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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5297 Reported in House (RH)]

                                                 Union Calendar No. 283
111th CONGRESS
  2d Session
                                H. R. 5297

                          [Report No. 111-499]

    To create the Small Business Lending Fund Program to direct the 
   Secretary of the Treasury to make capital investments in eligible 
institutions in order to increase the availability of credit for small 
                  businesses, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 13, 2010

Mr. Frank of Massachusetts (for himself, Ms. Waters, Mrs. Maloney, Mr. 
 Gutierrez, Mr. Watt, Mr. Moore of Kansas, Mr. Hinojosa, Mr. Meeks of 
 New York, Mr. Miller of North Carolina, Mr. Scott of Georgia, Mr. Al 
  Green of Texas, Ms. Bean, Ms. Moore of Wisconsin, Mr. Ellison, Mr. 
  Klein of Florida, Mr. Perlmutter, Mr. Peters, Mr. Maffei, and Mrs. 
 Dahlkemper) introduced the following bill; which was referred to the 
                    Committee on Financial Services

                              May 27, 2010

             Additional sponsors: Ms. Norton and Ms. Clarke

                              May 27, 2010

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on May 13, 
                                 2010]

_______________________________________________________________________

                                 A BILL

 
    To create the Small Business Lending Fund Program to direct the 
   Secretary of the Treasury to make capital investments in eligible 
institutions in order to increase the availability of credit for small 
                  businesses, and for other purposes.

 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

                  TITLE I--SMALL BUSINESS LENDING FUND

SECTION 1. SHORT TITLE.

    This title may be cited as the ``Small Business Lending Fund Act of 
2010''.

SEC. 2. PURPOSE.

    The purpose of this title is 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.

SEC. 3. DEFINITIONS.

    For purposes of this title:
            (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'' has the meaning given 
        such term under section 3(q) of the Federal Deposit Insurance 
        Act (12 U.S.C. 1813(q)).
            (3) Bank holding company.--The term ``bank holding 
        company'' has the meaning given such term under section 2(a)(1) 
        of the Bank Holding Company Act of 1956 (12 U.S.C. 
        1841(2)(a)(1)).
            (4) Call report.--The term ``call report'' means--
                    (A) reports of Condition and Income submitted to 
                the Office of the Comptroller of the Currency, the 
                Board of Governors of the Federal Reserve System, and 
                the Federal Deposit Insurance Corporation;
                    (B) the Office of Thrift Supervision Thrift 
                Financial Report; and
                    (C) any report that is designated by the Office of 
                the Comptroller of the Currency, the Board of Governors 
                of the Federal Reserve System, the Federal Deposit 
                Insurance Corporation, or the Office of Thrift 
                Supervision, as applicable, as a successor to any 
                report referred to in subparagraph (A) or (B).
            (5) CDCI.--The term ``CDCI'' means the Community 
        Development Capital Initiative created by the Secretary under 
        the Troubled Asset Relief Program established by the Emergency 
        Economic Stabilization Act of 2008.
            (6) CDCI investment.--The term ``CDCI investment'' means, 
        with respect to any eligible institution, the principal amount 
        of any investment made by the Secretary in such eligible 
        institution under the CDCI that has not been repaid.
            (7) CPP.--The term ``CPP'' means the Capital Purchase 
        Program created by the Secretary under the Troubled Asset 
        Relief Program established by the Emergency Economic 
        Stabilization Act of 2008.
            (8) CPP investment.--The term ``CPP investment'' means, 
        with respect to any eligible institution, the principal amount 
        of any investment made by the Secretary in such eligible 
        institution under the CPP that has not been repaid.
            (9) Eligible institution.--The term ``eligible 
        institution'' means--
                    (A) any insured depository institution, which--
                            (i) is not controlled by a bank holding 
                        company or savings and loan holding company 
                        that is also an eligible institution;
                            (ii) has total assets of equal to or less 
                        than $10,000,000,000, as reported in the call 
                        report as of the end of the fourth quarter of 
                        calendar year 2009; and
                            (iii) is not directly or indirectly 
                        controlled by any company or other entity that 
                        has total consolidated assets of more than 
                        $10,000,000,000, as so reported;
                    (B) any bank holding company which has total assets 
                of equal to or less than $10,000,000,000; and
                    (C) any savings and loan holding company which has 
                total assets of equal to or less than $10,000,000,000.
            (10) Fund.--The term ``Fund'' means the Small Business 
        Lending Fund established by section 4(a)(1) of this title.
            (11) Insured depository institution.--The term ``insured 
        depository institution'' has the meaning given such term under 
        section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
        1813(c)(2)).
            (12) Program.--The term ``Program'' means the Small 
        Business Lending Fund Program authorized by section 4(a)(2) of 
        this title.
            (13) Savings and loan holding company.--The term ``savings 
        and loan holding company'' has the meaning given such term 
        under section 10(a)(1)(D) of the Home Owners' Loan Act (12 
        U.S.C. 1467a(a)(1)(D)).
            (14) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.
            (15) Small business lending.--
                    (A) In general.--The term ``small business 
                lending'' means small business lending, as defined by 
                and reported in an eligible institution's quarterly 
                call report, of the following types:
                            (i) Commercial and industrial loans plus.
                            (ii) Owner-occupied nonfarm, nonresidential 
                        real estate loans.
                            (iii) Loans to finance agricultural 
                        production and other loans to farmers.
                            (iv) Loans secured by farmland.
                    (B) Treatment of holding companies.--In the case of 
                eligible institutions that are bank holding companies 
                or savings and loan holding companies having one or 
                more insured depository institution subsidiaries, small 
                business lending shall be measured based on the 
                combined small business lending reported in the call 
                report of the insured depository institution 
                subsidiaries.
            (16) Minority-owned and women-owned business.--The terms 
        ``minority-owned business'' and ``women-owned business'' shall 
        have the meaning given the terms ``minority-owned business'' 
        and ``women's business'', respectively, under section 21A(r)(4) 
        of the Federal Home Loan Bank Act (12 U.S.C. 1441A(r)(4)).

