Turkey has attempted to establish a similar role for itself vis-à-vis Bosniaks  Observers contend that Erdogan's ruling party has particularly strong ties to the largest Bosniak ethnic party, the SDA  Erdogan and Turkish state-owned media openly supported SDA candidate Bakir Izetbegović in his bid for the Bosniak seat on the presidency in 2014  Some observers believe that Izetbegović's clout within the SDA rests in part on his support from Erdogan  Economic relations between Bosnia and Turkey have deepened in recent years  Turkish FDI in Bosnia accounted for 5 6% of FDI flows in 2016  One notable project is a highway to connect Sarajevo to Belgrade, Serbia  After years of disagreement, Bosnian officials approved the route in February 2019  Turkey is expected to provide funding for some of the expected €3 billion in costs, although the terms of the contract are not yet resolved  Some officials, including French President Emmanuel Macron, have expressed concern over Turkey's alleged ambitions as part of broader EU concern over external influence in the Balkans  However, analysts caution that Turkey's ambitions and capabilities in the Balkans may be overstated  They note that the scope of Turkish investment is sometimes exaggerated in the media, and that proposed projects do not always come to fruition  While Russian and Turkish influence in Bosnia relies in part on soft power, China's presence in Bosnia is primarily economic  Between 2011 and 2019, Chinese investments in Bosnia amounted to an estimated $3 6 billion, primarily in the form of direct lending for energy and transportation projects  Chinese firms have contracts to construct or expand energy plants, including a €350 million loan to construct a coal-fired plant in Stanari, RS  A €1 4 billion deal was signed to construct a highway between Banja Luka and Mlinište  In March 2019, the EU Energy Community criticized the FBiH entity government's decision to guarantee a €600 million loan from China's Exim Bank to build a coal-fired power plant in Tuzla  However, some analysts caution that China's economic influence in Bosnia may be overstated at present  While China's pledged investments in high-visibility projects garner media attention, the actual amount of Chinese FDI is far less than that of the EU  Moreover, many pledged projects do not come to fruition  Nevertheless, EU and U S  officials have voiced concern over the scope of China's investments in the Balkans, as well as Chinese lending practices  Chinese loans often require recipient state governments to assume the loan burden, potentially leading to high external debt  The EU has also raised concerns that Chinese lending practices violate EU rules in public procurement because they frequently require use of Chinese contractors, laborers, or supplies  In contrast to EU funds, which are partly designed to spur reform, Chinese loans have few conditions and rules linked to transparency or reform  Finally, EU officials have expressed concern that China's economic might could be a source of leverage over recipient states that are candidates or potential candidates for EU membership and thus impede the EU's ability to speak with one voice on relations with China if they do become members  Bosnia was not a core transit country in the "Balkan Route" that hundreds of thousands of migrants and refugees followed in an attempt to reach the EU during heightened flows in 2015 and early 2016  However, recent route shifts have brought more migrant and refugee traffic through Bosnia  Since early 2018, an estimated 23,000 migrants and refugees have entered Bosnia; approximately 25% of them remain in the country  Most of them hope to enter EU territory via Bosnia's neighbor, Croatia, and from there move on and enter the EU's visa- and passport-free Schengen Area  However, the Croatian government has expanded border policing, and apprehended individuals are sent back to Bosnia  The EU provided €2 million in 2018 to help Bosnia respond to the crisis and provide shelter to migrants and refugees who are effectively stranded in Bosnia  The migration crisis has triggered a backlash from some Bosnians, particularly in Una-Sana Canton, which borders Croatia and has the highest concentration of migrants and refugees  Some residents of Bihać, Una-Sana's administrative center, protested against camps situated in their municipality in October 2018, while local authorities in Velika Kladuša, another city in the canton, reportedly obstructed the Ministry of Security's plans to house migrants in a local building  The incident illustrates local backlash as well as the state-level government's difficulty enforcing its decisions, even when it has jurisdiction  Islam was introduced to part of Bosnia's population during Ottoman rule  In socialist Yugoslavia, the semi-official Islamic Religious Community played a key role in religious affairs, including legal rulings and religious education  It was renamed the Islamic Community of Bosnia and Herzegovina in 1992, and remains