PUBLIC LAW 111-240 – SEPT. 27, 2010 

TITLE III--STATE SMALL BUSINESS CREDIT INITIATIVE 

SEC. 3001. SHORT TITLE. 

This title may be cited as the `State Small Business Credit Initiative Act of 

2010'. 

SEC. 3002. DEFINITIONS. 

In this title, the following definitions shall apply: 

(1) APPROPRIATE COMMITTEES OF CONGRESS- The term 

`appropriate committees of Congress' means-- 

(A) the Committee on Small Business and Entrepreneurship, 

the Committee on Agriculture, Nutrition, and Forestry, the 

Committee on Banking, Housing, and Urban Affairs, the 

Committee on Finance, the Committee on the Budget, and the 

Committee on Appropriations of the Senate; and 

(B) the Committee on Small Business, the Committee on 

Agriculture, the Committee on Financial Services, the 

Committee on Ways and Means, the Committee on the 

Budget, and the Committee on Appropriations of the House of 

Representatives. 

(2) APPROPRIATE FEDERAL BANKING AGENCY- The term 

`appropriate Federal banking agency'-- 

(A) has the same meaning as in section 3(q) of the Federal 

Deposit Insurance Act (12 U.S.C. 1813(q)); and 

(B) includes the National Credit Union Administration Board in 

the case of any credit union the deposits of which are insured 

in accordance with the Federal Credit Union Act. 

(3) ENROLLED LOAN- The term `enrolled loan' means a loan made 

by a financial institution lender that is enrolled by a participating 

State in an approved State capital access program in accordance 

with this title. 

(4) FEDERAL CONTRIBUTION- The term `Federal contribution' 

means the portion of the contribution made by a participating State 

to, or for the account of, an approved State program that is made 

with Federal funds allocated to the State by the Secretary under 

section 3003. 

(5) FINANCIAL INSTITUTION- The term `financial institution' means 

any insured depository institution, insured credit union, or 

community development financial institution, as those terms are 

each defined in section 103 of the Riegle Community Development 

and Regulatory Improvement Act of 1994 (12 U.S.C. 4702). 

(6) PARTICIPATING STATE- The term `participating State' means 

any State that has been approved for participation in the Program 

under section 3004. 
(7) PROGRAM- The term `Program' means the State Small Business 

Credit Initiative established under this title. 

(8) QUALIFYING LOAN OR SWAP FUNDING FACILITY- The term 

`qualifying loan or swap funding facility' means a contractual 

arrangement between a participating State and a private financial 

entity under which-- 

(A) the participating State delivers funds to the entity as 

collateral; 

(B) the entity provides funding from the arrangement back to 

the participating State; and 

(C) the full amount of resulting funding from the 

arrangement, less any fees and other costs of the 

arrangement, is contributed to, or for the account of, an 

approved State program. 

(9) RESERVE FUND- The term `reserve fund' means a fund, 

established by a participating State, dedicated to a particular 

financial institution lender, for the purposes of-- 

(A) depositing all required premium charges paid by the 

financial institution lender and by each borrower receiving a 

loan under an approved State program from that financial 

institution lender; 

(B) depositing contributions made by the participating State, 

including State contributions made with Federal contributions; 

and 

(C) covering losses on enrolled loans by disbursing 

accumulated funds. 

(10) STATE- The term `State' means-- 

(A) a State of the United States; 

(B) the District of Columbia, the Commonwealth of Puerto 

Rico, the Commonwealth of Northern Mariana Islands, Guam, 

American Samoa, and the United States Virgin Islands; 

(C) when designated by a State of the United States, a 

political subdivision of that State that the Secretary 

determines has the capacity to participate in the Program; 

and 

(D) under the circumstances described in section 3004(d), a 

municipality of a State of the United States to which the 

Secretary has given a special permission under section 

3004(d). 

(11) STATE CAPITAL ACCESS PROGRAM- The term `State capital 

access program' means a program of a State that-- 

(A) uses public resources to promote private access to credit; 

and 

(B) meets the eligibility criteria in section 3005(c). 