SEC. 4. SMALL BUSINESS LENDING FUND.

    (a) Fund and Program.--
            (1) Fund established.--There is established in the Treasury 
        of the United States a fund to be known as the ``Small Business 
        Lending Fund'', which shall be administered by the Secretary.
            (2) Programs authorized.--The Secretary is authorized to 
        establish the Small Business Lending Fund Program for using the 
        Fund consistent with this title.
    (b) Use of Fund.--
            (1) In general.--Subject to paragraph (2), the Fund shall 
        be available to the Secretary, without further appropriation or 
        fiscal year limitation, for the costs of purchases (including 
        commitments to purchase), and modifications of such purchases, 
        of preferred stock and other financial instruments from 
        eligible institutions on such terms and conditions as are 
        determined by the Secretary in accordance with this title.
            (2) Maximum purchase limit.--The aggregate amount of 
        purchases (and commitments to purchase) made pursuant to 
        paragraph (1) may not exceed $30,000,000,000.
            (3) Proceeds used to pay down public debt.--All funds 
        received by the Secretary in connection with purchases made 
        pursuant to paragraph (1), 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.
    (c) Credits to the Fund.--There shall be credited to the Fund 
amounts made available pursuant to section 9, to the extent provided by 
appropriations Acts.
    (d) Terms.--
            (1) Application.--
                    (A) Institutions with assets of $1,000,000,000 or 
                less.--Eligible institutions having total assets equal 
                to or less than $1,000,000,000, as reported in a call 
                report as of the end of the fourth quarter of calendar 
                year 2009, may apply to receive a capital investment 
                from the Fund in an amount not exceeding 5 percent of 
                risk-weighted assets, as reported in the call report 
                immediately preceding the date of application, less the 
                amount of any CDCI investment and any CPP investment.
                    (B) Institutions with assets of more than 
                $1,000,000,000 and less than $10,000,000,000.--Eligible 
                institutions having total assets of more than 
                $1,000,000,000 but less than $10,000,000,000, as of the 
                end of the fourth quarter of calendar year 2009, may 
                apply to receive a capital investment from the Fund in 
                an amount not exceeding 3 percent of risk-weighted 
                assets, as reported in the call report immediately 
                preceding the date of application, less the amount of 
                any CDCI investment and any CPP investment.
                    (C) Treatment of holding companies.--In the case of 
                an eligible institution that is a bank holding company 
                or a savings and loan holding company having one or 
                more insured depository institution subsidiaries, total 
                assets shall be measured based on the combined total 
                assets reported in the call report of the insured 
                depository institution subsidiaries as of the end of 
                the fourth quarter of calendar year 2009 and risk-
                weighted assets shall be measured based on the combined 
                risk-weighted assets of the insured depository 
                institution subsidiaries as reported in the call report 
                immediately preceding the date of application.
                    (D) Treatment of applicants that are institutions 
                controlled by holding companies.--If an eligible 
                institution that applies to receive a capital 
                investment under the Program is under the control of a 
                bank holding company or a savings and loan holding 
                company, then the Secretary may use the Fund to 
                purchase preferred stock or other financial instruments 
                from the top-tier bank holding company or savings and 
                loan holding company of such eligible institution, as 
                applicable. For purposes of this paragraph, the term 
                ``control'' with respect to a bank holding company 
                shall have the same meaning as in section 2(a)(2) of 
                the Bank Holding Company Act of 1956 (12 U.S.C. 
                1841(2)(a)(2)). For purposes of this paragraph, the 
                term ``control'' with respect to a savings and loan 
                holding company shall have the same meaning as in 
                10(a)(2) of the Home Owners' Loan Act (12 U.S.C. 
                1467a(a)(2)).
                    (E) Requirement to provide a small business lending 
                plan.--At the time that an applicant submits an 
                application to the Secretary for a capital investment 
                under the Program, the applicant shall deliver to the 
                appropriate Federal banking agency a small business 
                lending plan describing how the applicant's business 
                strategy and operating goals will allow it to address 
                the needs of small businesses in the areas it serves. 
                This plan shall be confidential supervisory 
                information.
            (2) Consultation with regulators.--For each eligible 
        institution that applies to receive a capital investment under 
        the Program, the Secretary shall consult with the appropriate 