an important religious institution  Islamic tradition in the Balkans, including Bosnia, is generally moderate and secular  The majority of Bosnia's practicing Muslims follow the Hanafi school of Sunni Islam  However, some analysts have expressed concern over the emergence of groups influenced or funded by state and non-state entities in the Arab Gulf states, where more conservative Hanbali Sunni practices are common  Aid workers, missionaries, and "mujahedeen" fighters from the Gulf States promoted transnational Islamist militancy and Salafist Hanbali religious doctrine during Bosnia's 1992-1995 war; Iran's government also supported Bosniak leaders and forces  After the war, Saudi Arabia provided an estimated $600 million in aid to repair and build hundreds of mosques and establish schools and cultural centers that promote socially conservative Sunni views  Iran has also maintained active cultural outreach and other ties to some Bosnian Muslims  Many analysts contend that Salafi groups have limited support in Bosnia because of the traditionally high level of secularism among Bosnian Muslims  They also note that few Bosnian Muslims who subscribe to Salafist ideas and practices have violent intentions, and many of them live in remote rural communities  While most of these groups were not originally affiliated with official religious organizations in Bosnia, the Grand Mufti of Bosnia's Islamic Community exerted pressure on them to acknowledge his authority and his right to monitor religious content  As a result, an estimated 90% of Salafi groups were brought under official structures  Nevertheless, some experts caution that radicalized groups and individuals may pose a terrorist threat despite their small numbers  Radicalized Muslims were implicated in the bombing of a police station in Bugojno in 2010 and a lone-gunman attack on the U S  Embassy in Sarajevo in 2011  The Islamic State (IS) and Nusra Front's gains in Syria and Iraq in the 2010s altered the dynamic of the terrorism threat in Bosnia and broadened the use of social media in recruitment  Between 2012 and 2017, an estimated 350 Bosnian citizens traveled from Bosnia or Bosnian diaspora communities to fight with armed groups in Iraq and Syria  More recently, returned foreign fighters are seen as a potential threat as the position of the IS and other armed groups has weakened  Bosnia's stock of illegal weapons, mines, and explosives may exacerbate the risk posed by returnees  As of December 2017, officials believed that just over 100 Bosnians remained in Syria (including women and children), roughly 50 had returned to Bosnia, and 70 had been killed in the conflict  In 2014, the Bosnian government introduced new criminal offenses to prosecute foreign terrorist fighters and recruiters  Several dozen returned fighters and domestic recruiters have been convicted of these offenses  While the U S  State Department describes Bosnia as a "cooperative counterterrorism partner," it warns that Bosnia's political fragmentation and dysfunction could undermine counterterrorism efforts  For example, in 2017 several ministries proposed new measures to tighten counterterrorism efforts; however, they were not enacted due to political gridlock in state-level and FBiH governments  Initially viewed as a "European problem," the Bosnian conflict eventually helped shape the post-Cold War role of the United States and NATO in European security  When the United States assumed greater responsibilities in resolving the conflict, its role was considerable: leading NATO airstrikes, garnering diplomatic support from Russia and European allies, persuading warring parties to agree to a ceasefire, brokering the Dayton Peace Agreement, and deploying 20,000 troops to Bosnia  According to Richard Holbrooke, the U S  official who brokered the talks, the Bosnian war was a pivotal period in U S  foreign policy in Europe: "The three main pillars of [policy]—U S -Russian relations, NATO enlargement into Central Europe, and Bosnia—had often worked against each other  Now they reinforced each other: NATO sent its forces out of area for the first time in its history, and Russian troops, under an American commander, were deployed alongside them " Some analysts and policymakers believe that the United States' strong hand in resolving the conflict and in shaping Bosnia's political system have made it a stakeholder in Bosnia's future  U S  officials, often in cooperation with the EU, have intervened to defuse crises and broker reform talks  The United States also has imposed sanctions against Bosnian officials: in addition to Dodik (see above), the U S  State Department publicly designated Bosnian Serb politician Nikola Špirić (Dodik's associate) for "significant corruption or gross violation of human rights " U S  policymakers attach strategic importance to Bosnia's stability; many analysts believe turbulence in Bosnia could reverberate in the Balkans and potentially draw in Croatia and Serbia, while instability in other parts of the