H. R. 5297 

One Hundred Eleventh Congress 

of the 

United States of America 

AT THE SECOND SESSION 

Begun and held at the City of Washington on Tuesday, 

the fifth day of January, two thousand and ten 

An Act 

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, to amend the Internal 

Revenue Code of 1986 to provide tax incentives for small business job creation, 

and for other purposes. 

Be it enacted by the Senate and House of Representatives of 

the United States of America in Congress assembled, 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Small Business Jobs Act of 

2010’’. 

SEC. 2. TABLE OF CONTENTS. 

The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—SMALL BUSINESSES 

Sec. 1001. Definitions. 

Subtitle A—Small Business Access to Credit 

Sec. 1101. Short title. 

PART I—NEXT STEPS FOR MAIN STREET CREDIT AVAILABILITY

Sec. 1111. Section 7(a) business loans. 

Sec. 1112. Maximum loan amounts under 504 program. 

Sec. 1113. Maximum loan limits under microloan program. 

Sec. 1114. Loan guarantee enhancement extensions. 

Sec. 1115. New Markets Venture Capital company investment limitations. 

Sec. 1116. Alternative size standards. 

Sec. 1117. Sale of 7(a) loans in secondary market. 

Sec. 1118. Online lending platform. 

Sec. 1119. SBA Secondary Market Guarantee Authority. 

PART II—SMALL BUSINESS ACCESS TO CAPITAL

Sec. 1122. Low-interest refinancing under the local development business loan program. 

PART III—OTHER MATTERS

Sec. 1131. Small business intermediary lending pilot program. 

Sec. 1132. Public policy goals. 

Sec. 1133. Floor plan pilot program extension. 

Sec. 1134. Guarantees for bonds and notes issued for community or economic development purposes. 

Sec. 1135. Temporary express loan enhancement. 

Sec. 1136. Prohibition on using TARP funds or tax increases. 

Subtitle B—Small Business Trade and Exporting 

Sec. 1201. Short title. 

Sec. 1202. Definitions. 
H. R. 5297—2 

Sec. 1203. Office of International Trade. 

Sec. 1204. Duties of the Office of International Trade. 

Sec. 1205. Export assistance centers. 

Sec. 1206. International trade finance programs. 

Sec. 1207. State Trade and Export Promotion Grant Program. 

Sec. 1208. Rural export promotion. 

Sec. 1209. International trade cooperation by small business development centers. 

Subtitle C—Small Business Contracting 

PART I—CONTRACT BUNDLING

Sec. 1311. Small Business Act. 

Sec. 1312. Leadership and oversight. 

Sec. 1313. Consolidation of contract requirements. 

Sec. 1314. Small business teams pilot program. 

PART II—SUBCONTRACTING INTEGRITY

Sec. 1321. Subcontracting misrepresentations. 

Sec. 1322. Small business subcontracting improvements. 

PART III—ACQUISITION PROCESS

Sec. 1331. Reservation of prime contract awards for small businesses. 

Sec. 1332. Micro-purchase guidelines. 

Sec. 1333. Agency accountability. 

Sec. 1334. Payment of subcontractors. 

Sec. 1335. Repeal of Small Business Competitiveness Demonstration Program. 

PART IV—SMALL BUSINESS SIZE AND STATUS INTEGRITY

Sec. 1341. Policy and presumptions. 

Sec. 1342. Annual certification. 

Sec. 1343. Training for contracting and enforcement personnel. 

Sec. 1344. Updated size standards. 

Sec. 1345. Study and report on the mentor-protege program. 

Sec. 1346. Contracting goals reports. 

Sec. 1347. Small business contracting parity. 

Subtitle D—Small Business Management and Counseling Assistance 

Sec. 1401. Matching requirements under small business programs. 

Sec. 1402. Grants for SBDCs. 

Subtitle E—Disaster Loan Improvement 

Sec. 1501. Aquaculture business disaster assistance. 

Subtitle F—Small Business Regulatory Relief 

Sec. 1601. Requirements providing for more detailed analyses. 

Sec. 1602. Office of advocacy. 

Subtitle G—Appropriations Provisions 

Sec. 1701. Salaries and expenses. 

Sec. 1702. Business loans program account. 

Sec. 1703. Community Development Financial Institutions Fund program account. 

Sec. 1704. Small business loan guarantee enhancement extensions. 

TITLE II—TAX PROVISIONS 

Sec. 2001. Short title. 

Subtitle A—Small Business Relief 

PART I—PROVIDING ACCESS TO CAPITAL

Sec. 2011. Temporary exclusion of 100 percent of gain on certain small business 

stock. 

Sec. 2012. General business credits of eligible small businesses for 2010 carried 

back 5 years. 

Sec. 2013. General business credits of eligible small businesses in 2010 not subject 

to alternative minimum tax. 

Sec. 2014. Temporary reduction in recognition period for built-in gains tax. 

PART II—ENCOURAGING INVESTMENT

Sec. 2021. Increased expensing limitations for 2010 and 2011; certain real property 

treated as section 179 property. 
H. R. 5297—3 

Sec. 2022. Additional first-year depreciation for 50 percent of the basis of certain 

qualified property. 

Sec. 2023. Special rule for long-term contract accounting. 

PART III—PROMOTING ENTREPRENEURSHIP

Sec. 2031. Increase in amount allowed as deduction for start-up expenditures in 

2010. 

Sec. 2032. Authorization of appropriations for the United States Trade Representative to develop market access opportunities for United States small- and 

medium-sized businesses and to enforce trade agreements. 

PART IV—PROMOTING SMALL BUSINESS FAIRNESS

Sec. 2041. Limitation on penalty for failure to disclose reportable transactions 

based on resulting tax benefits. 

Sec. 2042. Deduction for health insurance costs in computing self-employment 

taxes in 2010. 

Sec. 2043. Removal of cellular telephones and similar telecommunications equipment from listed property. 

Subtitle B—Revenue Provisions 

PART I—REDUCING THE TAX GAP

Sec. 2101. Information reporting for rental property expense payments. 

Sec. 2102. Increase in information return penalties. 

Sec. 2103. Report on tax shelter penalties and certain other enforcement actions. 

Sec. 2104. Application of continuous levy to tax liabilities of certain Federal contractors. 

PART II—PROMOTING RETIREMENT PREPARATION

Sec. 2111. Participants in government section 457 plans allowed to treat elective 

deferrals as Roth contributions. 

Sec. 2112. Rollovers from elective deferral plans to designated Roth accounts. 

Sec. 2113. Special rules for annuities received from only a portion of a contract. 

PART III—CLOSING UNINTENDED LOOPHOLES

Sec. 2121. Crude tall oil ineligible for cellulosic biofuel producer credit. 

Sec. 2122. Source rules for income on guarantees. 

PART IV—TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES

Sec. 2131. Time for payment of corporate estimated taxes. 

TITLE III—STATE SMALL BUSINESS CREDIT INITIATIVE 

Sec. 3001. Short title. 

Sec. 3002. Definitions. 

Sec. 3003. Federal funds allocated to States. 

Sec. 3004. Approving States for participation. 

Sec. 3005. Approving State capital access programs. 

Sec. 3006. Approving collateral support and other innovative credit access and 

guarantee initiatives for small businesses and manufacturers. 

Sec. 3007. Reports. 

Sec. 3008. Remedies for State program termination or failures. 

Sec. 3009. Implementation and administration. 

Sec. 3010. Regulations. 

Sec. 3011. Oversight and audits. 

TITLE IV—ADDITIONAL SMALL BUSINESS PROVISIONS 

Subtitle A—Small Business Lending Fund 

Sec. 4101. Purpose. 

Sec. 4102. Definitions. 

Sec. 4103. Small business lending fund. 

Sec. 4104. Additional authorities of the Secretary. 

Sec. 4105. Considerations. 

Sec. 4106. Reports. 

Sec. 4107. Oversight and audits. 

Sec. 4108. Credit reform; funding. 

Sec. 4109. Termination and continuation of authorities. 

Sec. 4110. Preservation of authority. 

Sec. 4111. Assurances. 

Sec. 4112. Study and report with respect to women-owned, veteran-owned, and minority-owned businesses. 
H. R. 5297—4 

Sec. 4113. Sense of Congress. 

Subtitle B—Other Provisions 

PART I—SMALL BUSINESS EXPORT PROMOTION INITIATIVES

Sec. 4221. Short title. 

Sec. 4222. Global business development and promotion activities of the Department 

of Commerce. 

Sec. 4223. Additional funding to improve access to global markets for rural businesses. Sec. 4224. Additional funding for the ExporTech program. 

Sec. 4225. Additional funding for the market development cooperator program of 

the Department of Commerce. Sec. 4226. Hollings Manufacturing Partnership Program; Technology Innovation 

Program. Sec. 4227. Sense of the Senate concerning Federal collaboration with States on export promotion issues. Sec. 4228. Report on tariff and nontariff barriers. 

PART II—MEDICARE FRAUD

Sec. 4241. Use of predictive modeling and other analytics technologies to identify 

and prevent waste, fraud, and abuse in the Medicare fee-for-service program. 

TITLE V—BUDGETARY PROVISIONS 

Sec. 5001. Determination of budgetary effects. 

TITLE I—SMALL BUSINESSES 

SEC. 1001. DEFINITIONS. 

In this title— 

(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ mean 

the Small Business Administration and the Administrator 

thereof, respectively; and 

(2) the term ‘‘small business concern’’ has the meaning 

given that term under section 3 of the Small Business Act 

(15 U.S.C. 632). 

Subtitle A—Small Business Access to 

Credit 

SEC. 1101. SHORT TITLE. 

This subtitle may be cited as the ‘‘Small Business Job Creation 

and Access to Capital Act of 2010’’. 

PART I—NEXT STEPS FOR MAIN STREET 

CREDIT AVAILABILITY 

SEC. 1111. SECTION 7(a) BUSINESS LOANS. 

(a) AMENDMENT.—Section 7(a) of the Small Business Act (15 

U.S.C. 636(a)) is amended— 

(1) in paragraph (2)(A)— 

(A) in clause (i), by striking ‘‘75 percent’’ and inserting 

‘‘90 percent’’; and 

(B) in clause (ii), by striking ‘‘85 percent’’ and inserting 

‘‘90 percent’’; and 

(2) in paragraph (3)(A), by striking ‘‘$1,500,000 (or if the 

gross loan amount would exceed $2,000,000’’ and inserting 

‘‘$4,500,000 (or if the gross loan amount would exceed 

$5,000,000’’. 
H. R. 5297—5 

(b) PROSPECTIVE REPEAL.—Effective January 1, 2011, section 

7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended— 

(1) in paragraph (2)(A)— 

(A) in clause (i), by striking ‘‘90 percent’’ and inserting 

‘‘75 percent’’; and 

(B) in clause (ii), by striking ‘‘90 percent’’ and inserting 

‘‘85 percent’’; and 

(2) in paragraph (3)(A), by striking ‘‘$4,500,000’’ and 

inserting ‘‘$3,750,000’’. 

SEC. 1112. MAXIMUM LOAN AMOUNTS UNDER 504 PROGRAM. 

Section 502(2)(A) of the Small Business Investment Act of 

1958 (15 U.S.C. 696(2)(A)) is amended— 

(1) in clause (i), by striking ‘‘$1,500,000’’ and inserting 

‘‘$5,000,000’’; 

(2) in clause (ii), by striking ‘‘$2,000,000’’ and inserting 

‘‘$5,000,000’’; 

(3) in clause (iii), by striking ‘‘$4,000,000’’ and inserting 

‘‘$5,500,000’’; 

(4) in clause (iv), by striking ‘‘$4,000,000’’ and inserting 

‘‘$5,500,000’’; and 

(5) in clause (v), by striking ‘‘$4,000,000’’ and inserting 

‘‘$5,500,000’’. 

SEC. 1113. MAXIMUM LOAN LIMITS UNDER MICROLOAN PROGRAM. 

Section 7(m) of the Small Business Act (15 U.S.C. 636(m)) 

is amended— 

(1) in paragraph (1)(B)(iii), by striking ‘‘$35,000’’ and 

inserting ‘‘$50,000’’; 

(2) in paragraph (3)— 

(A) in subparagraph (C), by striking ‘‘$3,500,000’’ and 

inserting ‘‘$5,000,000’’; and 

(B) in subparagraph (E), by striking ‘‘$35,000’’ each 

place that term appears and inserting ‘‘$50,000’’; and 

(3) in paragraph (11)(B), by striking ‘‘$35,000’’ and inserting 

‘‘$50,000’’. 

SEC. 1114. LOAN GUARANTEE ENHANCEMENT EXTENSIONS. 

(a) FEES.—Section 501 of the American Recovery and Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 151) is amended 

by striking ‘‘September 30, 2010’’ each place that term appears 

and inserting ‘‘December 31, 2010’’. 

(b) LOAN GUARANTEES.—Section 502(f) of division A of the 

American Recovery and Reinvestment Act of 2009 (Public Law 

111–5; 123 Stat. 153) is amended by striking ‘‘May 31, 2010’’ and 

inserting ‘‘December 31, 2010’’. 