        Federal banking agency for the eligible institution to 
        determine whether the eligible institution may receive such 
        capital investment.
            (3) Ineligibility of institutions on fdic problem bank 
        list.--
                    (A) In general.--An eligible institution may not 
                receive any capital investment under the Program if--
                            (i) such institution is on the FDIC problem 
                        bank list; or
                            (ii) such institution has been removed from 
                        the FDIC problem bank list for less than 90 
                        days.
                    (B) FDIC problem bank list defined.--For purposes 
                of this subparagraph, the term ``FDIC problem bank 
                list'' means the list of institutions with a current 
                rating of 4 or 5 under the Uniform Financial 
                Institutions Rating System, or such other list 
                designated by the Federal Deposit Insurance 
                Corporation.
            (4) Incentives to lend.--
                    (A) Requirements on preferred stock and other 
                financial instruments.--Any preferred stock or other 
                financial instrument issued to Treasury by an eligible 
                institution receiving a capital investment under the 
                Program shall provide that--
                            (i) the rate at which dividends or interest 
                        are payable shall be 5 percent per annum 
                        initially;
                            (ii) within the first 2 years after the 
                        date of the capital investment under the 
                        Program, the rate may be adjusted based on the 
                        amount of an eligible institution's small 
                        business lending. Changes in the amount of 
                        small business lending shall be measured 
                        against the amount of small business lending 
                        reported by the eligible institution in its 
                        call report for the last quarter in calendar 
                        year 2009 or the average amount of small 
                        business lending reported by the eligible 
                        institution in all call reports for calendar 
                        year 2009, whichever is lower, minus 
                        adjustments from each quarterly balance in 
                        respect of--
                                    (I) net loan charge offs with 
                                respect to small business lending; and
                                    (II) gains realized by the eligible 
                                institution resulting from mergers, 
                                acquisitions or purchases of loans 
                                after origination and syndication; 
                                which adjustments shall be determined 
                                in accordance with guidance promulgated 
                                by the Secretary; and
                            (iii) during any calendar quarter during 
                        the initial 2-year period referred to in clause 
                        (ii), an institution's rate shall be adjusted 
                        to reflect the following schedule, based on 
                        that institution's change in the amount of 
                        small business lending relative to the 
                        baseline--
                                    (I) if the amount of small business 
                                lending has increased by less than 2.5 
                                percent, the dividend or interest rate 
                                shall be 5 percent;
                                    (II) if the amount of small 
                                business lending has increased by 2.5 
                                percent or greater, but by less than 
                                5.0 percent, the dividend or interest 
                                rate shall be 4 percent;
                                    (III) if the amount of small 
                                business lending has increased by 5.0 
                                percent or greater, but by less than 
                                7.5 percent, the dividend or interest 
                                rate shall be 3 percent;
                                    (IV) if the amount of small 
                                business lending has increased by 7.5 
                                percent or greater, and but by less 
                                than 10.0 percent, the dividend or 
                                interest rate shall be 2 percent; or
                                    (V) if the amount of small business 
                                lending has increased by 10 percent or 
                                greater, the dividend or interest rate 
                                shall be 1 percent.
                    (B) Basis of initial rate.--The initial dividend or 
                interest rate shall be based on call report data 
                published in the quarter immediately preceding the date 
                of the capital investment under the Program.
                    (C) Timing of rate adjustments.--Any rate 
                adjustment shall occur in the calendar quarter 
                following the publication of call report data, such 
                that the rate based on call report data from any one 
                calendar quarter, which is published in the first 