(12) STATE OTHER CREDIT SUPPORT PROGRAM- The term `State 

other credit support program'-- 

(A) means a program of a State that-- 
(i) uses public resources to promote private access to 

credit; 

(ii) is not a State capital access program; and 

(iii) meets the eligibility criteria in section 3006(c); and 

(B) includes, collateral support programs, loan participation 

programs, State-run venture capital fund programs, and credit 

guarantee programs. 

(13) STATE PROGRAM- The term `State program' means a State 

capital access program or a State other credit support program. 

(14) SECRETARY- The term `Secretary' means the Secretary of the 

Treasury. 

SEC. 3003. FEDERAL FUNDS ALLOCATED TO STATES. 

(a) Program Established; Purpose- There is established the State Small 

Business Credit Initiative, to be administered by the Secretary. Under the 

Program, the Secretary shall allocate Federal funds to participating States 

and make the allocated funds available to the participating States as 

provided in this section for the uses described in this section. 

(b) Allocation Formula- 

(1) IN GENERAL- Not later than 30 days after the date of enactment 

of this Act, the Secretary shall allocate Federal funds to participating 

States so that each State is eligible to receive an amount equal to 

the average of the respective amounts that the State-- 

(A) would receive under the 2009 allocation, as determined 

under paragraph (2); and 

(B) would receive under the 2010 allocation, as determined 

under paragraph (3). 

(2) 2009 ALLOCATION FORMULA- 

(A) IN GENERAL- The Secretary shall determine the 2009 

allocation by allocating Federal funds among the States in the 

proportion that each such State's 2008 State employment 

decline bears to the aggregate of the 2008 State employment 

declines for all States. 

(B) MINIMUM ALLOCATION- The Secretary shall adjust the 

allocations under subparagraph (A) for each State to the 

extent necessary to ensure that no State receives less than 

0.9 percent of the Federal funds. 

(C) 2008 STATE EMPLOYMENT DECLINE DEFINED- In this 

paragraph and with respect to a State, the term `2008 State 

employment decline' means the excess (if any) of-- 

(i) the number of individuals employed in such State 

determined for December 2007; over 

(ii) the number of individuals employed in such State 

determined for December 2008. 

(3) 2010 ALLOCATION FORMULA- 

(A) IN GENERAL- The Secretary shall determine the 2010 

allocation by allocating Federal funds among the States in the 
proportion that each such State's 2009 unemployment 

number bears to the aggregate of the 2009 unemployment 

numbers for all of the States. 

(B) MINIMUM ALLOCATION- The Secretary shall adjust the 

allocations under subparagraph (A) for each State to the 

extent necessary to ensure that no State receives less than 

0.9 percent of the Federal funds. 

(C) 2009 UNEMPLOYMENT NUMBER DEFINED- In this 

paragraph and with respect to a State, the term `2009 

unemployment number' means the number of individuals 

within such State who were determined to be unemployed by 

the Bureau of Labor Statistics for December 2009. 

(c) Availability of Allocated Amount- The amount allocated by the Secretary 

to each participating State under subsection (b) shall be made available to 

the State as follows: 

(1) ALLOCATED AMOUNT GENERALLY TO BE AVAILABLE TO STATE 

IN ONE-THIRDS- 

(A) IN GENERAL- The Secretary shall-- 

(i) apportion the participating State's allocated amount 

into thirds; 

(ii) transfer to the participating State the first 1/3 when 

the Secretary approves the State for participation under 

section 3004; and 

(iii) transfer to the participating State each successive 

1/3 when the State has certified to the Secretary that it 

has expended, transferred, or obligated 80 percent of 

the last transferred 1/3 for Federal contributions to, or 

for the account of, State programs. 

(B) AUTHORITY TO WITHHOLD PENDING AUDIT- The 

Secretary may withhold the transfer of any successive 1/3 

pending results of a financial audit. 

(C) INSPECTOR GENERAL AUDITS- 

(i) IN GENERAL- The Inspector General of the 

Department of the Treasury shall carry out an audit of 

the participating State's use of allocated Federal funds 

transferred to the State. 

(ii) RECOUPMENT OF MISUSED TRANSFERRED FUNDS 

REQUIRED- The allocation agreement between the 

Secretary and the participating State shall provide that 

the Secretary shall recoup any allocated Federal funds 

transferred to the participating State if the results of 

the an audit include a finding that there was an 

intentional or reckless misuse of transferred funds by 

the State. 