region could spill over into Bosnia  When the Trump Administration indicated in 2018 that it would consider supporting a potential Serbia-Kosovo agreement to "adjust borders" between the two—a major break with the long-standing EU and U S  policy to oppose redrawing borders in the Balkans along ethnic lines—some analysts expressed concern that the Administration could reshape long-standing U S  policy toward Bosnia  However, the new U S  Ambassador to Bosnia stated in February 2019 that the U S  will continue to be "guarantor of Bosnia and Herzegovina's sovereignty and territorial integrity " On the other hand, many observers also note that U S  engagement in Bosnia (and the Western Balkans) decreased under the administrations of President George W  Bush and President Barack Obama  During this time U S  policymakers turned their focus to geopolitical crises and challenges in other parts of the globe while ceding the regional lead to the EU  Indeed, some analysts have urged the United States to assume a greater role in Bosnia, arguing that Bosnia's current crises warrant it, and that the EU and the United States are more effective in the region when they work together  Congressional interest in Bosnia dates back to the 1992-1995 war  Many Members featured prominently in foreign policy debates over U S  intervention in the conflict  In 2015, the House passed a resolution describing the Srebrenica massacres as a genocide and urging the United States to continue to support Bosnia's territorial integrity ( H Res  310 , 114 th Congress)  In the 114 th and 115 th Congresses, a bill was introduced in the Senate to establish an enterprise fund to promote economic development and the private sector in Bosnia ( S  2307 and S  864 )  In April 2018, the House Foreign Affairs Committee's Subcommittee on Europe, Eurasia, and Emerging Threats held a hearing on Bosnia's prospects ahead of its October 2018 elections  Congress's engagement with Bosnia also continues within the broader context of policy concern over the external influence of China, Turkey, and Russia in the Western Balkans and energy security  As a potential candidate for EU membership and NATO partner, Bosnia is eligible for assistance through the Countering Russian Influence Funds under the Countering America's Adversaries Through Sanctions Act (CAATSA) enacted in 2017 ( P L  115-44 )  Through congressionally approved (and sometimes expanded) foreign assistance appropriations, Bosnia has received more than $2 billion in aid since 1995  Between 1996 and 1999, the United States pledged $1 billion of the $4 billion international commitment to implementing Dayton's civilian provisions and helping to rebuild Bosnia  The cost of U S  military operations in Bosnia since 1992 is estimated at more than $10 billion ( Appendix I )  Bosnia continues to receive U S  foreign assistance, although the amount has decreased in recent years  Assistance to Bosnia in FY2015 and FY2016 was approximately $33 million each year  In FY2017, it was $53 5 million, and $41 5 million in FY2018  The Administration requested $21 million for FY2019 and $16 9 million for FY2020  Nearly 25 years after the Dayton Peace Agreement, Bosnia faces many challenges  In considering U S  relations with Bosnia, Members of Congress may consider the following questions: How can the United States encourage Bosnia's government to incorporate the legal rulings of the Bosnian Constitutional Court and the European Court of Human Rights into election legislation and the constitution? How can U S  foreign assistance be used to counter Russian influence in Republika Srpska, in particular Russia's close ties to Bosnian Serb politicians and its use of local media and Sputnik to amplify anti-U S  narratives and project pro-Russia soft power? What are the implications of potential militarization in Republika Srpska? How can the United States effectively address this alleged trend? How can the United States support a successful reform initiative that secures transparency and accountability, and facilitates a political community in which politicians and voters are committed to the Bosnian state and socioeconomic challenges that transcend all three ethnic groups? Can the Germany-U K  initiative from 2015 be revived, or is it better to start from scratch? Are the approximately 600 troops in the European Union Force mission in Bosnia sufficient to stabilize Bosnia if violence breaks out? If Serbia and Kosovo agree to normalize relations by redrawing their borders, how can U S  policymakers prevent this development from destabilizing Bosnia, particularly given Milorad Dodik's threats to seek RS secession if Kosovo is "partitioned"? How can the United States encourage Croatia and Serbia to engage in Bosnia in a manner that helps bridge ethnic divisions and contributes to Bosnia's territorial integrity and sovereignty? Given the pervasiveness of corruption in Bosnia, how can U S  assistance most effectively be used to counter it? Does foreign assistance contribute to civic groups and independent media that could serve as a check against corruption? 