SEC. 1115. NEW MARKETS VENTURE CAPITAL COMPANY INVESTMENT 

LIMITATIONS. 

Section 355 of the Small Business Investment Act of 1958 

(15 U.S.C. 689d) is amended by adding at the end the following: 

‘‘(e) INVESTMENT LIMITATIONS.— ‘‘(1) DEFINITION.—In this subsection, the term ‘covered New 

Markets Venture Capital company’ means a New Markets Venture Capital company— 

‘‘(A) granted final approval by the Administrator under 

section 354(e) on or after March 1, 2002; and 
H. R. 5297—6 

‘‘(B) that has obtained a financing from the Administrator. 

‘‘(2) LIMITATION.—Except to the extent approved by the 

Administrator, a covered New Markets Venture Capital company may not acquire or issue commitments for securities under 

this title for any single enterprise in an aggregate amount 

equal to more than 10 percent of the sum of— 

‘‘(A) the regulatory capital of the covered New Markets 

Venture Capital company; and 

‘‘(B) the total amount of leverage projected in the 

participation agreement of the covered New Markets Venture Capital.’’. 

SEC. 1116. ALTERNATIVE SIZE STANDARDS. 

Section 3(a) of the Small Business Act (15 U.S.C. 632(a)) is 

amended by adding at the end the following: 

‘‘(5) ALTERNATIVE SIZE STANDARD.— ‘‘(A) IN GENERAL.—The Administrator shall establish an 

alternative size standard for applicants for business loans under 

section 7(a) and applicants for development company loans 

under title V of the Small Business Investment Act of 1958 

(15 U.S.C. 695 et seq.), that uses maximum tangible net worth 

and average net income as an alternative to the use of industry 

standards. 

‘‘(B) INTERIM RULE.—Until the date on which the alternative size standard established under subparagraph (A) is 

in effect, an applicant for a business loan under section 7(a) 

or an applicant for a development company loan under title 

V of the Small Business Investment Act of 1958 may be eligible 

for such a loan if— 

‘‘(i) the maximum tangible net worth of the applicant is not more than $15,000,000; and 

‘‘(ii) the average net income after Federal income taxes 

(excluding any carry-over losses) of the applicant for the 

2 full fiscal years before the date of the application is 

not more than $5,000,000.’’. 

SEC. 1117. SALE OF 7(a) LOANS IN SECONDARY MARKET. 

Section 5(g) of the Small Business Act (15 U.S.C. 634(g)) is 

amended by adding at the end the following: 

‘‘(6) If the amount of the guaranteed portion of any loan under 

section 7(a) is more than $500,000, the Administrator shall, upon 

request of a pool assembler, divide the loan guarantee into increments of $500,000 and 1 increment of any remaining amount less 

than $500,000, in order to permit the maximum amount of any 

loan in a pool to be not more than $500,000. Only 1 increment 

of any loan guarantee divided under this paragraph may be included 

in the same pool. Increments of loan guarantees to different borrowers that are divided under this paragraph may be included 

in the same pool.’’. 

SEC. 1118. ONLINE LENDING PLATFORM. 

It is the sense of Congress that the Administrator of the Small 

Business Administration should establish a website that— 

(1) lists each lender that makes loans guaranteed by the 

Small Business Administration and provides information about 

the loan rates of each such lender; and 
H. R. 5297—7 

(2) allows prospective borrowers to compare rates on loans 

guaranteed by the Small Business Administration. 

SEC. 1119. SBA SECONDARY MARKET GUARANTEE AUTHORITY. 

Section 503(f) of division A of the American Recovery and 

Reinvestment Act of 2009 (Public Law 111–5; 123 Stat. 155) is 

amended by striking ‘‘on the date 2 years after the date of enactment of this section’’ and inserting ‘‘2 years after the date of 

the first sale of a pool of first lien position 504 loans guaranteed 

under this section to a third-party investor’’. 

PART II—SMALL BUSINESS ACCESS TO 

CAPITAL 

SEC. 1122. LOW-INTEREST REFINANCING UNDER THE LOCAL DEVELOPMENT BUSINESS LOAN PROGRAM. 

(a) REFINANCING.—Section 502(7) of the Small Business Investment Act of 1958 (15 U.S.C. 696(7)) is amended by adding at 

the end the following: 

‘‘(C) REFINANCING NOT INVOLVING EXPANSIONS.— ‘‘(i) DEFINITIONS.—In this subparagraph— 

‘‘(I) the term ‘borrower’ means a small business 

concern that submits an application to a development company for financing under this subparagraph; 

‘‘(II) the term ‘eligible fixed asset’ means tangible property relating to which the Administrator 

may provide financing under this section; and 

‘‘(III) the term ‘qualified debt’ means indebtedness— 

‘‘(aa) that— 

‘‘(AA) was incurred not less than 2 

years before the date of the application 

for assistance under this subparagraph; 

‘‘(BB) is a commercial loan; 

‘‘(CC) is not subject to a guarantee 

by a Federal agency; 

‘‘(DD) the proceeds of which were used 

to acquire an eligible fixed asset; 

‘‘(EE) was incurred for the benefit of 

the small business concern; and 

‘‘(FF) is collateralized by eligible fixed 

assets; and 

‘‘(bb) for which the borrower has been current on all payments for not less than 1 year 

before the date of the application. 

‘‘(ii) AUTHORITY.—A project that does not involve 

the expansion of a small business concern may include 

the refinancing of qualified debt if— 

‘‘(I) the amount of the financing is not more 

than 90 percent of the value of the collateral for 

the financing, except that, if the appraised value 

of the eligible fixed assets serving as collateral 

for the financing is less than the amount equal 

to 125 percent of the amount of the financing, 

the borrower may provide additional cash or other 

collateral to eliminate any deficiency; 
H. R. 5297—8 

‘‘(II) the borrower has been in operation for 

all of the 2-year period ending on the date of 

the loan; and 

‘‘(III) for a financing for which the Administrator determines there will be an additional cost 

attributable to the refinancing of the qualified 

debt, the borrower agrees to pay a fee in an amount 

equal to the anticipated additional cost. 

‘‘(iii) FINANCING FOR BUSINESS EXPENSES.— 

‘‘(I) FINANCING FOR BUSINESS EXPENSES.—The 

Administrator may provide financing to a borrower 

that receives financing that includes a refinancing 

of qualified debt under clause (ii), in addition to 

the refinancing under clause (ii), to be used solely 

for the payment of business expenses. 

‘‘(II) APPLICATION FOR FINANCING.—An 

application for financing under subclause (I) shall 

include— 

‘‘(aa) a specific description of the expenses 

for which the additional financing is 

requested; and 

‘‘(bb) an itemization of the amount of each 

expense. 

‘‘(III) CONDITION ON ADDITIONAL FINANCING.— 

A borrower may not use any part of the financing 

under this clause for non-business purposes. 

‘‘(iv) LOANS BASED ON JOBS.— ‘‘(I) JOB CREATION AND RETENTION GOALS.— ‘‘(aa) IN GENERAL.—The Administrator 

may provide financing under this subparagraph for a borrower that meets the job creation goals under subsection (d) or (e) of section 501. 

‘‘(bb) ALTERNATE JOB RETENTION GOAL.— The Administrator may provide financing 

under this subparagraph to a borrower that 

does not meet the goals described in item (aa) 

in an amount that is not more than the 

product obtained by multiplying the number 

of employees of the borrower by $65,000. 

‘‘(II) NUMBER OF EMPLOYEES.—For purposes 

of subclause (I), the number of employees of a 

borrower is equal to the sum of— 

‘‘(aa) the number of full-time employees 

of the borrower on the date on which the borrower applies for a loan under this subparagraph; and 

‘‘(bb) the product obtained by multiplying— 

‘‘(AA) the number of part-time 

employees of the borrower on the date 

on which the borrower applies for a loan 

under this subparagraph; by 

‘‘(BB) the quotient obtained by 

dividing the average number of hours each 

part time employee of the borrower works 

each week by 40. 
H. R. 5297—9 

‘‘(v) NONDELEGATION.—Notwithstanding section 

508(e), the Administrator may not permit a premier 

certified lender to approve or disapprove an application 

for assistance under this subparagraph. 

‘‘(vi) TOTAL AMOUNT OF LOANS.—The Administrator 

may provide not more than a total of $7,500,000,000 

of financing under this subparagraph for each fiscal 

year.’’. 

(b) PROSPECTIVE REPEAL.—Effective 2 years after the date of 

enactment of this Act, section 502(7) of the Small Business Investment Act of 1958 (15 U.S.C. 696(7)) is amended by striking subparagraph (C). 

(c) TECHNICAL CORRECTION.—Section 502(2)(A)(i) of the Small 

Business Investment Act of 1958 (15 U.S.C. 696(2)(A)(i)) is amended 

by striking ‘‘subparagraph (B) or (C)’’ and inserting ‘‘clause (ii), 

(iii), (iv), or (v)’’. 

PART III—OTHER MATTERS 

SEC. 1131. SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM. 

(a) IN GENERAL.—Section 7 of the Small Business Act (15 

U.S.C. 636) is amended by striking subsection (l) and inserting 

the following: 

‘‘(l) SMALL BUSINESS INTERMEDIARY LENDING PILOT PROGRAM.— 

‘‘(1) DEFINITIONS.—In this subsection— 

‘‘(A) the term ‘eligible intermediary’— 

‘‘(i) means a private, nonprofit entity that— 

‘‘(I) seeks or has been awarded a loan from 

the Administrator to make loans to small business 

concerns under this subsection; and 

‘‘(II) has not less than 1 year of experience 

making loans to startup, newly established, or 

growing small business concerns; and 

‘‘(ii) includes— 

‘‘(I) a private, nonprofit community development corporation; 

‘‘(II) a consortium of private, nonprofit 

organizations or nonprofit community development 

corporations; and 

‘‘(III) an agency of or nonprofit entity established by a Native American Tribal Government; 

and 

‘‘(B) the term ‘Program’ means the small business intermediary lending pilot program established under paragraph 

(2). 

‘‘(2) ESTABLISHMENT.—There is established a 3-year small 

business intermediary lending pilot program, under which the 

Administrator may make direct loans to eligible intermediaries, 

for the purpose of making loans to startup, newly established, 

and growing small business concerns. 

‘‘(3) PURPOSES.—The purposes of the Program are— 

‘‘(A) to assist small business concerns in areas suffering 

from a lack of credit due to poor economic conditions or 

changes in the financial market; and 

‘‘(B) to establish a loan program under which the 

Administrator may provide loans to eligible intermediaries 
H. R. 5297—10 

to enable the eligible intermediaries to provide loans to 

startup, newly established, and growing small business 

concerns for working capital, real estate, or the acquisition 

of materials, supplies, or equipment. 

‘‘(4) LOANS TO ELIGIBLE INTERMEDIARIES.— 

‘‘(A) APPLICATION.—Each eligible intermediary desiring 

a loan under this subsection shall submit an application 

to the Administrator that describes— 

‘‘(i) the type of small business concerns to be 

assisted; 

‘‘(ii) the size and range of loans to be made; 

‘‘(iii) the interest rate and terms of loans to be 

made; 

‘‘(iv) the geographic area to be served and the 

economic, poverty, and unemployment characteristics 

of the area; 

‘‘(v) the status of small business concerns in the 

area to be served and an analysis of the availability 

of credit; and 

‘‘(vi) the qualifications of the applicant to carry 

out this subsection. 

‘‘(B) LOAN LIMITS.—No loan may be made to an eligible 

intermediary under this subsection if the total amount 

outstanding and committed to the eligible intermediary 

by the Administrator would, as a result of such loan, exceed 

$1,000,000 during the participation of the eligible intermediary in the Program. 

‘‘(C) LOAN DURATION.—Loans made by the Administrator under this subsection shall be for a term of 20 

years. 

‘‘(D) APPLICABLE INTEREST RATES.—Loans made by the 

Administrator to an eligible intermediary under the Program shall bear an annual interest rate equal to 1.00 

percent. 

‘‘(E) FEES; COLLATERAL.—The Administrator may not 

charge any fees or require collateral with respect to any 

loan made to an eligible intermediary under this subsection. 

‘‘(F) DELAYED PAYMENTS.—The Administrator shall not 

require the repayment of principal or interest on a loan 

made to an eligible intermediary under the Program during 

the 2-year period beginning on the date of the initial 

disbursement of funds under that loan. 

‘‘(G) MAXIMUM PARTICIPANTS AND AMOUNTS.—During 

each of fiscal years 2011, 2012, and 2013, the Administrator 

may make loans under the Program— 

‘‘(i) to not more than 20 eligible intermediaries; 

and 

‘‘(ii) in a total amount of not more than 

$20,000,000. 