(iii) PENALTY FOR MISSTATEMENT- Any participating 

State that is found to have intentionally misstated any 

report issued to the Secretary under the Program shall 

be ineligible to receive any additional funds under the 
Program. Funds that had been allocated or that would 

otherwise have been allocated to such participating 

State shall be paid into the general fund of the Treasury 

for reduction of the public debt. 

(iv) MUNICIPALITIES- In this subparagraph, the term 

`participating State' shall include a municipality given 

special permission to participate in the Program, under 

section 3004(d). 

(D) EXCEPTION- The Secretary may, in the Secretary's 

discretion, transfer the full amount of the participating State's 

allocated amount to the State in a single transfer if the 

participating State applies to the Secretary for approval to use 

the full amount of the allocation as collateral for a qualifying 

loan or swap funding facility. 

(2) TRANSFERRED AMOUNTS- Each amount transferred to a 

participating State under this section shall remain available to the 

State until used by the State as permitted under paragraph (3). 

(3) USE OF TRANSFERRED FUNDS- Each participating State may use 

funds transferred to it under this section only-- 

(A) for making Federal contributions to, or for the account of, 

an approved State program; 

(B) as collateral for a qualifying loan or swap funding facility; 

(C) in the case of the first 1/3 transferred, for paying 

administrative costs incurred by the State in implementing an 

approved State program in an amount not to exceed 5 

percent of that first 1/3 ; or 

(D) in the case of each successive 1/3 transferred, for paying 

administrative costs incurred by the State in implementing an 

approved State program in an amount not to exceed 3 

percent of that successive 1/3 . 

(4) TERMINATION OF AVAILABILITY OF AMOUNTS NOT 

TRANSFERRED WITHIN 2 YEARS OF PARTICIPATION- Any portion of 

a participating State's allocated amount that has not been 

transferred to the State under this section by the end of the 2-year 

period beginning on the date that the Secretary approves the State 

for participation may be deemed by the Secretary to be no longer 

allocated to the State and no longer available to the State and shall 

be returned to the General Fund of the Treasury. 

(5) TRANSFERRED AMOUNTS NOT ASSISTANCE- The amounts 

transferred to a participating State under this section shall not be 

considered assistance for purposes of subtitle V of title 31, United 

States Code. 

(6) DEFINITIONS- In this section-- 

(A) the term `allocated amount' means the total amount of 

Federal funds allocated by the Secretary under subsection (b) 

to the participating State; and 

(B) the term ` 1/3 ' means-- 
(i) in the case of the first 1/3 and second 1/3 , an 

amount equal to 33 percent of a participating State's 

allocated amount; and 

(ii) in the case of the last 1/3 , an amount equal to 34 

percent of a participating State's allocated amount. 

SEC. 3004. APPROVING STATES FOR PARTICIPATION. 

(a) Application- Any State may apply to the Secretary for approval to be a 

participating State under the Program and to be eligible for an allocation of 

Federal funds under the Program. 

(b) General Approval Criteria- The Secretary shall approve a State to be a 

participating State, if-- 

(1) a specific department, agency, or political subdivision of the 

State has been designated to implement a State program and 

participate in the Program; 

(2) all legal actions necessary to enable such designated 

department, agency, or political subdivision to implement a State 

program and participate in the Program have been accomplished; 

(3) the State has filed an application with the Secretary for approval 

of a State capital access program under section 3005 or approval as 

a State other credit support program under section 3006, in each 

case within the time period provided in the respective section; and 

(4) the State and the Secretary have executed an allocation 

agreement that-- 

(A) conforms to the requirements of this title; 

(B) ensures that the State program complies with such 

national standards as are established by the Secretary under 

section 3009(a)(2); 

(C) sets forth internal control, compliance, and reporting 

requirements as established by the Secretary, and such other 

terms and conditions necessary to carry out the purposes of 

this title, including an agreement by the State to allow the 

Secretary to audit State programs; 

(D) requires that the State program be fully positioned, within 

90 days of the State's execution of the allocation agreement 

with the Secretary, to act on providing the kind of credit 

support that the State program was established to provide; 

and 

(E) includes an agreement by the State to deliver to the 

Secretary, and update annually, a schedule describing how 

the State intends to apportion among its State programs the 

Federal funds allocated to the State. 