ground_truth: Bosnia and Herzegovina (hereafter, "Bosnia") drew heavily on U.S. support after gaining independence from Yugoslavia in 1992. The United States helped end the Bosnian war (1992-1995), one of the most lethal conflicts in Europe since the Second World War, by leading NATO airstrikes against Bosnian Serb forces, brokering the Dayton Peace Agreement in 1995, and deploying 20,000 U.S. troops. Some Members of Congress became involved in policy debates over these measures, and Congress monitored and at times challenged the Bush and Clinton Administrations' response through numerous hearings, resolutions, and legislative proposals. Since 1995, the United States has been a major source of aid to Bosnia and firmly supports its territorial integrity. The United States also supports Bosnia's aspirations for NATO and European Union (EU) membership. Today, Bosnia faces serious challenges. Nearly 25 years after the Dayton Agreement, Bosnia continues to use part of the Agreement as its constitution, which divides the country into two ethnoterritorial entities. Critics charge that Bosnia's political system is too decentralized to enact the reforms required for NATO and EU membership. They also contend that the ethnic power-sharing arrangements and veto points embedded in numerous government bodies are sources of gridlock. Domestic and international courts have ruled against several aspects of Bosnia's constitution, yet the Bosnian government thus far has failed to implement these rulings. Since Bosnia's independence, its politics has been dominated by ethnic parties representing the country's three main groups: Bosniaks (Slavic Muslims), Croats, and Serbs. These parties have prospered under a system that critics charge lacks transparency and accountability. Critics also maintain that ethnic party leaders use divisive nationalist rhetoric to distract from serious issues affecting the country as a whole, including poverty, unemployment, and stalled political reforms. The Bosnian population exhibits low trust in political parties and the government, and disaffection toward the country's elite. U.S. and EU officials brokered several ultimately unsuccessful rounds of constitutional reform negotiations, and continue to call on Bosnia's leaders to implement reforms to make governance more efficient and effective, dismantle patronage networks, and bring Bosnia closer to EU and NATO membership. However, there is little consensus among the country's leaders on how the country should be reformed. Bosnian Serb leaders from the Serb-majority entity (Republika Srpska) have called for greater autonomy and even secession from Bosnia. Some Bosnian Croat leaders have called for partitioning Bosnia's other entity, the Federation of Bosnia and Herzegovina, to create a separate Croat-majority entity. Bosniak leaders, by contrast, generally prefer a more centralized state. Many analysts caution that any move to partition the country could lead to renewed violence, while greater decentralization could make Bosnia's government less functional. U.S. policy has long been oriented toward preserving Bosnia's statehood. Bosnia's 2018 general elections largely returned to power the same entrenched ethnic parties. Of particular concern is the election of Bosnian Serb leader Milorad Dodik to Bosnia's collective presidency. Dodik, a sharp critic of the United States and NATO, has periodically called for a referendum on Republika Srpska's secession. He is under U.S. sanctions for obstructing the Dayton Agreement. In addition to these internal challenges, U.S. and EU officials have expressed concern over external influence in the region. Russia reportedly relies on soft power, energy leverage, and "spoiler" tactics to influence Bosnia, particularly in the Serb-majority entity. Turkish soft power draws on Bosnia's Ottoman-era heritage and Turkey's shared religious tradition with Bosniaks. China is a more recent presence in the region, but its heavy investments and lending have prompted concern on both sides of the Atlantic. Policymakers have also expressed concern at the challenges posed by the return of Bosnians who fought with the Islamic State and Nusra Front in Syria and Iraq. Many observers contend that the United States remains a stakeholder in Bosnia's future because of its central role in resolving the conflict and shaping the postwar Bosnian state. Given the history of U.S. involvement in Bosnia, Bosnia's importance to regional stability in the Balkans, and concerns over Russian and Chinese influence in Bosnia, Members of Congress may be interested in monitoring how the country navigates its internal and external challenges. Congress may also consider future U.S. aid levels to Bosnia and the degree to which such assistance supports the long-standing U.S. policy objectives for Bosnia of territorial integrity, NATO and EU integration, energy security, and resilience against malign influence.