‘‘(5) LOANS TO SMALL BUSINESS CONCERNS.— 

‘‘(A) IN GENERAL.—The Administrator, through an 

eligible intermediary, shall make loans to startup, newly 

established, and growing small business concerns for 

working capital, real estate, and the acquisition of materials, supplies, furniture, fixtures, and equipment. 
H. R. 5297—11 

‘‘(B) MAXIMUM LOAN.—An eligible intermediary may 

not make a loan under this subsection of more than 

$200,000 to any 1 small business concern. 

‘‘(C) APPLICABLE INTEREST RATES.—A loan made by 

an eligible intermediary to a small business concern under 

this subsection, may have a fixed or a variable interest 

rate, and shall bear an interest rate specified by the eligible 

intermediary in the application of the eligible intermediary 

for a loan under this subsection. 

‘‘(D) REVIEW RESTRICTIONS.—The Administrator may 

not review individual loans made by an eligible intermediary to a small business concern before approval of 

the loan by the eligible intermediary. 

‘‘(6) TERMINATION.—The authority of the Administrator to 

make loans under the Program shall terminate 3 years after 

the date of enactment of the Small Business Job Creation 

and Access to Capital Act of 2010.’’. 

(b) RULEMAKING AUTHORITY.—Not later than 180 days after 

the date of enactment of this Act, the Administrator shall issue 

regulations to carry out section 7(l) of the Small Business Act, 

as amended by subsection (a). 

(c) AVAILABILITY OF FUNDS.—Any amounts provided to the 

Administrator for the purposes of carrying out section 7(l) of the 

Small Business Act, as amended by subsection (a), shall remain 

available until expended. 

SEC. 1132. PUBLIC POLICY GOALS. 

Section 501(d)(3) of the Small Business Investment Act of 1958 

(15 U.S.C. 695(d)(3)) is amended— 

(1) in subparagraph (J), by striking ‘‘or’’ at the end; 

(2) in subparagraph (K), by striking the period at the 

end and inserting ‘‘, or’’; and 

(3) by adding at the end the following: 

‘‘(L) reduction of rates of unemployment in labor surplus areas, as such areas are determined by the Secretary 

of Labor.’’. 

SEC. 1133. FLOOR PLAN PILOT PROGRAM EXTENSION. 

(a) IN GENERAL.—Section 7(a) of the Small Business Act (15 

U.S.C. 636(a)) is amended— 

(1) by redesignating paragraph (32), relating to increased 

veteran participation, as added by section 208 of the Military 

Reservist and Veteran Small Business Reauthorization and 

Opportunity Act of 2008 (Public Law 110–186; 122 Stat. 631), 

as paragraph (33); and 

(2) by adding at the end the following: 

‘‘(34) FLOOR PLAN FINANCING PROGRAM.— ‘‘(A) DEFINITION.—In this paragraph, the term ‘eligible 

retail good’— 

‘‘(i) means a good for which a title may be obtained 

under State law; and 

‘‘(ii) includes an automobile, recreational vehicle, 

boat, and manufactured home. 

‘‘(B) PROGRAM.—The Administrator may guarantee the 

timely payment of an open-end extension of credit to a 

small business concern, the proceeds of which may be used 

for the purchase of eligible retail goods for resale. 
H. R. 5297—12 

‘‘(C) AMOUNT.—An open-end extension of credit guaranteed under this paragraph shall be in an amount not less 

than $500,000 and not more than $5,000,000. 

‘‘(D) TERM.—An open-end extension of credit guaranteed under this paragraph shall have a term of not more 

than 5 years. 

‘‘(E) GUARANTEE PERCENTAGE.—The Administrator 

may guarantee— 

‘‘(i) not less than 60 percent of an open-end extension of credit under this paragraph; and 

‘‘(ii) not more than 75 percent of an open-end 

extension of credit under this paragraph. 

‘‘(F) ADVANCE RATE.—The lender for an open-end extension of credit guaranteed under this paragraph may allow 

the borrower to draw funds on the line of credit in an 

amount equal to not more than 100 percent of the value 

of the eligible retail goods to be purchased.’’. 

(b) SUNSET.—Effective September 30, 2013, section 7(a) of the 

Small Business Act (15 U.S.C. 636(a)) is amended— 

(1) by striking paragraph (34); and 

(2) by redesignating paragraph (35), as added by section 

1206 of this Act, as paragraph (34). 

SEC. 1134. GUARANTEES FOR BONDS AND NOTES ISSUED FOR COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES. 

The Riegle Community Development and Regulatory Improvement Act of 1994 (12 U.S.C. 4701 et seq.) is amended by inserting 

after section 114 (12 U.S.C. 4713) the following: 

‘‘SEC. 114A. GUARANTEES FOR BONDS AND NOTES ISSUED FOR 

COMMUNITY OR ECONOMIC DEVELOPMENT PURPOSES. 

‘‘(a) DEFINITIONS.—In this section, the following definitions 

shall apply: 

‘‘(1) ELIGIBLE COMMUNITY DEVELOPMENT FINANCIAL

INSTITUTION.—The term ‘eligible community development financial institution’ means a community development financial 

institution (as described in section 1805.201 of title 12, Code 

of Federal Regulations, or any successor thereto) certified by 

the Secretary that has applied to a qualified issuer for, or 

been granted by a qualified issuer, a loan under the Program. 

‘‘(2) ELIGIBLE COMMUNITY OR ECONOMIC DEVELOPMENT PUR- POSE.—The term ‘eligible community or economic development 

purpose’— 

‘‘(A) means any purpose described in section 108(b); 

and 

‘‘(B) includes the provision of community or economic 

development in low-income or underserved rural areas. 

‘‘(3) GUARANTEE.—The term ‘guarantee’ means a written 

agreement between the Secretary and a qualified issuer (or 

trustee), pursuant to which the Secretary ensures repayment 

of the verifiable losses of principal, interest, and call premium, 

if any, on notes or bonds issued by a qualified issuer to finance 

or refinance loans to eligible community development financial 

institutions. 

‘‘(4) LOAN.—The term ‘loan’ means any credit instrument 

that is extended under the Program for any eligible community 

or economic development purpose. 

‘‘(5) MASTER SERVICER.— 
H. R. 5297—13 

‘‘(A) IN GENERAL.—The term ‘master servicer’ means 

any entity approved by the Secretary in accordance with 

subparagraph (B) to oversee the activities of servicers, as 

provided in subsection (f)(4). 

‘‘(B) APPROVAL CRITERIA FOR MASTER SERVICERS.—The 

Secretary shall approve or deny any application to become 

a master servicer under the Program not later than 90 

days after the date on which all required information is 

submitted to the Secretary, based on the capacity and 

experience of the applicant in— 

‘‘(i) loan administration, servicing, and loan monitoring; 

‘‘(ii) managing regional or national loan intake, 

processing, or servicing operational systems and infrastructure; 

‘‘(iii) managing regional or national originator 

communication systems and infrastructure; 

‘‘(iv) developing and implementing training and 

other risk management strategies on a regional or 

national basis; and 

‘‘(v) compliance monitoring, investor relations, and 

reporting. 

‘‘(6) PROGRAM.—The term ‘Program’ means the guarantee 

Program for bonds and notes issued for eligible community 

or economic development purposes established under this section. 

‘‘(7) PROGRAM ADMINISTRATOR.—The term ‘Program 

administrator’ means an entity designated by the issuer to 

perform administrative duties, as provided in subsection (f)(2). 

‘‘(8) QUALIFIED ISSUER.— 

‘‘(A) IN GENERAL.—The term ‘qualified issuer’ means 

a community development financial institution (or any 

entity designated to issue notes or bonds on behalf of 

such community development financial institution) that 

meets the qualification requirements of this paragraph. 

‘‘(B) APPROVAL CRITERIA FOR QUALIFIED ISSUERS.— 

‘‘(i) IN GENERAL.—The Secretary shall approve a 

qualified issuer for a guarantee under the Program 

in accordance with the requirements of this paragraph, 

and such additional requirements as the Secretary may 

establish, by regulation. 

‘‘(ii) TERMS AND QUALIFICATIONS.—A qualified 

issuer shall— 

‘‘(I) have appropriate expertise, capacity, and 

experience, or otherwise be qualified to make loans 

for eligible community or economic development 

purposes; 

‘‘(II) provide to the Secretary— 

‘‘(aa) an acceptable statement of the proposed sources and uses of the funds; and 

‘‘(bb) a capital distribution plan that meets 

the requirements of subsection (c)(1); and 

‘‘(III) certify to the Secretary that the bonds 

or notes to be guaranteed are to be used for eligible 

community or economic development purposes. 

‘‘(C) DEPARTMENT OPINION; TIMING.— 
H. R. 5297—14 

‘‘(i) DEPARTMENT OPINION.—Not later than 30 days 

after the date of a request by a qualified issuer for 

approval of a guarantee under the Program, the Secretary shall provide an opinion regarding compliance 

by the issuer with the requirements of the Program 

under this section. 

‘‘(ii) TIMING.—The Secretary shall approve or deny 

a guarantee under this section after consideration of 

the opinion provided to the Secretary under clause 

(i), and in no case later than 90 days after receipt 

of all required information by the Secretary with 

respect to a request for such guarantee. 

‘‘(9) SECRETARY.—The term ‘Secretary’ means the Secretary 

of the Treasury. 

‘‘(10) SERVICER.—The term ‘servicer’ means an entity designated by the issuer to perform various servicing duties, as 

provided in subsection (f)(3). 

‘‘(b) GUARANTEES AUTHORIZED.—The Secretary shall guarantee 

payments on bonds or notes issued by any qualified issuer, if 

the proceeds of the bonds or notes are used in accordance with 

this section to make loans to eligible community development financial institutions— 

‘‘(1) for eligible community or economic development purposes; or 

‘‘(2) to refinance loans or notes issued for such purposes. 

‘‘(c) GENERAL PROGRAM REQUIREMENTS.— 

‘‘(1) IN GENERAL.—A capital distribution plan meets the 

requirements of this subsection, if not less than 90 percent 

of the principal amount of guaranteed bonds or notes (other 

than costs of issuance fees) are used to make loans for any 

eligible community or economic development purpose, measured 

annually, beginning at the end of the 1-year period beginning 

on the issuance date of such guaranteed bonds or notes. 

‘‘(2) RELENDING ACCOUNT.—Not more than 10 percent of 

the principal amount of guaranteed bonds or notes, multiplied 

by an amount equal to the outstanding principal balance of 

issued notes or bonds, minus the risk-share pool amount under 

subsection (d), may be held in a relending account and may 

be made available for new eligible community or economic 

development purposes. 

‘‘(3) LIMITATIONS ON UNPAID PRINCIPAL BALANCES.—The 

proceeds of guaranteed bonds or notes under the Program may 

not be used to pay fees (other than costs of issuance fees), 

and shall be held in— 

‘‘(A) community or economic development loans; 

‘‘(B) a relending account, to the extent authorized 

under paragraph (2); or 

‘‘(C) a risk-share pool established under subsection (d). 

‘‘(4) REPAYMENT.—If a qualified issuer fails to meet the 

requirements of paragraph (1) by the end of the 90-day period 

beginning at the end of the annual measurement period, repayment shall be made on that portion of bonds or notes necessary 

to bring the bonds or notes that remain outstanding after 

such repayment into compliance with the 90 percent requirement of paragraph (1). 

‘‘(5) PROHIBITED USES.—The Secretary shall, by regulation— 
H. R. 5297—15 

‘‘(A) prohibit, as appropriate, certain uses of amounts 

from the guarantee of a bond or note under the Program, 

including the use of such funds for political activities, lobbying, outreach, counseling services, or travel expenses; 

and 

‘‘(B) provide that the guarantee of a bond or note 

under the Program may not be used for salaries or other 

administrative costs of— 

‘‘(i) the qualified issuer; or 

‘‘(ii) any recipient of amounts from the guarantee 

of a bond or note. 

‘‘(d) RISK-SHARE POOL.—Each qualified issuer shall, during the 

term of a guarantee provided under the Program, establish a riskshare pool, capitalized by contributions from eligible community 

development financial institution participants an amount equal to 

3 percent of the guaranteed amount outstanding on the subject 

notes and bonds. 

‘‘(e) GUARANTEES.— 

‘‘(1) IN GENERAL.—A guarantee issued under the Program 

shall— 

‘‘(A) be for the full amount of a bond or note, including 

the amount of principal, interest, and call premiums; 

‘‘(B) be fully assignable and transferable to the capital 

market, on terms and conditions that are consistent with 

comparable Government-guaranteed bonds, and satisfactory to the Secretary; 

‘‘(C) represent the full faith and credit of the United 

States; and 

‘‘(D) not exceed 30 years. 

‘‘(2) LIMITATIONS.— 

‘‘(A) ANNUAL NUMBER OF GUARANTEES.—The Secretary 

shall issue not more than 10 guarantees in any calendar 

year under the Program. 

‘‘(B) GUARANTEE AMOUNT.—The Secretary may not 

guarantee any amount under the Program equal to less 

than $100,000,000, but the total of all such guarantees 

in any fiscal year may not exceed $1,000,000,000. 