                following calendar quarter, shall be adjusted in that 
                first following calendar quarter and payable in the 
                second following quarter.
                    (D) Rate following initial 2-year period.--
                Generally, the rate based on call report data from the 
                eighth calendar quarter after the date of the capital 
                investment under the Program shall be payable until the 
                expiration of the 4\1/2\-year period that begins on the 
                date of the investment. In the case where the amount of 
                small business lending has remained the same or 
                decreased relative to the institution's baseline in the 
                eighth quarter after the date of the capital investment 
                under the Program, the rate shall be 7 percent until 
                the expiration of the 4\1/2\-year period that begins on 
                the date of the investment.
                    (E) Rate following initial 4\1/2\-year period.--The 
                dividend or interest rate paid on any preferred stock 
                or other financial instrument issued by an eligible 
                institution that receives a capital investment under 
                the Program shall increase to 9 percent at the end of 
                the 4\1/2\-year period that begins on the date of the 
                capital investment under the Program.
                    (F) Limitation on rate reductions with respect to 
                certain amount.--The reduction in the dividend or 
                interest rate payable to Treasury by any eligible 
                institution shall be limited such that the rate 
                reduction shall not apply to a dollar amount of the 
                investment made by Treasury that is greater than the 
                dollar amount increase in the amount of small business 
                lending realized under this program. The Secretary may 
                issue guidelines that will apply to new capital 
                investments limiting the amount of capital available to 
                eligible institutions consistent with this limitation.
                    (G) Rate adjustments for s corporation.--Before 
                making a capital investment in an eligible institution 
                that is an S corporation or a corporation organized on 
                a mutual basis, the Secretary may adjust the dividend 
                or interest rate on the financial instrument to be 
                issued to the Secretary, from the dividend or interest 
                rate that would apply under subparagraphs (A) through 
                (F), to take into account any differential tax 
                treatment of securities issued by such eligible 
                institution. For purpose of this subparagraph, the term 
                ``S corporation'' has the same meaning as in section 
                1361(a) of the Internal Revenue Code of 1986.
                    (H) Repayment deadline.--The capital investment 
                received by an eligible institution under the Program 
                shall be repaid by the end of the 10-year period that 
                begins on the date of the capital investment under the 
                Program.
            (5) Additional incentives to repay.--The Secretary may, by 
        regulation or guidance issued under section 5(9), establish 
        repayment incentives in addition to the incentive in paragraph 
        (4)(E) that will apply to new capital investments in a manner 
        that the Secretary determines to be consistent with the 
        purposes of this title.
            (6) Capital purchase program refinance.--
                    (A) In general.--The Secretary shall, in a manner 
                that the Secretary determines to be consistent with the 
                purposes of this title, issue regulations and other 
                guidance to permit eligible institutions to refinance 
                securities issued to Treasury under the CDCI and the 
                CPP for securities to be issued under the Program.
                    (B) Prohibition on participation by non-paying cpp 
                participants.--Subparagraph (A) shall not apply to any 
                eligible institution that has ever missed a dividend 
                payment due under the CPP.
            (7) Minority outreach.--The Secretary shall require 
        eligible institutions receiving capital investments under the 
        Program to provide outreach and advertising in the appropriate 
        language of the applicant pool describing the availability and 
        application process of receiving loans from the eligible 
        institution that are made possible by the Program through the 
        use of print, radio, television or electronic media outlets 
        which target organizations, trade associations, and individuals 
        that represent or work within or are members of minority 
        communities.
            (8) Additional terms.--The Secretary may, by regulation or 
        guidance issued under section 5(9), make modifications that 
        will apply to new capital investments in order to manage risks 
        associated with the administration of the Fund in a manner 
        consistent with the purposes of this title.
            (9) Minimum underwriting standards.--The appropriate 
        Federal banking agency for an eligible institution that 
        receives funds under the Program shall within 60 days issue 
        regulations defining minimum underwriting standards that must 
        be used for loans made by the eligible institution using such 
        funds.