(c) Contractual Arrangements for Implementation of State Programs- A 

State may be approved to be a participating State, and be eligible for an 

allocation of Federal funds under the Program, if the State has contractual 

arrangements for the implementation and administration of its State 

program with-- 
(1) an existing, approved State program administered by another 

State; or 

(2) an authorized agent of, or entity supervised by, the State, 

including for-profit and not-for-profit entities. 

(d) Special Permission- 

(1) CIRCUMSTANCES WHEN A MUNICIPALITY MAY APPLY DIRECTLYIf a State does not, within 60 days after the date of enactment of 

this Act, file with the Secretary a notice of its intent to apply for 

approval by the Secretary of a State program or within 9 months 

after the date of enactment of this Act, file with the Secretary a 

complete application for approval of a State program, the Secretary 

may grant to municipalities of that State a special permission that 

will allow them to apply directly to the Secretary without the State 

for approval to be participating municipalities. 

(2) TIMING REQUIREMENTS APPLICABLE TO MUNICIPALITIES 

APPLYING DIRECTLY- To qualify for the special permission, a 

municipality of a State shall be required, within 12 months after the 

date of enactment of this Act, to file with the Secretary a complete 

application for approval by the Secretary of a State program. 

(3) NOTICES OF INTENT AND APPLICATIONS FROM MORE THAN 1 

MUNICIPALITY- A municipality of a State may combine with 1 or 

more other municipalities of that State to file a joint notice of intent 

to file and a joint application. 

(4) APPROVAL CRITERIA- The general approval criteria in 

paragraphs (2) and (4) shall apply. 

(5) ALLOCATION TO MUNICIPALITIES- 

(A) IF MORE THAN 3- If more than 3 municipalities, or 

combination of municipalities as provided in paragraph (3), of 

a State apply for approval by the Secretary to be participating 

municipalities under this subsection, and the applications 

meet the approval criteria in paragraph (4), the Secretary 

shall allocate Federal funds to the 3 municipalities with the 

largest populations. 

(B) IF 3 OR FEWER- If 3 or fewer municipalities, or 

combination of municipalities as provided in paragraph (3), of 

a State apply for approval by the Secretary to be participating 

municipalities under this subsection, and the applications 

meet the approval criteria in paragraph (4), the Secretary 

shall allocate Federal funds to each applicant municipality or 

combination of municipalities. 

(6) APPORTIONMENT OF ALLOCATED AMOUNT AMONG 

PARTICIPATING MUNICIPALITIES- If the Secretary approves 

municipalities to be participating municipalities under this 

subsection, the Secretary shall apportion the full amount of the 

Federal funds that are allocated to that State to municipalities that 

are approved under this subsection in amounts proportionate to the 

population of those municipalities, based on the most recent 

available decennial census. 
(7) APPROVING STATE PROGRAMS FOR MUNICIPALITIES- If the 

Secretary approves municipalities to be participating municipalities 

under this subsection, the Secretary shall take into account the 

additional considerations in section 3006(d) in making the 

determination under section 3005 or 3006 that the State program or 

programs to be implemented by the participating municipalities, 

including a State capital access program, is eligible for Federal 

contributions to, or for the account of, the State program. 

3005. APPROVING STATE CAPITAL ACCESS PROGRAMS. 

(a) Application- A participating State that establishes a new, or has an 

existing, State capital access program that meets the eligibility criteria in 

subsection (c) may apply to Secretary to have the State capital access 

program approved as eligible for Federal contributions to the reserve fund. 

(b) Approval- The Secretary shall approve such State capital access 

program as eligible for Federal contributions to the reserve fund if-- 

(1) within 60 days after the date of enactment of this Act, the State 

has filed with the Secretary a notice of intent to apply for approval 

by the Secretary of a State capital access program; 

(2) within 9 months after the date of enactment of this Act, the 

State has filed with the Secretary a complete application for approval 

by the Secretary of a capital access program; 

(3) the State satisfies the requirements of subsections (a) and (b) of 

section 3004; and 

(4) the State capital access program meets the eligibility criteria in 

subsection (c). 