‘‘(f) SERVICING OF TRANSACTIONS.— 

‘‘(1) IN GENERAL.—To maximize efficiencies and minimize 

cost and interest rates, loans made under this section may 

be serviced by qualified Program administrators, bond servicers, 

and a master servicer. 

‘‘(2) DUTIES OF PROGRAM ADMINISTRATOR.—The duties of 

a Program administrator shall include— 

‘‘(A) approving and qualifying eligible community 

development financial institution applications for participation in the Program; 

‘‘(B) compliance monitoring; 

‘‘(C) bond packaging in connection with the Program; 

and 

‘‘(D) all other duties and related services that are customarily expected of a Program administrator. 

‘‘(3) DUTIES OF SERVICER.—The duties of a servicer shall 

include— 

‘‘(A) billing and collecting loan payments; 

‘‘(B) initiating collection activities on past-due loans; 
H. R. 5297—16 

‘‘(C) transferring loan payments to the master servicing 

accounts; 

‘‘(D) loan administration and servicing; 

‘‘(E) systematic and timely reporting of loan performance through remittance and servicing reports; 

‘‘(F) proper measurement of annual outstanding loan 

requirements; and 

‘‘(G) all other duties and related services that are customarily expected of servicers. 

‘‘(4) DUTIES OF MASTER SERVICER.—The duties of a master 

servicer shall include— 

‘‘(A) tracking the movement of funds between the 

accounts of the master servicer and any other servicer; 

‘‘(B) ensuring orderly receipt of the monthly remittance 

and servicing reports of the servicer; 

‘‘(C) monitoring the collection comments and foreclosure actions; 

‘‘(D) aggregating the reporting and distribution of funds 

to trustees and investors; 

‘‘(E) removing and replacing a servicer, as necessary; 

‘‘(F) loan administration and servicing; 

‘‘(G) systematic and timely reporting of loan performance compiled from all bond servicers’ reports; 

‘‘(H) proper distribution of funds to investors; and 

‘‘(I) all other duties and related services that are customarily expected of a master servicer. 

‘‘(g) FEES.— 

‘‘(1) IN GENERAL.—A qualified issuer that receives a guarantee issued under this section on a bond or note shall pay 

a fee to the Secretary, in an amount equal to 10 basis points 

of the amount of the unpaid principal of the bond or note 

guaranteed. 

‘‘(2) PAYMENT.—A qualified issuer shall pay the fee required 

under this subsection on an annual basis. 

‘‘(3) USE OF FEES.—Fees collected by the Secretary under 

this subsection shall be used to reimburse the Department 

of the Treasury for any administrative costs incurred by the 

Department in implementing the Program established under 

this section. 

‘‘(h) AUTHORIZATION OF APPROPRIATIONS.— 

‘‘(1) IN GENERAL.—There are authorized to be appropriated 

to the Secretary, such sums as are necessary to carry out 

this section. 

‘‘(2) USE OF FEES.—To the extent that the amount of funds 

appropriated for a fiscal year under paragraph (1) are not 

sufficient to carry out this section, the Secretary may use 

the fees collected under subsection (g) for the cost of providing 

guarantees of bonds and notes under this section. 

‘‘(i) INVESTMENT IN GUARANTEED BONDS INELIGIBLE FOR

COMMUNITY REINVESTMENT ACT PURPOSES.—Notwithstanding any 

other provision of law, any investment by a financial institution 

in bonds or notes guaranteed under the Program shall not be 

taken into account in assessing the record of such institution for 

purposes of the Community Reinvestment Act of 1977 (12 U.S.C. 

2901). 

‘‘(j) ADMINISTRATION.— 
H. R. 5297—17 

‘‘(1) REGULATIONS.—Not later than 1 year after the date 

of enactment of this section, the Secretary shall promulgate 

regulations to carry out this section. 

‘‘(2) IMPLEMENTATION.—Not later than 2 years after the 

date of enactment of this section, the Secretary shall implement 

this section. 

‘‘(k) TERMINATION.—This section is repealed, and the authority 

provided under this section shall terminate, on September 30, 

2014.’’. 

SEC. 1135. TEMPORARY EXPRESS LOAN ENHANCEMENT. 

(a) IN GENERAL.—Section 7(a)(31)(D) of the Small Business 

Act (15 U.S.C. 636(a)(31)(D)) is amended by striking ‘‘$350,000’’ 

and inserting ‘‘$1,000,000’’. 

(b) PROSPECTIVE REPEAL.—Effective 1 year after the date of 

enactment of this Act, section 7(a)(31)(D) of the Small Business 

Act (15 U.S.C. 636(a)(31)(D)) is amended by striking ‘‘$1,000,000’’ 

and inserting ‘‘$350,000’’. 

SEC. 1136. PROHIBITION ON USING TARP FUNDS OR TAX INCREASES. 

(a) IN GENERAL.—Except as provided in subsection (b), nothing 

in section 1111, 1112, 1113, 1114, 1115, 1116, 1117, 1118, 1122, 

or 1131, or an amendment made by such sections, shall be construed 

to limit the ability of Congress to appropriate funds. 

(b) TARP FUNDS AND TAX INCREASES.— 

(1) IN GENERAL.—Any covered amounts may not be used 

to carry out section 1111, 1112, 1113, 1114, 1115, 1116, 1117, 

1118, 1122, or 1131, or an amendment made by such sections. 

(2) DEFINITION.—In this subsection, the term ‘‘covered 

amounts’’ means— 

(A) the amounts made available to the Secretary of 

the Treasury under title I of the Emergency Economic 

Stabilization Act of 2008 S.C. 5201 et seq.) to purchase 

(under section 101) or guarantee (under section 102) assets 

under that Act; and 

(B) any revenue increase attributable to any amendment to the Internal Revenue Code of 1986 made during 

the period beginning on the date of enactment of this 

Act and ending on December 31, 2010. 

Subtitle B—Small Business Trade and 

Exporting 

SEC. 1201. SHORT TITLE. 

This subtitle may be cited as the ‘‘Small Business Export 

Enhancement and International Trade Act of 2010’’. 

SEC. 1202. DEFINITIONS. 

(a) DEFINITIONS.—In this subtitle— 

(1) the term ‘‘Associate Administrator’’ means the Associate 

Administrator for International Trade appointed under section 

22(a)(2) of the Small Business Act, as amended by this subtitle; 

(2) the term ‘‘Export Assistance Center’’ means a onestop shop referred to in section 2301(b)(8) of the Omnibus 

Trade and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8)); 

and 
H. R. 5297—18 

(3) the term ‘‘rural small business concern’’ means a small 

business concern located in a rural area, as that term is defined 

in section 1393(a)(2) of the Internal Revenue Code of 1986. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.— (1) DEFINITIONS.—Section 3 of the Small Business Act (15 

U.S.C. 632) is amended by adding at the end the following: 

‘‘(t) SMALL BUSINESS DEVELOPMENT CENTER.—In this Act, the 

term ‘small business development center’ means a small business 

development center described in section 21. 

‘‘(u) REGION OF THE ADMINISTRATION.—In this Act, the term 

‘region of the Administration’ means the geographic area served 

by a regional office of the Administration established under section 

4(a).’’. 

(2) CONFORMING AMENDMENT.—Section 4(b)(3)(B)(x) of the 

Small Business Act (15 U.S.C. 633(b)(3)(B)(x)) is amended by 

striking ‘‘Administration district and region’’ and inserting ‘‘district and region of the Administration’’. 

SEC. 1203. OFFICE OF INTERNATIONAL TRADE. 

(a) ESTABLISHMENT.—Section 22 of the Small Business Act 

(15 U.S.C. 649) is amended— 

(1) by striking ‘‘SEC. 22. (a) There’’ and inserting the following: 

‘‘SEC. 22. OFFICE OF INTERNATIONAL TRADE. 

‘‘(a) ESTABLISHMENT.— ‘‘(1) OFFICE.—There’’; and 

(2) in subsection (a)— 

(A) in paragraph (1), as so designated, by striking 

the period and inserting ‘‘for the primary purposes of 

increasing— 

‘‘(A) the number of small business concerns that export; 

and 

‘‘(B) the volume of exports by small business concerns.’’; 

and 

(B) by adding at the end the following: 

‘‘(2) ASSOCIATE ADMINISTRATOR.—The head of the Office 

shall be the Associate Administrator for International Trade, 

who shall be responsible to the Administrator.’’. 

(b) AUTHORITY FOR ADDITIONAL ASSOCIATE ADMINISTRATOR.— Section 4(b)(1) of the Small Business Act (15 U.S.C. 633(b)(1)) 

is amended— 

(1) in the fifth sentence, by striking ‘‘five Associate 

Administrators’’ and inserting ‘‘Associate Administrators’’; and 

(2) by adding at the end the following: ‘‘One such Associate 

Administrator shall be the Associate Administrator for International Trade, who shall be the head of the Office of International Trade established under section 22.’’. 

(c) DISCHARGE OF INTERNATIONAL TRADE RESPONSIBILITIES OF

ADMINISTRATION.—Section 22 of the Small Business Act (15 U.S.C. 

649) is amended by adding at the end the following: 

‘‘(h) DISCHARGE OF INTERNATIONAL TRADE RESPONSIBILITIES OF

ADMINISTRATION.—The Administrator shall ensure that— 

‘‘(1) the responsibilities of the Administration regarding 

international trade are carried out by the Associate Administrator; 

‘‘(2) the Associate Administrator has sufficient resources 

to carry out such responsibilities; and 
H. R. 5297—19 

‘‘(3) the Associate Administrator has direct supervision and 

control over— 

‘‘(A) the staff of the Office; and 

‘‘(B) any employee of the Administration whose principal duty station is an Export Assistance Center, or any 

successor entity.’’. 

(d) ROLE OF ASSOCIATE ADMINISTRATOR IN CARRYING OUT

INTERNATIONAL TRADE POLICY.—Section 2(b)(1) of the Small Business Act (15 U.S.C. 631(b)(1)) is amended in the matter preceding 

subparagraph (A)— 

(1) by inserting ‘‘the Administrator of’’ before ‘‘the Small 

Business Administration’’; and 

(2) by inserting ‘‘through the Associate Administrator for 

International Trade, and’’ before ‘‘in cooperation with’’. 

(e) IMPLEMENTATION DATE.—Not later than 90 days after the 

date of enactment of this Act, the Administrator of the Small 

Business Administration shall appoint an Associate Administrator 

for International Trade under section 22(a) of the Small Business 

Act (15 U.S.C. 649(a)), as added by this section. 

SEC. 1204. DUTIES OF THE OFFICE OF INTERNATIONAL TRADE. 

(a) AMENDMENTS TO SECTION 22.—Section 22 of the Small 

Business Act (15 U.S.C. 649) is amended— 

(1) by striking subsection (b) and inserting the following: 

‘‘(b) TRADE DISTRIBUTION NETWORK.—The Associate Administrator, working in close cooperation with the Secretary of Commerce, 

the United States Trade Representative, the Secretary of Agriculture, the Secretary of State, the President of the Export-Import 

Bank of the United States, the President of the Overseas Private 

Investment Corporation, Director of the United States Trade and 

Development Agency, and other relevant Federal agencies, small 

business development centers engaged in export promotion efforts, 

Export Assistance Centers, regional and district offices of the 

Administration, the small business community, and relevant State 

and local export promotion programs, shall— 

‘‘(1) maintain a distribution network, using regional and 

district offices of the Administration, the small business 

development center network, networks of women’s business 

centers, the Service Corps of Retired Executives authorized 

by section 8(b)(1), and Export Assistance Centers, for programs 

relating to— 

‘‘(A) trade promotion; 

‘‘(B) trade finance; 

‘‘(C) trade adjustment assistance; 

‘‘(D) trade remedy assistance; and 

‘‘(E) trade data collection; 

‘‘(2) aggressively market the programs described in paragraph (1) and disseminate information, including computerized 

marketing data, to small business concerns on exporting trends, 

market-specific growth, industry trends, and international prospects for exports; 

‘‘(3) promote export assistance programs through the district and regional offices of the Administration, the small business development center network, Export Assistance Centers, 

the network of women’s business centers, chapters of the 

Service Corps of Retired Executives, State and local export 

promotion programs, and partners in the private sector; and 
H. R. 5297—20 

‘‘(4) give preference in hiring or approving the transfer 

of any employee into the Office or to a position described 

in subsection (c)(9) to otherwise qualified applicants who are 

fluent in a language in addition to English, to— 

‘‘(A) accompany small business concerns on foreign 

trade missions; and 

‘‘(B) translate documents, interpret conversations, and 

facilitate multilingual transactions, including by providing 

referral lists for translation services, if required.’’; 

(2) in subsection (c)— 

(A) by striking ‘‘(c) The Office’’ and inserting the following: 

‘‘(c) PROMOTION OF SALES OPPORTUNITIES.—The Associate 

Administrator’’; 

(B) by redesignating paragraphs (1) through (8) as 

paragraphs (2) through (9), respectively; 

(C) by inserting before paragraph (2), as so redesignated, the following: 

‘‘(1) establish annual goals for the Office relating to— 

‘‘(A) enhancing the exporting capability of small business concerns and small manufacturers; 