SEC. 5. ADDITIONAL AUTHORITIES OF THE SECRETARY.

    The Secretary may take such actions as the Secretary deems 
necessary to carry out the authorities in this title, including, 
without limitation, the following:
            (1) The Secretary may use the services of any agency or 
        instrumentality of the United States or component thereof on a 
        reimbursable basis, and any such agency or instrumentality or 
        component thereof is authorized to provide services as 
        requested by the Secretary using all authorities vested in or 
        delegated to that agency, instrumentality, or component.
            (2) The Secretary may enter into contracts, including 
        contracts for services authorized by section 3109 of title 5, 
        United States Code.
            (3) The Secretary may designate any bank, savings 
        association, trust company, security broker or dealer, asset 
        manager, or investment adviser as a financial agent of the 
        Federal Government and such institution shall perform all such 
        reasonable duties related to this title as financial agent of 
        the Federal Government as may be required. The Secretary shall 
        have authority to amend existing agreements with financial 
        agents, entered into during the 2-year period before the date 
        of enactment of this title, to perform reasonable duties 
        related to this title.
            (4) The Secretary may exercise any rights received in 
        connection with any preferred stock or other financial 
        instruments or assets purchased or acquired pursuant to the 
        authorities granted under this title.
            (5) Subject to section 4(b)(3), the Secretary may manage 
        any assets purchased under this title, including revenues and 
        portfolio risks therefrom.
            (6) The Secretary may sell, dispose of, transfer, exchange 
        or enter into securities loans, repurchase transactions, or 
        other financial transactions in regard to, any preferred stock 
        or other financial instrument or asset purchased or acquired 
        under this title, upon terms and conditions and at a price 
        determined by the Secretary.
            (7) The Secretary may manage or prohibit conflicts of 
        interest that may arise in connection with the administration 
        and execution of the authorities provided under this title.
            (8) The Secretary may establish and use vehicles, subject 
        to supervision by the Secretary, to purchase, hold, and sell 
        preferred stock or other financial instruments and issue 
        obligations.
            (9) The Secretary may, in consultation with the 
        Administrator of the Small Business Administration, issue such 
        regulations and other guidance as may be necessary or 
        appropriate to define terms or carry out the authorities or 
        purposes of this title.

SEC. 6. CONSIDERATIONS.

    In exercising the authorities granted in this title, the Secretary 
shall take into consideration--
            (1) increasing the availability of credit for small 
        businesses;
            (2) providing funding to eligible institutions that serve 
        small businesses that are minority- and women-owned and that 
        also serve low- and moderate-income, minority, and other 
        underserved or rural communities;
            (3) protecting and increasing American jobs;
            (4) ensuring that all eligible institutions may apply to 
        participate in the program established under this title, 
        without discrimination based on geography;
            (5) providing transparency with respect to use of funds 
        provided under this title;
            (6) minimizing the cost to taxpayers of exercising the 
        authorities; and
            (7) promoting and engaging in financial education to would-
        be borrowers.