(c) Eligibility Criteria for State Capital Access Programs- For a State capital 

access program to be approved under this section, that program shall be 

required to be a program of the State that-- 

(1) provides portfolio insurance for business loans based on a 

separate loan-loss reserve fund for each financial institution; 

(2) requires insurance premiums to be paid by the financial 

institution lenders and by the business borrowers to the reserve fund 

to have their loans enrolled in the reserve fund; 

(3) provides for contributions to be made by the State to the reserve 

fund in amounts at least equal to the sum of the amount of the 

insurance premium charges paid by the borrower and the financial 

institution to the reserve fund for any newly enrolled loan; and 

(4) provides its portfolio insurance solely for loans that meet both 

the following requirements: 

(A) The borrower has 500 employees or less at the time that 

the loan is enrolled in the Program. 

(B) The loan amount does not exceed $5,000,000. 

(d) Federal Contributions to Approved State Capital Access Programs- A 

State capital access program approved under this section will be eligible for 
receiving Federal contributions to the reserve fund in an amount equal to 

the sum of the amount of the insurance premium charges paid by the 

borrowers and by the financial institution to the reserve fund for loans that 

meet the requirements in subsection (c)(4). A participating State may use 

the Federal contribution to make its contribution to the reserve fund of an 

approved State capital access program. 

(e) Minimum Program Requirements for State Capital Access ProgramsThe Secretary shall, by regulation or other guidance, prescribe Program 

requirements that meet the following minimum requirements: 

(1) EXPERIENCE AND CAPACITY- The participating State shall 

determine for each financial institution that participates in the State 

capital access program, after consultation with the appropriate 

Federal banking agency or, in the case of a financial institution that 

is a nondepository community development financial institution, the 

Community Development Financial Institution Fund, that the 

financial institution has sufficient commercial lending experience and 

financial and managerial capacity to participate in the approved 

State capital access program. The determination by the State shall 

not be reviewable by the Secretary. 

(2) INVESTMENT AUTHORITY- Subject to applicable State law, the 

participating State may invest, or cause to be invested, funds held in 

a reserve fund by establishing a deposit account at the financial 

institution lender in the name of the participating State. In the event 

that funds in the reserve fund are not deposited in such an account, 

such funds shall be invested in a form that the participating State 

determines is safe and liquid. 

(3) LOAN TERMS AND CONDITIONS TO BE DETERMINED BY 

AGREEMENT- A loan to be filed for enrollment in an approved State 

capital access program may be made with such interest rate, fees, 

and other terms and conditions, and the loan may be enrolled in the 

approved State capital access program and claims may be filed and 

paid, as agreed upon by the financial institution lender and the 

borrower, consistent with applicable law. 

(4) LENDER CAPITAL AT-RISK- A loan to be filed for enrollment in 

the State capital access program shall require the financial 

institution lender to have a meaningful amount of its own capital 

resources at risk in the loan. 

(5) PREMIUM CHARGES MINIMUM AND MAXIMUM AMOUNTS- The 

insurance premium charges payable to the reserve fund by the 

borrower and the financial institution lender shall be prescribed by 

the financial institution lender, within minimum and maximum limits 

that require that the sum of the insurance premium charges paid in 

connection with a loan by the borrower and the financial institution 

lender may not be less than 2 percent nor more than 7 percent of 

the amount of the loan enrolled in the approved State capital access 

program. 

(6) STATE CONTRIBUTIONS- In enrolling a loan in an approved 

State capital access program, the participating State may make a 
contribution to the reserve fund to supplement Federal contributions 

made under this Program. 