‘‘(B) facilitating technology transfers; 

‘‘(C) enhancing programs and services to assist small 

business concerns and small manufacturers to compete 

effectively and efficiently in foreign markets; 

‘‘(D) increasing the ability of small business concerns 

to access capital; and 

‘‘(E) disseminating information concerning Federal, 

State, and private programs and initiatives;’’; 

(D) in paragraph (2), as so redesignated, by striking 

‘‘mechanism for’’ and all that follows through ‘‘(D) assisting’’ 

and inserting the following: ‘‘mechanism for— 

‘‘(A) identifying subsectors of the small business 

community with strong export potential; 

‘‘(B) identifying areas of demand in foreign markets; 

‘‘(C) prescreening foreign buyers for commercial and 

credit purposes; and 

‘‘(D) assisting’’; 

(E) in paragraph (3), as so redesignated, by striking 

‘‘assist small businesses in the formation and utilization 

of’’ and inserting ‘‘assist small business concerns in forming 

and using’’; 

(F) in paragraph (4), as so redesignated— 

(i) by striking ‘‘local’’ and inserting ‘‘district’’; 

(ii) by striking ‘‘existing’’; 

(iii) by striking ‘‘Small Business Development 

Center network’’ and inserting ‘‘small business development center network’’; and 

(iv) by striking ‘‘Small Business Development 

Center Program’’ and inserting ‘‘small business 

development center program’’; 

(G) in paragraph (5), as so redesignated— 

(i) in subparagraph (A), by striking ‘‘Gross State 

Produce’’ and inserting ‘‘Gross State Product’’; 

(ii) in subparagraph (B), by striking ‘‘SIC’’ each 

place it appears and inserting ‘‘North American 

Industry Classification System’’; and 
H. R. 5297—21 

(iii) in subparagraph (C), by striking ‘‘small 

businesses’’ and inserting ‘‘small business concerns’’; 

(H) in paragraph (6), as so redesignated, by striking 

the period at the end and inserting a semicolon; 

(I) in paragraph (7), as so redesignated— 

(i) in the matter preceding subparagraph (A)— 

(I) by inserting ‘‘concerns’’ after ‘‘small business’’; and 

(II) by striking ‘‘current’’ and inserting ‘‘up 

to date’’; 

(ii) in subparagraph (A), by striking ‘‘Administration’s regional offices’’ and inserting ‘‘regional and district offices of the Administration’’; 

(iii) in subparagraph (B) by striking ‘‘current’’; 

(iv) in subparagraph (C), by striking ‘‘current’’; 

and 

(v) by striking ‘‘small businesses’’ each place that 

term appears and inserting ‘‘small business concerns’’; 

(J) in paragraph (8), as so redesignated, by striking 

and at the end; 

(K) in paragraph (9), as so redesignated— 

(i) in the matter preceding subparagraph (A)— 

(I) by striking ‘‘full-time export development 

specialists to each Administration regional office 

and assigning’’; and 

(II) by striking ‘‘person in each district office. 

Such specialists’’ and inserting ‘‘individual in each 

district office and providing each Administration 

regional office with a full-time export development 

specialist, who’’; 

(ii) in subparagraph (B)— 

(I) by striking ‘‘current’’; and 

(II) by striking ‘‘with’’ and inserting ‘‘in’’; 

(iii) in subparagraph (D)— 

(I) by striking ‘‘Administration personnel 

involved in granting’’ and inserting ‘‘personnel of 

the Administration involved in making’’; and 

(II) by striking ‘‘and’’ at the end; 

(iv) in subparagraph (E)— 

(I) by striking ‘‘small businesses’ needs’’ and 

inserting ‘‘the needs of small business concerns’’; 

and 

(II) by striking the period at the end and 

inserting a semicolon; 

(v) by adding at the end the following: 

‘‘(F) participate, jointly with employees of the Office, 

in an annual training program that focuses on current 

small business needs for exporting; and 

‘‘(G) develop and conduct training programs for 

exporters and lenders, in cooperation with the Export 

Assistance Centers, the Department of Commerce, the 

Department of Agriculture, small business development 

centers, women’s business centers, the Export-Import Bank 

of the United States, the Overseas Private Investment 

Corporation, and other relevant Federal agencies;’’; and 
H. R. 5297—22 

(vi) by striking ‘‘small businesses’’ each place that 

term appears and inserting ‘‘small business concerns’’; 

and 

(L) by adding at the end the following: 

‘‘(10) make available on the website of the Administration 

the name and contact information of each individual described 

in paragraph (9); 

‘‘(11) carry out a nationwide marketing effort using technology, online resources, training, and other strategies to promote exporting as a business development opportunity for small 

business concerns; 

‘‘(12) disseminate information to the small business community through regional and district offices of the Administration, 

the small business development center network, Export Assistance Centers, the network of women’s business centers, chapters of the Service Corps of Retired Executives authorized by 

section 8(b)(1), State and local export promotion programs, 

and partners in the private sector regarding exporting trends, 

market-specific growth, industry trends, and prospects for 

exporting; and 

‘‘(13) establish and carry out training programs for the 

staff of the regional and district offices of the Administration 

and resource partners of the Administration on export promotion and providing assistance relating to exports.’’; 

(3) in subsection (d)— 

(A) by redesignating paragraphs (1) through (5) as 

clauses (i) through (v), respectively, and adjusting the margins accordingly; 

(B) by striking ‘‘(d) The Office’’ and inserting the following: 

‘‘(d) EXPORT FINANCING PROGRAMS.— 

‘‘(1) IN GENERAL.—The Associate Administrator’’; and 

(C) by striking ‘‘To accomplish this goal, the Office 

shall work’’ and inserting the following: 

‘‘(2) TRADE FINANCE SPECIALIST.—To accomplish the goal 

established under paragraph (1), the Associate Administrator 

shall— 

‘‘(A) designate at least 1 individual within the Administration as a trade finance specialist to oversee international 

loan programs and assist Administration employees with 

trade finance issues; and 

‘‘(B) work’’; 

(4) in subsection (e), by striking ‘‘(e) The Office’’ and 

inserting the following: 

‘‘(e) TRADE REMEDIES.—The Associate Administrator’’; 

(5) by amending subsection (f) to read as follows: 

‘‘(f) REPORTING REQUIREMENT.—The Associate Administrator 

shall submit an annual report to the Committee on Small Business 

and Entrepreneurship of the Senate and the Committee on Small 

Business of the House of Representatives that contains— 

‘‘(1) a description of the progress of the Office in implementing the requirements of this section; 

‘‘(2) a detailed account of the results of export growth 

activities of the Administration, including the activities of each 

district and regional office of the Administration, based on 

the performance measures described in subsection (i); 
H. R. 5297—23 

‘‘(3) an estimate of the total number of jobs created or 

retained as a result of export assistance provided by the 

Administration and resource partners of the Administration; 

‘‘(4) for any travel by the staff of the Office, the destination 

of such travel and the benefits to the Administration and to 

small business concerns resulting from such travel; and 

‘‘(5) a description of the participation by the Office in trade 

negotiations.’’; 

(6) in subsection (g), by striking ‘‘(g) The Office’’ and 

inserting the following: 

‘‘(g) STUDIES.—The Associate Administrator’’; and 

(7) by adding after subsection (h), as added by section 

1203 of this subtitle, the following: 

‘‘(i) EXPORT AND TRADE COUNSELING.— 

‘‘(1) DEFINITION.—In this subsection— 

‘‘(A) the term ‘lead small business development center’ 

means a small business development center that has 

received a grant from the Administration; and 

‘‘(B) the term ‘lead women’s business center’ means 

a women’s business center that has received a grant from 

the Administration. 

‘‘(2) CERTIFICATION PROGRAM.—The Administrator shall 

establish an export and trade counseling certification program 

to certify employees of lead small business development centers 

and lead women’s business centers in providing export assistance to small business concerns. 

‘‘(3) NUMBER OF CERTIFIED EMPLOYEES.—The Administrator 

shall ensure that the number of employees of each lead small 

business development center who are certified in providing 

export assistance is not less than the lesser of— 

‘‘(A) 5; or 

‘‘(B) 10 percent of the total number of employees of 

the lead small business development center. 

‘‘(4) REIMBURSEMENT FOR CERTIFICATION.— ‘‘(A) IN GENERAL.—Subject to the availability of appropriations, the Administrator shall reimburse a lead small 

business development center or a lead women’s business 

center for costs relating to the certification of an employee 

of the lead small business center or lead women’s business 

center in providing export assistance under the program 

established under paragraph (2). 

‘‘(B) LIMITATION.—The total amount reimbursed by the 

Administrator under subparagraph (A) may not exceed 

$350,000 in any fiscal year. 

‘‘(j) PERFORMANCE MEASURES.— 

‘‘(1) IN GENERAL.—The Associate Administrator shall 

develop performance measures for the Administration to support export growth goals for the activities of the Office under 

this section that include— 

‘‘(A) the number of small business concerns that— 

‘‘(i) receive assistance from the Administration; 

‘‘(ii) had not exported goods or services before 

receiving the assistance described in clause (i); and 

‘‘(iii) export goods or services; 

‘‘(B) the number of small business concerns receiving 

assistance from the Administration that export goods or 

services to a market outside the United States into which 
H. R. 5297—24 

the small business concern did not export before receiving 

the assistance; 

‘‘(C) export revenues by small business concerns 

assisted by programs of the Administration; 

‘‘(D) the number of small business concerns referred 

to an Export Assistance Center or a small business development center by the staff of the Office; 

‘‘(E) the number of small business concerns referred 

to the Administration by an Export Assistance Center or 

a small business development center; and 

‘‘(F) the number of small business concerns referred 

to the Department of Commerce, the Department of Agriculture, the Department of State, the Export-Import Bank 

of the United States, the Overseas Private Investment 

Corporation, or the United States Trade and Development 

Agency by the staff of the Office, an Export Assistance 

Center, or a small business development center. 

‘‘(2) JOINT PERFORMANCE MEASURES.—The Associate 

Administrator shall develop joint performance measures for 

the district offices of the Administration and the Export Assistance Centers that include the number of export loans made 

under— 

‘‘(A) section 7(a)(16); 

‘‘(B) the Export Working Capital Program established 

under section 7(a)(14); 

‘‘(C) the Preferred Lenders Program, as defined in section 7(a)(2)(C)(ii); and 

‘‘(D) the export express program established under section 7(a)(34). 

‘‘(3) CONSISTENCY OF TRACKING.—The Associate Administrator, in coordination with the departments and agencies that 

are represented on the Trade Promotion Coordinating Committee established under section 2312 of the Export Enhancement Act of 1988 (15 U.S.C. 4727) and the small business 

development center network, shall develop a system to track 

exports by small business concerns, including information 

relating to the performance measures developed under paragraph (1), that is consistent with systems used by the departments and agencies and the network.’’. 

(b) REPORT.—Not later than 60 days after the date of enactment 

of this Act, the Administrator shall submit a report to the Committee on Small Business and Entrepreneurship of the Senate and 

the Committee on Small Business of the House of Representatives 

on any travel by the staff of the Office of International Trade 

of the Administration, during the period beginning on October 1, 

2004, and ending on the date of enactment of the Act, including 

the destination of such travel and the benefits to the Administration 

and to small business concerns resulting from such travel. 

SEC. 1205. EXPORT ASSISTANCE CENTERS. 

(a) EXPORT ASSISTANCE CENTERS.—Section 22 of the Small 

Business Act (15 U.S.C. 649), as amended by this subtitle, is 

amended by adding at the end the following: 

‘‘(k) EXPORT ASSISTANCE CENTERS.— ‘‘(1) EXPORT FINANCE SPECIALISTS.— ‘‘(A) MINIMUM NUMBER OF EXPORT FINANCE SPECIAL- ISTS.—On and after the date that is 90 days after the 
H. R. 5297—25 

date of enactment of this subsection, the Administrator, 

in coordination with the Secretary of Commerce, shall 

ensure that the number of export finance specialists is 

not less than the number of such employees so assigned 

on January 1, 2003. 

‘‘(B) EXPORT FINANCE SPECIALISTS ASSIGNED TO EACH

REGION OF THE ADMINISTRATION.—On and after the date 

that is 2 years after the date of enactment of this subsection, the Administrator, in coordination with the Secretary of Commerce, shall ensure that there are not fewer 

than 3 export finance specialists in each region of the 

Administration. 

‘‘(2) PLACEMENT OF EXPORT FINANCE SPECIALISTS.— 

‘‘(A) PRIORITY.—The Administrator shall give priority, 

to the maximum extent practicable, to placing employees 

of the Administration at any Export Assistance Center 

that— 

‘‘(i) had an Administration employee assigned to 

the Export Assistance Center before January 2003; 

and 

‘‘(ii) has not had an Administration employee 

assigned to the Export Assistance Center during the 

period beginning January 2003, and ending on the 

date of enactment of this subsection, either through 

retirement or reassignment. 