SEC. 7. REPORTS.

    The Secretary shall provide to the appropriate committees of 
Congress--
            (1) within 7 days of the end of each month commencing with 
        the first month in which transactions are made under the 
        Program, a written report describing all of the transactions 
        made during the reporting period pursuant to the authorities 
        granted under this title;
            (2) after the end of March and the end of September, 
        commencing September 30, 2010, a written report on all 
        projected costs and liabilities, all operating expenses, 
        including compensation for financial agents, and all 
        transactions made by the Fund, which shall include 
        participating institutions and amounts each institution has 
        received under the Program; and
            (3) within 7 days of the end of each month commencing with 
        the first month in which transactions are made under the 
        Program, a written report detailing how eligible institutions 
        participating in the Program have used the funds such 
        institutions received under the Program.

SEC. 8. 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 purchase (and commitments to purchase) 
of preferred stock and other financial instruments 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.

SEC. 9. CREDIT REFORM; FUNDING.

    (a) Credit Reform.--The cost of purchases of preferred stock and 
other financial instruments made as capital investments under this 
title shall be determined as provided under the Federal Credit Reform 
Act of 1990 (2 U.S.C. 661 et seq.).
    (b) Funds Made Available.--There are hereby authorized to be 
appropriated, out of funds in the Treasury not otherwise appropriated, 
such sums as may be necessary to pay the costs of $30,000,000,000 of 
capital investments in eligible institutions, including the costs of 
modifying such investments, and reasonable costs of administering the 
program of making, holding, managing, and selling the capital 
investments.

SEC. 10. TERMINATION AND CONTINUATION OF AUTHORITIES.

    (a) Termination of Investment Authority.--The authority to make 
capital investments in eligible institutions, including commitments to 
purchase preferred stock or other instruments, provided under this 
title shall terminate 1 year after the date of enactment of this title.
    (b) Continuation of Other Authorities.--The authorities of the 
Secretary in section 5 shall not be limited by the termination date in 
subsection (a).

SEC. 11. PRESERVATION OF AUTHORITY.

    Nothing in this title may be construed to limit the authority of 
the Secretary under any other provision of law.

SEC. 12. ASSURANCES.

    (a) Small Business Lending Fund Separate From TARP.--The Small 
Business Lending Fund Program is 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.
    (b) Change in Law.--If, after a capital investment has been made in 
an eligible institution under the Program, there is a change in law 
that modifies the terms of the investment or program in a materially 
adverse respect for the eligible institution, the eligible institution 
may, after consultation with the appropriate Federal banking agency for 
the eligible institution, repay the investment without impediment.

SEC. 13. STUDY AND REPORT WITH RESPECT TO WOMEN-OWNED AND MINORITY-
              OWNED BUSINESSES.

    (a) Study.--The Secretary shall conduct a study to determine the 
number of women-owned businesses and minority-owned businesses that 
receive assistance as a result of the Program, including--
            (1) efforts, including technical assistance and outreach 
        that institutions have employed under the Program to provide 
        loans to minority- and women-owned small businesses;
            (2) loan applications received;
            (3) loan applications approved; and
            (4) and any other relevant data related to such 
        transactions to promote the purposes of the Program as the 
        Secretary may require.
    (b) Report.--Not later than one year after the date of enactment of 
this Act, the Secretary shall submit to Congress a report on the 
results of the study conducted pursuant to subsection (a).
    (c) Information Provided to the Secretary.--Eligible institutions 
that participate in the Program shall provide the Secretary with such 
information as the Secretary may require to carry out the study 
required by this section.

            TITLE II--STATE SMALL BUSINESS CREDIT INITIATIVE

SEC. 201. SHORT TITLE.

    This title may be cited as the ``State Small Business Credit 
Initiative Act of 2010''.

SEC. 202. DEFINITIONS.