(7) LOAN PURPOSE- 

(A) PARTICULAR LOAN PURPOSE REQUIREMENTS AND 

PROHIBITIONS- In connection with the filing of a loan for 

enrollment in an approved State capital access program, the 

financial institution lender-- 

(i) shall obtain an assurance from each borrower that-- 

(I) the proceeds of the loan will be used for a 

business purpose; 

(II) the loan will not be used to finance such 

business activities as the Secretary, by 

regulation, may proscribe as prohibited loan 

purposes for enrollment in an approved State 

capital access program; and 

(III) the borrower is not-- 

(aa) an executive officer, director, or principal shareholder of the financial 

institution lender; 

(bb) a member of the immediate family of an executive officer, director, or principal 

shareholder of the financial institution lender; or 

(cc) a related interest of any such executive officer, director, principal shareholder, 

or member of the immediate family; 

(ii) shall provide assurances to the participating State 

that the loan has not been made in order to place under 

the protection of the approved State capital access 

program prior debt that is not covered under the 

approved State capital access program and that is or 

was owed by the borrower to the financial institution 

lender or to an affiliate of the financial institution 

lender; 

(iii) shall not allow the enrollment of a loan to a 

borrower that is a refinancing of a loan previously made 

to that borrower by the financial institution lender or an 

affiliate of the financial institution lender; and 

(iv) may include additional restrictions on the eligibility 

of loans or borrowers that are not inconsistent with the 

provisions and purposes of this title, including 

compliance with all applicable Federal and State laws, 

regulations, ordinances, and Executive orders. 

(B) DEFINITIONS- In this paragraph, the terms `executive 

officer', `director', `principal shareholder', `immediate 

family', and `related interest' refer to the same relationship to 

a financial institution lender as the relationship described in 
part 215 of title 12 of the Code of Federal Regulations, or any 

successor to such part. 

(8) CAPITAL ACCESS FOR SMALL BUSINESSES IN UNDERSERVED 

COMMUNITIES- At the time that a State applies to the Secretary to 

have the State capital access program approved as eligible for 

Federal contributions, the State shall deliver to the Secretary a 

report stating how the State plans to use the Federal contributions 

to the reserve fund to provide access to capital for small businesses 

in low- and moderate-income, minority, and other underserved 

communities, including women- and minority-owned small 

businesses. 

SEC. 3006. APPROVING COLLATERAL SUPPORT AND OTHER INNOVATIVE CREDIT 

ACCESS AND GUARANTEE INITIATIVES FOR SMALL BUSINESSES AND 

MANUFACTURERS. 

(a) Application- A participating State that establishes a new, or has an 

existing, credit support program that meets the eligibility criteria in 

subsection (c) may apply to the Secretary to have the State other credit 

support program approved as eligible for Federal contributions to, or for 

the account of, the State program. 

(b) Approval- The Secretary shall approve such State other credit support 

program as eligible for Federal contributions to, or for the account of, the 

program if-- 

(1) the Secretary determines that the State satisfies the 

requirements of paragraphs (1) through (3) of section 3005(b); 

(2) the Secretary determines that the State other credit support 

program meets the eligibility criteria in subsection (c); 

(3) the Secretary determines the State other credit support program 

to be eligible based on the additional considerations in subsection 

(d); and 

(4) within 9 months after the date of enactment of this Act, the 

State has filed with Treasury a complete application for Treasury 

approval. 

(c) Eligibility Criteria for State Other Credit Support Programs- For a State 

other credit support program to be approved under this section, that 

program shall be required to be a program of the State that-- 

(1) can demonstrate that, at a minimum, $1 of public investment by 

the State program will cause and result in $1 of new private credit; 

(2) can demonstrate a reasonable expectation that, when considered 

with all other State programs of the State, such State programs 

together have the ability to use amounts of new Federal 

contributions to, or for the account of, all such programs in the State 

to cause and result in amounts of new small business lending at 

least 10 times the new Federal contribution amount; 

(3) for those State other credit support programs that provide their 

credit support through 1 or more financial institution lenders, 

requires the financial institution lenders to have a meaningful 
amount of their own capital resources at risk in their small business 

lending; and 

(4) uses Federal funds allocated under this title to extend credit 

support that-- 

(A) targets an average borrower size of 500 employees or 

less; 

(B) does not extend credit support to borrowers that have 

more than 750 employees; 

(C) targets support towards loans with an average principal 

amount of $5,000,000 or less; and 

(D) does not extend credit support to loans that exceed a 

principal amount of $20,000,000. 