‘‘(B) NEEDS OF EXPORTERS.—The Administrator shall, 

to the maximum extent practicable, strategically assign 

Administration employees to Export Assistance Centers, 

based on the needs of exporters. 

‘‘(C) RULE OF CONSTRUCTION.—Nothing in this subsection may be construed to require the Administrator to 

reassign or remove an export finance specialist who is 

assigned to an Export Assistance Center on the date of 

enactment of this subsection. 

‘‘(3) GOALS.—The Associate Administrator shall work with 

the Department of Commerce, the Export-Import Bank of the 

United States, and the Overseas Private Investment Corporation to establish shared annual goals for the Export Assistance 

Centers. 

‘‘(4) OVERSIGHT.—The Associate Administrator shall designate an individual within the Administration to oversee all 

activities conducted by Administration employees assigned to 

Export Assistance Centers. 

‘‘(l) DEFINITIONS.—In this section— 

‘‘(1) the term ‘Associate Administrator’ means the Associate 

Administrator for International Trade described in subsection 

(a)(2); 

‘‘(2) the term ‘Export Assistance Center’ means a onestop shop for United States exporters established by the United 

States and Foreign Commercial Service of the Department of 

Commerce pursuant to section 2301(b)(8) of the Omnibus Trade 

and Competitiveness Act of 1988 (15 U.S.C. 4721(b)(8)); 

‘‘(3) the term ‘export finance specialist’ means a full-time 

equivalent employee of the Office assigned to an Export Assistance Center to carry out the duties described in subsection 

(e); and 
H. R. 5297—26 

‘‘(4) the term ‘Office’ means the Office of International 

Trade established under subsection (a)(1).’’. 

(b) STUDY AND REPORT ON FILLING GAPS IN HIGH-AND-LOWEXPORT VOLUME AREAS.— 

(1) STUDY AND REPORT.—Not later than 6 months after 

the date of enactment of this Act, and every 2 years thereafter, 

the Administrator shall— 

(A) conduct a study of— 

(i) the volume of exports for each State; 

(ii) the availability of export finance specialists 

in each State; 

(iii) the number of exporters in each State that 

are small business concerns; 

(iv) the percentage of exporters in each State that 

are small business concerns; 

(v) the change, if any, in the number of exporters 

that are small business concerns in each State— 

(I) for the first study conducted under this 

subparagraph, during the 10-year period ending 

on the date of enactment of this Act; and 

(II) for each subsequent study, during the 10- 

year period ending on the date the study is commenced; 

(vi) the total value of the exports in each State 

by small business concerns; 

(vii) the percentage of the total volume of exports 

in each State that is attributable to small business 

concerns; and 

(viii) the change, if any, in the percentage of the 

total volume of exports in each State that is attributable to small business concerns— 

(I) for the first study conducted under this 

subparagraph, during the 10-year period ending 

on the date of enactment of this Act; and 

(II) for each subsequent study, during the 10- 

year period ending on the date the study is commenced; and 

(B) submit to the Committee on Small Business and 

Entrepreneurship of the Senate and the Committee on 

Small Business of the House of Representatives a report 

containing— 

(i) the results of the study under subparagraph 

(A); 

(ii) to the extent practicable, a recommendation 

regarding how to eliminate gaps between the supply 

of and demand for export finance specialists in the 

15 States that have the greatest volume of exports, 

based upon the most recent data available from the 

Department of Commerce; 

(iii) to the extent practicable, a recommendation 

regarding how to eliminate gaps between the supply 

of and demand for export finance specialists in the 

15 States that have the lowest volume of exports, based 

upon the most recent data available from the Department of Commerce; and 

(iv) such additional information as the Administrator determines is appropriate. 
H. R. 5297—27 

(2) DEFINITION.—In this subsection, the term ‘‘export 

finance specialist’’ has the meaning given that term in section 

22(l) of the Small Business Act, as added by this title. 

SEC. 1206. INTERNATIONAL TRADE FINANCE PROGRAMS. 

(a) LOAN LIMITS.— 

(1) TOTAL AMOUNT OUTSTANDING.—Section 7(a)(3)(B) of the 

Small Business Act (15 U.S.C. 636(a)(3)(B)) is amended by 

striking ‘‘$1,750,000, of which not more than $1,250,000’’ and 

inserting ‘‘$4,500,000 (or if the gross loan amount would exceed 

$5,000,000), of which not more than $4,000,000’’. 

(2) PARTICIPATION.—Section 7(a)(2) of the Small Business 

Act (15 U.S.C. 636(a)(2)) is amended— 

(A) in subparagraph (A), in the matter preceding clause 

(i), by striking ‘‘subparagraph (B)’’ and inserting ‘‘subparagraphs (B), (D), and (E)’’; 

(B) in subparagraph (D), by striking ‘‘Notwithstanding 

subparagraph (A), in’’ and inserting ‘‘In’’; and 

(C) by adding at the end the following: 

‘‘(E) PARTICIPATION IN INTERNATIONAL TRADE LOAN.— 

In an agreement to participate in a loan on a deferred 

basis under paragraph (16), the participation by the 

Administration may not exceed 90 percent.’’. 

(b) WORKING CAPITAL.—Section 7(a)(16)(A) of the Small Business Act (15 U.S.C. 636(a)(16)(A)) is amended— 

(1) in the matter preceding clause (i), by striking ‘‘in— 

’’ and inserting ‘‘—’’; 

(2) in clause (i)— 

(A) by inserting ‘‘in’’ after ‘‘(i)’’; and 

(B) by striking ‘‘or’’ at the end; 

(3) in clause (ii)— 

(A) by inserting ‘‘in’’ after ‘‘(ii)’’; and 

(B) by striking the period at the end and inserting 

‘‘, including any debt that qualifies for refinancing under 

any other provision of this subsection; or’’; and 

(4) by adding at the end the following: 

‘‘(iii) by providing working capital.’’. 

(c) COLLATERAL.—Section 7(a)(16)(B) of the Small Business Act 

(15 U.S.C. 636(a)(16)(B)) is amended— 

(1) by striking ‘‘Each loan’’ and inserting the following: 

‘‘(i) IN GENERAL.—Except as provided in clause 

(ii), each loan’’; and 

(2) by adding at the end the following: 

‘‘(ii) EXCEPTION.—A loan under this paragraph may 

be secured by a second lien position on the property 

or equipment financed by the loan or on other assets 

of the small business concern, if the Administrator 

determines the lien provides adequate assurance of 

the payment of the loan.’’. 

(d) EXPORT WORKING CAPITAL PROGRAM.—Section 7(a) of the 

Small Business Act (15 U.S.C. 636(a)) is amended— 

(1) in paragraph (2)(D), by striking ‘‘not exceed’’ and 

inserting ‘‘be’’; and 

(2) in paragraph (14)— 

(A) by striking ‘‘(A) The Administration’’ and inserting 

the following: ‘‘EXPORT WORKING CAPITAL PROGRAM.— 

‘‘(A) IN GENERAL.—The Administrator’’; 
H. R. 5297—28 

(B) by striking ‘‘(B) When considering’’ and inserting 

the following: 

‘‘(C) CONSIDERATIONS.—When considering’’; 

(C) by striking ‘‘(C) The Administration’’ and inserting 

the following: 

‘‘(D) MARKETING.—The Administrator’’; and 

(D) by inserting after subparagraph (A) the following: 

‘‘(B) TERMS.— 

‘‘(i) LOAN AMOUNT.—The Administrator may not 

guarantee a loan under this paragraph of more than 

$5,000,000. 

‘‘(ii) FEES.— 

‘‘(I) IN GENERAL.—For a loan under this paragraph, the Administrator shall collect the fee 

assessed under paragraph (23) not more frequently 

than once each year. 

‘‘(II) UNTAPPED CREDIT.—The Administrator 

may not assess a fee on capital that is not accessed 

by the small business concern.’’. 

(e) PARTICIPATION IN PREFERRED LENDERS PROGRAM.—Section 

7(a)(2)(C) of the Small Business Act (15 U.S.C. 636(a)(2)(C)) is 

amended— 

(1) by redesignating clause (ii) as clause (iii); and 

(2) by inserting after clause (i) the following: 

‘‘(ii) EXPORT-IMPORT BANK LENDERS.—Any lender 

that is participating in the Delegated Authority Lender 

Program of the Export-Import Bank of the United 

States (or any successor to the Program) shall be 

eligible to participate in the Preferred Lenders Program.’’. 

(f) EXPORT EXPRESS PROGRAM.—Section 7(a) of the Small Business Act (15 U.S.C. 636(a)) is amended by adding at the end 

the following: 

‘‘(35) EXPORT EXPRESS PROGRAM.— 

‘‘(A) DEFINITIONS.—In this paragraph— 

‘‘(i) the term ‘export development activity’ 

includes— 

‘‘(I) obtaining a standby letter of credit when 

required as a bid bond, performance bond, or 

advance payment guarantee; 

‘‘(II) participation in a trade show that takes 

place outside the United States; 

‘‘(III) translation of product brochures or catalogues for use in markets outside the United 

States; 

‘‘(IV) obtaining a general line of credit for 

export purposes; 

‘‘(V) performing a service contract from buyers 

located outside the United States; 

‘‘(VI) obtaining transaction-specific financing 

associated with completing export orders; 

‘‘(VII) purchasing real estate or equipment to 

be used in the production of goods or services 

for export; 

‘‘(VIII) providing term loans or other financing 

to enable a small business concern, including an 
H. R. 5297—29 

export trading company and an export management company, to develop a market outside the 

United States; and 

‘‘(IX) acquiring, constructing, renovating, modernizing, improving, or expanding a production 

facility or equipment to be used in the United 

States in the production of goods or services for 

export; and 

‘‘(ii) the term ‘express loan’ means a loan in which 

a lender uses to the maximum extent practicable the 

loan analyses, procedures, and documentation of the 

lender to provide expedited processing of the loan 

application. 

‘‘(B) AUTHORITY.—The Administrator may guarantee 

the timely payment of an express loan to a small business 

concern made for an export development activity. 

‘‘(C) LEVEL OF PARTICIPATION.— 

‘‘(i) MAXIMUM AMOUNT.—The maximum amount of 

an express loan guaranteed under this paragraph shall 

be $500,000. 

‘‘(ii) PERCENTAGE.—For an express loan guaranteed under this paragraph, the Administrator shall 

guarantee— 

‘‘(I) 90 percent of a loan that is not more 

than $350,000; and 

‘‘(II) 75 percent of a loan that is more than 

$350,000 and not more than $500,000.’’. 

(g) ANNUAL LISTING OF EXPORT FINANCE LENDERS.—Section 

7(a)(16) of the Small Business Act (15 U.S.C. 636(a)(16)) is amended 

by adding at the end the following: 

‘‘(F) LIST OF EXPORT FINANCE LENDERS.— 

‘‘(i) PUBLICATION OF LIST REQUIRED.—The Administrator shall publish an annual list of the banks and 

participating lending institutions that, during the 1- 

year period ending on the date of publication of the 

list, have made loans guaranteed by the Administration under— 

‘‘(I) this paragraph; 

‘‘(II) paragraph (14); or 

‘‘(III) paragraph (34). 

‘‘(ii) AVAILABILITY OF LIST.—The Administrator 

shall— 

‘‘(I) post the list published under clause (i) 

on the website of the Administration; and 

‘‘(II) make the list published under clause (i) 

available, upon request, at each district office of 

the Administration.’’. 

(h) APPLICABILITY.—The amendments made by subsections (a) 

through (f) shall apply with respect to any loan made after the 

date of enactment of this Act. 

SEC. 1207. STATE TRADE AND EXPORT PROMOTION GRANT PROGRAM. 

(a) DEFINITIONS.—In this section— 

(1) the term ‘‘eligible small business concern’’ means a 

small business concern that— 
H. R. 5297—30 

(A) has been in business for not less than the 1-year 

period ending on the date on which assistance is provided 

using a grant under this section; 

(B) is operating profitably, based on operations in the 

United States; 

(C) has demonstrated understanding of the costs associated with exporting and doing business with foreign purchasers, including the costs of freight forwarding, customs 

brokers, packing and shipping, as determined by the Associate Administrator; and 

(D) has in effect a strategic plan for exporting; 

(2) the term ‘‘program’’ means the State Trade and Export 

Promotion Grant Program established under subsection (b); 

(3) the term ‘‘small business concern owned and controlled 

by women’’ has the meaning given that term in section 3 

of the Small Business Act (15 U.S.C. 632); 

(4) the term ‘‘socially and economically disadvantaged small 

business concern’’ has the meaning given that term in section 

8(a)(4)(A) of the Small Business Act (15 U.S.C. 6537(a)(4)(A)); 

and 

(5) the term ‘‘State’’ means each of the several States, 

the District of Columbia, the Commonwealth of Puerto Rico, 

the Virgin Islands, Guam, and American Samoa. 