    For purposes of this title, the following definitions shall apply:
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency''--
                    (A) has the same meaning as in section 3 of the 
                Federal Deposit Insurance Act; 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.
            (2) 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.
            (3) 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 203.
            (4) 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.
            (5) Participating state.--The term ``participating State'' 
        means any State that has been approved for participation in the 
        Program under section 204.
            (6) Program.--The term ``Program'' means the State Small 
        Business Credit Initiative established under this title.
            (7) 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.
            (8) 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.
            (9) 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 
                204(d), a municipality of a State of the United States 
                to which the Secretary has given a special permission 
                under section 204(d).
            (10) 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 
                205(c).
            (11) 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 206(c); and
                    (B) includes, collateral support programs, loan 
                participation programs, and credit guarantee programs.
            (12) State program.--The term ``State program'' means a 
        State capital access program or a State other credit support 
        program.
            (13) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 203. FEDERAL FUNDS ALLOCATED TO STATES.

    (a) Program Established; Purpose.--There is established the State 
Small Business Credit Initiative (hereinafter in this title referred to 
as the ``Program''), 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 title, 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.--For 
                purposes of 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.--For purposes 
                of 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 one-thirds;
                            (ii) transfer to the participating State 
                        the first one-third when the Secretary approves 
                        the State for participation under section 204; 
                        and
                            (iii) transfer to the participating State 
                        each successive one-third when the State has 
                        certified to the Secretary that it has 
                        expended, transferred, or obligated 80 percent 
                        of the last transferred one-third 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 
                one-third pending results of a financial audit.
                    (C) Transfers contingent on inspector general 
                audits.--
                            (i) In general.--Before a transfer to a 
                        participating State of the second one-third or 
                        the last one-third, the Inspector General of 
                        the Department of the Treasury shall carry out 
                        an audit of the participating State's use of 
                        amounts already received.
                            (ii) 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.
                            (iii) Municipalities.--For purposes of this 
                        subparagraph, the term ``participating State'' 
                        shall include a municipality given special 
                        permission to participate in the Program, 
                        pursuant to section 204(d).
            (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 one-third 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 one-third; or
                    (D) in the case of each successive one-third 
                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 
                one-third.
            (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) Definitions.--For purposes of 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 ``one-third'' means--
                            (i) in the case of the first and second 
                        one-thirds, an amount equal to 33 percent of a 
                        participating State's allocated amount; and
                            (ii) in the case of the last one-third, an 
                        amount equal to 34 percent of a participating 
                        State's allocated amount.

SEC. 204. 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 
        205 or approval as a State other credit support program under 
        section 206, 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 209(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 directly.--
        If a State does not, within 60 days after the date of enactment 
        of this title, 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 title, 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 must, within 12 months after the date 
        of enactment of this title, 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 206(d) in 
        making the determination under section 205 or 206 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.

SEC. 205. 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 
        title, 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 
        title, 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 204; 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, it must 
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 
Programs.--The 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 non depository 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 must 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.--For purposes of this subsection, 
                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.

SEC. 206. 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 205(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 
        title, 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, it must be a program of the State that--
            (1) can demonstrate that, at a minimum, 1 dollar of public 
        investment by the State program will cause and result in 1 
        dollar 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) extends 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 205(e).

SEC. 207. 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.--The report shall--
                    (A) indicate the total amount of Federal funding 
                used by the participating State;
                    (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 pursuant to section 210.
    (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 pursuant to 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. 208. 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 207 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 203(b).

SEC. 209. 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) Authorization of Appropriations.--There are authorized to be 
appropriated to the Secretary, out of funds in the Treasury not 
otherwise appropriated, $2,000,000,000 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 title.

SEC. 210. 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, but not limited to, 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. 211. 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, as such term is defined under 
section 3(1), containing the results of such audit.
                                                 Union Calendar No. 283

111th CONGRESS

  2d Session

                               H. R. 5297

                          [Report No. 111-499]

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                                 A BILL

    To create the Small Business Lending Fund Program to direct the 
   Secretary of the Treasury to make capital investments in eligible 
institutions in order to increase the availability of credit for small 
                  businesses, and for other purposes.

_______________________________________________________________________

                              May 27, 2010

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
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