(d) Additional Considerations- In making a determination that a State other 

credit support program is eligible for Federal contributions to, or for the 

account of, the State program, the Secretary shall take into account the 

following additional considerations: 

(1) The anticipated benefits to the State, its businesses, and its 

residents to be derived from the Federal contributions to, or for the 

account of, the approved State other credit support program, 

including the extent to which resulting small business lending will 

expand economic opportunities. 

(2) The operational capacity, skills, and experience of the 

management team of the State other credit support program. 

(3) The capacity of the State other credit support program to 

manage increases in the volume of its small business lending. 

(4) The internal accounting and administrative controls systems of 

the State other credit support program, and the extent to which they 

can provide reasonable assurance that funds of the State program 

are safeguarded against waste, loss, unauthorized use, or 

misappropriation. 

(5) The soundness of the program design and implementation plan 

of the State other credit support program. 

(e) Federal Contributions to Approved State Other Credit Support 

Programs- A State other credit support program approved under this 

section will be eligible for receiving Federal contributions to, or for the 

account of, the State program in an amount consistent with the schedule 

describing the apportionment of allocated Federal funds among State 

programs delivered by the State to the Secretary under the allocation 

agreement. 

(f) Minimum Program Requirements for State Other Credit Support 

Programs- 

(1) FUND TO PRESCRIBE- The Secretary shall, by regulation or other 

guidance, prescribe Program requirements for approved State other 

credit support programs. 

(2) CONSIDERATIONS FOR FUND- In prescribing minimum Program 

requirements for approved State other credit support programs, the 

Secretary shall take into consideration, to the extent the Secretary 

determines applicable and appropriate, the minimum Program 
requirements for approved State capital access programs in section 

3005(e). 

SEC. 3007. REPORTS. 

(a) Quarterly Use-of-funds Report- 

(1) IN GENERAL- Not later than 30 days after the beginning of each 

calendar quarter, beginning after the first full calendar quarter to 

occur after the date the Secretary approves a State for participation, 

the participating State shall submit to the Secretary a report on the 

use of Federal funding by the participating State during the previous 

calendar quarter. 

(2) REPORT CONTENTS- Each report under this subsection shall-- 

(A) indicate the total amount of Federal funding used by the 

participating State; and 

(B) include a certification by the participating State that-- 

(i) the information provided in accordance with 

subparagraph (A) is accurate; 

(ii) funds continue to be available and legally committed 

to contributions by the State to, or for the account of, 

approved State programs, less any amount that has 

been contributed by the State to, or for the account of, 

approved State programs subsequent to the State 

being approved for participation in the Program; and 

(iii) the participating State is implementing its approved 

State program or programs in accordance with this title 

and regulations issued under section 3010. 

(b) Annual Report- Not later than March 31 of each year, beginning March 

31, 2011, each participating State shall submit to the Secretary an annual 

report that shall include the following information: 

(1) The number of borrowers that received new loans originated 

under the approved State program or programs after the State 

program was approved as eligible for Federal contributions. 

(2) The total amount of such new loans. 

(3) Breakdowns by industry type, loan size, annual sales, and 

number of employees of the borrowers that received such new loans. 

(4) The zip code of each borrower that received such a new loan. 

(5) Such other data as the Secretary, in the Secretary's sole 

discretion, may require to carry out the purposes of the Program. 

(c) Form- The reports and data filed under subsections (a) and (b) shall be 

in such form as the Secretary, in the Secretary's sole discretion, may 

require. 

(d) Termination of Reporting Requirements- The requirement to submit 

reports under subsections (a) and (b) shall terminate for a participating 

State with the submission of the completed reports due on the first March 

31 to occur after 5 complete 12-month periods after the State is approved 

by the Secretary to be a participating State. 
SEC. 3008. REMEDIES FOR STATE PROGRAM TERMINATION OR FAILURES. 

(a) Remedies- 

(1) IN GENERAL- If any of the events listed in paragraph (2) occur, 

the Secretary, in the Secretary's discretion, may-- 

(A) reduce the amount of Federal funds allocated to the State 

under the Program; or 

(B) terminate any further transfers of allocated amounts that 

have not yet been transferred to the State. 

(2) CAUSAL EVENTS- The events referred to in paragraph (1) are-- 

(A) termination by a participating State of its participation in 

the Program; 

(B) failure on the part of a participating State to submit 

complete reports under section 3007 on a timely basis; or 

(C) noncompliance by the State with the terms of the 

allocation agreement between the Secretary and the State. 