(b) ESTABLISHMENT OF PROGRAM.—The Associate Administrator 

shall establish a 3-year trade and export promotion pilot program 

to be known as the State Trade and Export Promotion Grant 

Program, to make grants to States to carry out export programs 

that assist eligible small business concerns in— 

(1) participation in a foreign trade mission; 

(2) a foreign market sales trip; 

(3) a subscription to services provided by the Department 

of Commerce; 

(4) the payment of website translation fees; 

(5) the design of international marketing media; 

(6) a trade show exhibition; 

(7) participation in training workshops; or 

(8) any other export initiative determined appropriate by 

the Associate Administrator. 

(c) GRANTS.— 

(1) JOINT REVIEW.—In carrying out the program, the Associate Administrator may make a grant to a State to increase 

the number of eligible small business concerns in the State 

that export or to increase the value of the exports by eligible 

small business concerns in the State. 

(2) CONSIDERATIONS.—In making grants under this section, 

the Associate Administrator may give priority to an application 

by a State that proposes a program that— 

(A) focuses on eligible small business concerns as part 

of an export promotion program; 

(B) demonstrates success in promoting exports by— 

(i) socially and economically disadvantaged small 

business concerns; 

(ii) small business concerns owned or controlled 

by women; and 

(iii) rural small business concerns; 

(C) promotes exports from a State that is not 1 of 

the 10 States with the highest percentage of exporters 
H. R. 5297—31 

that are small business concerns, based upon the latest 

data available from the Department of Commerce; and 

(D) promotes new-to-market export opportunities to 

the People’s Republic of China for eligible small business 

concerns in the United States. 

(3) LIMITATIONS.— 

(A) SINGLE APPLICATION.—A State may not submit 

more than 1 application for a grant under the program 

in any 1 fiscal year. 

(B) PROPORTION OF AMOUNTS.—The total value of 

grants under the program made during a fiscal year to 

the 10 States with the highest number of exporters that 

are small business concerns, based upon the latest data 

available from the Department of Commerce, shall be not 

more than 40 percent of the amounts appropriated for 

the program for that fiscal year. 

(4) APPLICATION.—A State desiring a grant under the program shall submit an application at such time, in such manner, 

and accompanied by such information as the Associate Administrator may establish. 

(d) COMPETITIVE BASIS.—The Associate Administrator shall 

award grants under the program on a competitive basis. 

(e) FEDERAL SHARE.—The Federal share of the cost of an export 

program carried out using a grant under the program shall be— 

(1) for a State that has a high export volume, as determined 

by the Associate Administrator, not more than 65 percent; 

and 

(2) for a State that does not have a high export volume, 

as determined by the Associate Administrator, not more than 

75 percent. 

(f) NON-FEDERAL SHARE.—The non-Federal share of the cost 

of an export program carried using a grant under the program 

shall be comprised of not less than 50 percent cash and not more 

than 50 percent of indirect costs and in-kind contributions, except 

that no such costs or contributions may be derived from funds 

from any other Federal program. 

(g) REPORTS.— 

(1) INITIAL REPORT.—Not later than 120 days after the 

date of enactment of this Act, the Associate Administrator 

shall submit to the Committee on Small Business and 

Entrepreneurship of the Senate and the Committee on Small 

Business of the House of Representatives a report, which shall 

include— 

(A) a description of the structure of and procedures 

for the program; 

(B) a management plan for the program; and 

(C) a description of the merit-based review process 

to be used in the program. 

(2) ANNUAL REPORTS.—The Associate Administrator shall 

submit an annual report to the Committee on Small Business 

and Entrepreneurship of the Senate and the Committee on 

Small Business of the House of Representatives regarding the 

program, which shall include— 

(A) the number and amount of grants made under 

the program during the preceding year; 
H. R. 5297—32 

(B) a list of the States receiving a grant under the 

program during the preceding year, including the activities 

being performed with grant; and 

(C) the effect of each grant on exports by eligible small 

business concerns in the State receiving the grant. 

(h) REVIEWS BY INSPECTOR GENERAL.— 

(1) IN GENERAL.—The Inspector General of the Administration shall conduct a review of— 

(A) the extent to which recipients of grants under 

the program are measuring the performance of the activities being conducted and the results of the measurements; 

and 

(B) the overall management and effectiveness of the 

program. 

(2) REPORT.—Not later than September 30, 2012, the 

Inspector General of the Administration shall submit to the 

Committee on Small Business and Entrepreneurship of the 

Senate and the Committee on Small Business of the House 

of Representatives a report regarding the review conducted 

under paragraph (1). 

(i) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to carry out the program $30,000,000 for each 

of fiscal years 2011, 2012, and 2013. 

(j) TERMINATION.—The authority to carry out the program shall 

terminate 3 years after the date on which the Associate Administrator establishes the program. 

SEC. 1208. RURAL EXPORT PROMOTION. 

Not later than 6 months after the date of enactment of this 

Act, the Administrator, in consultation with the Secretary of Agriculture and the Secretary of Commerce, shall submit to the Committee on Small Business and Entrepreneurship of the Senate and 

the Committee on Small Business of the House of Representatives 

a report that contains— 

(1) a description of each program of the Administration 

that promotes exports by rural small business concerns, 

including— 

(A) the number of rural small business concerns served 

by the program; 

(B) the change, if any, in the number of rural small 

business concerns as a result of participation in the program during the 10-year period ending on the date of 

enactment of this Act; 

(C) the volume of exports by rural small business concerns that participate in the program; and 

(D) the change, if any, in the volume of exports by 

rural small businesses that participate in the program 

during the 10-year period ending on the date of enactment 

of this Act; 

(2) a description of the coordination between programs 

of the Administration and other Federal programs that promote 

exports by rural small business concerns; 

(3) recommendations, if any, for improving the coordination 

described in paragraph (2); 

(4) a description of any plan by the Administration to 

market the international trade financing programs of the 

Administration through lenders that— 
H. R. 5297—33 

(A) serve rural small business concerns; and 

(B) are associated with financing programs of the 

Department of Agriculture; 

(5) recommendations, if any, for improving coordination 

between the counseling programs and export financing programs of the Administration, in order to increase the volume 

of exports by rural small business concerns; and 

(6) any additional information the Administrator determines is necessary. 

SEC. 1209. INTERNATIONAL TRADE COOPERATION BY SMALL BUSINESS 

DEVELOPMENT CENTERS. 

Section 21(a) of the Small Business Act (15 U.S.C. 648(a)) 

is amended— 

(1) by striking ‘‘(2) The Small Business Development Centers’’ and inserting the following: 

‘‘(2) COOPERATION TO PROVIDE INTERNATIONAL TRADE SERVICES.— 

‘‘(A) INFORMATION AND SERVICES.—The small business 

development centers’’; and 

(2) in paragraph (2)— 

(A) in subparagraph (A), as so designated, by inserting 

‘‘(including State trade agencies),’’ after ‘‘local agencies’’; 

and 

(B) by adding at the end the following: 

‘‘(B) COOPERATION WITH STATE TRADE AGENCIES AND

EXPORT ASSISTANCE CENTERS.—A small business development center that counsels a small business concern on 

issues relating to international trade shall— 

‘‘(i) consult with State trade agencies and Export 

Assistance Centers to provide appropriate services to 

the small business concern; and 

‘‘(ii) as necessary, refer the small business concern 

to a State trade agency or an Export Assistance Center 

for further counseling or assistance. 

‘‘(C) DEFINITION.—In this paragraph, the term ‘Export 

Assistance Center’ has the same meaning as in section 

22.’’. 

Subtitle C—Small Business Contracting 

PART I—CONTRACT BUNDLING 

SEC. 1311. SMALL BUSINESS ACT. 

Section 3 of the Small Business Act (15 U.S.C. 632), as amended 

by section 1202, is amended by adding at the end the following: 

‘‘(v) MULTIPLE AWARD CONTRACT.—In this Act, the term ‘multiple award contract’ means— 

‘‘(1) a multiple award task order contract or delivery order 

contract that is entered into under the authority of sections 

303H through 303K of the Federal Property and Administrative 

Services Act of 1949 (41 U.S.C. 253h through 253k); and 

‘‘(2) any other indefinite delivery, indefinite quantity contract that is entered into by the head of a Federal agency 

with 2 or more sources pursuant to the same solicitation.’’. 
H. R. 5297—34 

SEC. 1312. LEADERSHIP AND OVERSIGHT. 

(a) IN GENERAL.—Section 15 of the Small Business Act (15 

U.S.C. 644) is amended by adding at the end the following: 

‘‘(q) BUNDLING ACCOUNTABILITY MEASURES.— 

‘‘(1) TEAMING REQUIREMENTS.—Each Federal agency shall 

include in each solicitation for any multiple award contract 

above the substantial bundling threshold of the Federal agency 

a provision soliciting bids from any responsible source, including 

responsible small business concerns and teams or joint ventures 

of small business concerns. 

‘‘(2) POLICIES ON REDUCTION OF CONTRACT BUNDLING.— 

‘‘(A) IN GENERAL.—Not later than 1 year after the 

date of enactment of this subsection, the Federal Acquisition Regulatory Council established under section 25(a) 

of the Office of Federal Procurement Policy Act (41 U.S.C. 

4219(a)) shall amend the Federal Acquisition Regulation 

issued under section 25 of such Act to— 

‘‘(i) establish a Government-wide policy regarding 

contract bundling, including regarding the solicitation 

of teaming and joint ventures under paragraph (1); 

and 

‘‘(ii) require that the policy established under 

clause (i) be published on the website of each Federal 

agency. 

‘‘(B) RATIONALE FOR CONTRACT BUNDLING.—Not later 

than 30 days after the date on which the head of a Federal 

agency submits data certifications to the Administrator 

for Federal Procurement Policy, the head of the Federal 

agency shall publish on the website of the Federal agency 

a list and rationale for any bundled contract for which 

the Federal agency solicited bids or that was awarded 

by the Federal agency. 

‘‘(3) REPORTING.—Not later than 90 days after the date 

of enactment of this subsection, and every 3 years thereafter, 

the Administrator shall submit to the Committee on Small 

Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a 

report regarding procurement center representatives and 

commercial market representatives, which shall— 

‘‘(A) identify each area for which the Administration 

has assigned a procurement center representative or a 

commercial market representative; 

‘‘(B) explain why the Administration selected the areas 

identified under subparagraph (A); and 

‘‘(C) describe the activities performed by procurement 

center representatives and commercial market representatives.’’. 

(b) TECHNICAL CORRECTION.—Section 15(g) of the Small Business Act (15 U.S.C. 644(g)) is amended by striking ‘‘Administrator 

of the Office of Federal Procurement Policy’’ each place it appears 

and inserting ‘‘Administrator for Federal Procurement Policy’’. 

(c) REPORT.— 

(1) IN GENERAL.—Not later than 180 days after the date 

of enactment of this Act, the Comptroller General of the United 

States shall submit to Congress a report regarding the procurement center representative program of the Administration. 
H. R. 5297—35 

(2) CONTENTS.—The report submitted under paragraph (1) 

shall— 

(A) address ways to improve the effectiveness of the 

procurement center representative program in helping 

small business concerns obtain Federal contracts; 

(B) evaluate the effectiveness of procurement center 

representatives and commercial marketing representatives; 

and 

(C) include recommendations, if any, on how to improve 

the procurement center representative program. 

(d) ELECTRONIC PROCUREMENT CENTER REPRESENTATIVE.— (1) IN GENERAL.—Not later than 1 year after the date 

of enactment of this Act, the Administrator shall implement 

a 3-year pilot electronic procurement center representative program. 

(2) REPORT.—Not later than 30 days after the pilot program 

under paragraph (1) ends, the Comptroller General of the 

United States shall submit to the Committee on Small Business 

and Entrepreneurship of the Senate and the Committee on 

Small Business of the House of Representatives a report 

regarding the pilot program. 

SEC. 1313. CONSOLIDATION OF CONTRACT REQUIREMENTS. 

(a) IN GENERAL.—The Small Business Act (15 U.S.C. 631 et 

seq.) is amended— 

(1) by redesignating section 44 as section 45; and 

(2) by inserting after section 43 the following: 

‘‘SEC. 44. CONSOLIDATION OF CONTRACT REQUIREMENTS. 

‘‘(a) DEFINITIONS.—In this section— 

‘‘(1) the term ‘Chief Acquisition Officer’ means the employee 

of a Federal agency designated as the Chief Acquisition Officer 

for the Federal agency under section 16(a) of the Office of 

Federal Procurement Policy Act (41 U.S.C. 414(a)); 

‘‘(2) the term ‘consolidation of contract requirements’, with 

respect to contract requirements of a Federal agency, means 

a use of a solicitation to obtain offers for a single contract 

or a multiple award contract to satisfy 2 or more requirements 

of the Federal agency for goods or services that have been 

provided to or performed for the Federal agency under 2 or 

more separate contracts lower in cost than the total cost of 

the contract for which the offers are solicited; and 

‘‘(3) the term ‘senior procurement executive’ means an official designated under section 16(c) of the Office of Federal 

Procurement Policy Act (41 U.S.C. 414(c)) as the senior procurement executive for a Federal agency. 