(b) Deallocated Amounts To Be Reallocated- If, after 13 months, any 

portion of the amount of Federal funds allocated to a participating State is 

deemed by the Secretary to be no longer allocated to the State after 

actions taken by the Secretary under subsection (a)(1), the Secretary shall 

reallocate that portion among the participating States, excluding the State 

whose allocated funds were deemed to be no longer allocated, as provided 

in section 3003(b). 

SEC. 3009. IMPLEMENTATION AND ADMINISTRATION. 

(a) General Authorities and Duties- The Secretary shall-- 

(1) consult with the Administrator of the Small Business 

Administration and the appropriate Federal banking agencies on the 

administration of the Program; 

(2) establish minimum national standards for approved State 

programs; 

(3) provide technical assistance to States for starting State 

programs and generally disseminate best practices; 

(4) manage, administer, and perform necessary program integrity 

functions for the Program; and 

(5) ensure adequate oversight of the approved State programs, 

including oversight of the cash flows, performance, and compliance 

of each approved State program. 

(b) Appropriations- There is hereby appropriated to the Secretary, out of 

funds in the Treasury not otherwise appropriated, $1,500,000,000 to carry 

out the Program, including to pay reasonable costs of administering the 

Program. 

(c) Termination of Secretary's Program Administration Functions- The 

authorities and duties of the Secretary to implement and administer the 

Program shall terminate at the end of the 7-year period beginning on the 

date of enactment of this Act. 
(d) Expedited Contracting- During the 1-year period beginning on the date 

of enactment of this Act, the Secretary may enter into contracts without 

regard to any other provision of law regarding public contracts, for 

purposes of carrying out this title. 

SEC. 3010. REGULATIONS. 

The Secretary, in consultation with the Administrator of the Small Business 

Administration, shall issue such regulations and other guidance as the 

Secretary determines necessary or appropriate to implement this title 

including to define terms, to establish compliance and reporting 

requirements, and such other terms and conditions necessary to carry out 

the purposes of this title. 

SEC. 3011. OVERSIGHT AND AUDITS. 

(a) Inspector General Oversight- The Inspector General of the Department 

of the Treasury shall conduct, supervise, and coordinate audits and 

investigations of the use of funds made available under the Program. 

(b) GAO Audit- The Comptroller General of the United States shall perform 

an annual audit of the Program and issue a report to the appropriate 

committees of Congress containing the results of such audit. 

(c) Required Certification- 

(1) FINANCIAL INSTITUTIONS CERTIFICATION- With respect to 

funds received by a participating State under the Program, any 

financial institution that receives a loan, a loan guarantee, or other 

financial assistance using such funds after the date of the enactment 

of this Act shall certify that such institution is in compliance with the 

requirements of section 103.121 of title 31, Code of Federal 

Regulations, a regulation that, at a minimum, requires financial 

institutions, as that term is defined in section 5312 (a)(2) and 

(c)(1)(A) of title 31, United States Code, to implement reasonable 

procedures to verify the identity of any person seeking to open an 

account, to the extent reasonable and practicable, maintain records 

of the information used to verify the person's identity, and 

determine whether the person appears on any lists of known or 

suspected terrorists or terrorist organizations provided to the 

financial institution by any government agency. 

(2) SEX OFFENSE CERTIFICATION- With respect to funds received by 

a participating State under the Program, any private entity that 

receives a loan, a loan guarantee, or other financial assistance using 

such funds after the date of the enactment of this Act shall certify to 

the participating State that the principals of such entity have not 

been convicted of a sex offense against a minor (as such terms are 

defined in section 111 of the Sex Offender Registration and 

Notification Act (42 U.S.C. 16911)). 

(d) Prohibition on Pornography- None of the funds made available under 

this title may be used to pay the salary of any individual engaged in 
activities related to the Program who has been officially disciplined for 

violations of subpart G of the Standards of Ethical Conduct for Employees 

of the Executive Branch for viewing, downloading, or exchanging 

pornography, including child pornography, on a Federal Government 

computer or while performing official Federal Government duties.