‘‘(b) POLICY.—The head of each Federal agency shall ensure 

that the decisions made by the Federal agency regarding consolidation of contract requirements of the Federal agency are made with 

a view to providing small business concerns with appropriate 

opportunities to participate as prime contractors and subcontractors 

in the procurements of the Federal agency. 

‘‘(c) LIMITATION ON USE OF ACQUISITION STRATEGIES INVOLVING

CONSOLIDATION.— 

‘‘(1) IN GENERAL.—Subject to paragraph (4), the head of 

a Federal agency may not carry out an acquisition strategy 

that includes a consolidation of contract requirements of the 

Federal agency with a total value of more than $2,000,000, 
H. R. 5297—36 

unless the senior procurement executive or Chief Acquisition 

Officer for the Federal agency, before carrying out the acquisition strategy— 

‘‘(A) conducts market research; 

‘‘(B) identifies any alternative contracting approaches 

that would involve a lesser degree of consolidation of contract requirements; 

‘‘(C) makes a written determination that the consolidation of contract requirements is necessary and justified; 

‘‘(D) identifies any negative impact by the acquisition 

strategy on contracting with small business concerns; and 

‘‘(E) certifies to the head of the Federal agency that 

steps will be taken to include small business concerns 

in the acquisition strategy. 

‘‘(2) DETERMINATION THAT CONSOLIDATION IS NECESSARY

AND JUSTIFIED.— 

‘‘(A) IN GENERAL.—A senior procurement executive or 

Chief Acquisition Officer may determine that an acquisition 

strategy involving a consolidation of contract requirements 

is necessary and justified for the purposes of paragraph 

(1)(C) if the benefits of the acquisition strategy substantially exceed the benefits of each of the possible alternative 

contracting approaches identified under paragraph (1)(B). 

‘‘(B) SAVINGS IN ADMINISTRATIVE OR PERSONNEL

COSTS.—For purposes of subparagraph (A), savings in 

administrative or personnel costs alone do not constitute 

a sufficient justification for a consolidation of contract 

requirements in a procurement unless the expected total 

amount of the cost savings, as determined by the senior 

procurement executive or Chief Acquisition Officer, is 

expected to be substantial in relation to the total cost 

of the procurement. 

‘‘(3) BENEFITS TO BE CONSIDERED.—The benefits considered 

for the purposes of paragraphs (1) and (2) may include cost 

and, regardless of whether quantifiable in dollar amounts— 

‘‘(A) quality; 

‘‘(B) acquisition cycle; 

‘‘(C) terms and conditions; and 

‘‘(D) any other benefit. 

‘‘(4) DEPARTMENT OF DEFENSE.— 

‘‘(A) IN GENERAL.—The Department of Defense and 

each military department shall comply with this section 

until after the date described in subparagraph (C). 

‘‘(B) RULE.—After the date described in subparagraph 

(C), contracting by the Department of Defense or a military 

department shall be conducted in accordance with section 

2382 of title 10, United States Code. 

‘‘(C) DATE.—The date described in this subparagraph 

is the date on which the Administrator determines the 

Department of Defense or a military department is in 

compliance with the Government-wide contracting goals 

under section 15.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENT.—Section 

2382(b)(1) of title 10, United States Code, is amended by striking 

‘‘An official’’ and inserting ‘‘Subject to section 44(c)(4), an official’’. 
H. R. 5297—37 

SEC. 1314. SMALL BUSINESS TEAMS PILOT PROGRAM. 

(a) DEFINITIONS.—In this section— 

(1) the term ‘‘Pilot Program’’ means the Small Business 

Teaming Pilot Program established under subsection (b); and 

(2) the term ‘‘eligible organization’’ means a well-established national organization for small business concerns with 

the capacity to provide assistance to small business concerns 

(which may be provided with the assistance of the Administrator) relating to— 

(A) customer relations and outreach; 

(B) team relations and outreach; and 

(C) performance measurement and quality assurance. 

(b) ESTABLISHMENT.—The Administrator shall establish a Small 

Business Teaming Pilot Program for teaming and joint ventures 

involving small business concerns. 

(c) GRANTS.—Under the Pilot Program, the Administrator may 

make grants to eligible organizations to provide assistance and 

guidance to teams of small business concerns seeking to compete 

for larger procurement contracts. 

(d) CONTRACTING OPPORTUNITIES.—The Administrator shall 

work with eligible organizations receiving a grant under the Pilot 

Program to recommend appropriate contracting opportunities for 

teams or joint ventures of small business concerns. 

(e) REPORT.—Not later than 1 year before the date on which 

the authority to carry out the Pilot Program terminates under 

subsection (f), the Administrator shall submit to the Committee 

on Small Business and Entrepreneurship of the Senate and the 

Committee on Small Business of the House of Representatives 

a report on the effectiveness of the Pilot Program. 

(f) TERMINATION.—The authority to carry out the Pilot Program 

shall terminate 5 years after the date of enactment of this Act. 

(g) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated for grants under subsection (c) $5,000,000 for 

each of fiscal years 2010 through 2015. 

PART II—SUBCONTRACTING INTEGRITY 

SEC. 1321. SUBCONTRACTING MISREPRESENTATIONS. 

Not later than 1 year after the date of enactment of this 

Act, the Administrator, in consultation with the Administrator for 

Federal Procurement Policy, shall promulgate regulations relating 

to, and the Federal Acquisition Regulatory Council established 

under section 25(a) of the Office of Federal Procurement Policy 

Act (41 U.S.C. 421(a)) shall amend the Federal Acquisition Regulation issued under section 25 of such Act to establish a policy 

on, subcontracting compliance relating to small business concerns, 

including assignment of compliance responsibilities between contracting offices, small business offices, and program offices and 

periodic oversight and review activities. 

SEC. 1322. SMALL BUSINESS SUBCONTRACTING IMPROVEMENTS. 

Section 8(d)(6) of the Small Business Act (15 U.S.C. 637(d)(6)) 

is amended— 

(1) in subparagraph (E), by striking ‘‘and’’ at the end; 

(2) in subparagraph (F), by striking the period at the end 

and inserting ‘‘; and’’; and 

(3) by adding at the end, the following: 
H. R. 5297—38 

‘‘(G) a representation that the offeror or bidder will— 

‘‘(i) make a good faith effort to acquire articles, 

equipment, supplies, services, or materials, or obtain 

the performance of construction work from the small 

business concerns used in preparing and submitting 

to the contracting agency the bid or proposal, in the 

same amount and quality used in preparing and 

submitting the bid or proposal; and 

‘‘(ii) provide to the contracting officer a written 

explanation if the offeror or bidder fails to acquire 

articles, equipment, supplies, services, or materials or 

obtain the performance of construction work as 

described in clause (i).’’. 

PART III—ACQUISITION PROCESS 

SEC. 1331. RESERVATION OF PRIME CONTRACT AWARDS FOR SMALL 

BUSINESSES. 

Section 15 of the Small Business Act (15 U.S.C. 644), as 

amended by this Act, is amended by adding at the end the following: 

‘‘(r) MULTIPLE AWARD CONTRACTS.—Not later than 1 year after 

the date of enactment of this subsection, the Administrator for 

Federal Procurement Policy and the Administrator, in consultation 

with the Administrator of General Services, shall, by regulation, 

establish guidance under which Federal agencies may, at their 

discretion— 

‘‘(1) set aside part or parts of a multiple award contract 

for small business concerns, including the subcategories of small 

business concerns identified in subsection (g)(2); 

‘‘(2) notwithstanding the fair opportunity requirements 

under section 2304c(b) of title 10, United States Code, and 

section 303J(b) of the Federal Property and Administrative 

Services Act of 1949 (41 U.S.C. 253j(b)), set aside orders placed 

against multiple award contracts for small business concerns, 

including the subcategories of small business concerns identified in subsection (g)(2); and 

‘‘(3) reserve 1 or more contract awards for small business 

concerns under full and open multiple award procurements, 

including the subcategories of small business concerns identified in subsection (g)(2).’’. 

SEC. 1332. MICRO-PURCHASE GUIDELINES. 

Not later than 1 year after the date of enactment of this 

Act, the Director of the Office of Management and Budget, in 

coordination with the Administrator of General Services, shall issue 

guidelines regarding the analysis of purchase card expenditures 

to identify opportunities for achieving and accurately measuring 

fair participation of small business concerns in purchases in an 

amount not in excess of the micro-purchase threshold, as defined 

in section 32 of the Office of Federal Procurement Policy Act (41 

U.S.C. 428) (in this section referred to as ‘‘micro-purchases’’), consistent with the national policy on small business participation 

in Federal procurements set forth in sections 2(a) and 15(g) of 

the Small Business Act (15 U.S.C. 631(a) and 644(g)), and dissemination of best practices for participation of small business concerns 

in micro-purchases. 
H. R. 5297—39 

SEC. 1333. AGENCY ACCOUNTABILITY. 

Section 15(g)(2) of the Small Business Act (15 U.S.C. 644(g)(2)) 

is amended— 

(1) by inserting ‘‘(A)’’ after ‘‘(2)’’; 

(2) by striking ‘‘Goals established’’ and inserting the following: 

‘‘(B) Goals established’’; 

(3) by striking ‘‘Whenever’’ and inserting the following: 

‘‘(C) Whenever’’; 

(4) by striking ‘‘For the purpose of’’ and inserting the following: 

‘‘(D) For the purpose of’’; 

(5) by striking ‘‘The head of each Federal agency, in 

attempting to attain such participation’’ and inserting the following: 

‘‘(E) The head of each Federal agency, in attempting to attain 

the participation described in subparagraph (D)’’. 

(6) in subparagraph (E), as so designated— 

(A) by striking ‘‘(A) contracts’’ and inserting ‘‘(i) contracts’’; and 

(B) by striking ‘‘(B) contracts’’ and inserting ‘‘(ii) contracts’’; and 

(7) by adding at the end the following: 

‘‘(F)(i) Each procurement employee or program manager 

described in clause (ii) shall communicate to the subordinates of 

the procurement employee or program manager the importance 

of achieving small business goals. 

‘‘(ii) A procurement employee or program manager described 

in this clause is a senior procurement executive, senior program 

manager, or Director of Small and Disadvantaged Business Utilization of a Federal agency having contracting authority.’’. 

SEC. 1334. PAYMENT OF SUBCONTRACTORS. 

Section 8(d) of the Small Business Act (15 U.S.C. 637(d)) is 

amended by adding at the end the following: 

‘‘(12) PAYMENT OF SUBCONTRACTORS.— 

‘‘(A) DEFINITION.—In this paragraph, the term ‘covered contract’ means a contract relating to which a prime contractor 

is required to develop a subcontracting plan under paragraph 

(4) or (5). 

‘‘(B) NOTICE.— 

‘‘(i) IN GENERAL.—A prime contractor for a covered 

contract shall notify in writing the contracting officer for 

the covered contract if the prime contractor pays a reduced 

price to a subcontractor for goods and services upon completion of the responsibilities of the subcontractor or the payment to a subcontractor is more than 90 days past due 

for goods or services provided for the covered contract 

for which the Federal agency has paid the prime contractor. 

‘‘(ii) CONTENTS.—A prime contractor shall include the 

reason for the reduction in a payment to or failure to 

pay a subcontractor in any notice made under clause (i). 

‘‘(C) PERFORMANCE.—A contracting officer for a covered 

contract shall consider the unjustified failure by a prime contractor to make a full or timely payment to a subcontractor 

in evaluating the performance of the prime contractor. 
H. R. 5297—40 

‘‘(D) CONTROL OF FUNDS.—If the contracting officer for a 

covered contract determines that a prime contractor has a 

history of unjustified, untimely payments to contractors, the 

contracting officer shall record the identity of the contractor 

in accordance with the regulations promulgated under subparagraph (E). 

‘‘(E) REGULATIONS.—Not later than 1 year after the date 

of enactment of this paragraph, the Federal Acquisition Regulatory Council established under section 25(a) of the Office 

of Federal Procurement Policy Act (41 U.S.C. 421(a)) shall 

amend the Federal Acquisition Regulation issued under section 

25 of such Act to— 

‘‘(i) describe the circumstances under which a contractor may be determined to have a history of unjustified, 

untimely payments to subcontractors; 

‘‘(ii) establish a process for contracting officers to record 

the identity of a contractor described in clause (i); and 

‘‘(iii) require the identity of a contractor described in 

clause (i) to be incorporated in, and made publicly available 

through, the Federal Awardee Performance and Integrity 

Information System, or any successor thereto.’’. 

SEC. 1335. REPEAL OF SMALL BUSINESS COMPETITIVENESS DEMONSTRATION PROGRAM. 

(a) IN GENERAL.—The Business Opportunity Development 

Reform Act of 1988 (Public Law 100–656) is amended by striking 

title VII (15 U.S.C. 644 note). 

(b) EFFECTIVE DATE AND APPLICABILITY.—The amendment 

made by this section— 

(1) shall take effect on the date of enactment of this Act; 

and 

(2) apply to the first full fiscal year after the date of 

enactment of this Act. 

PART IV—SMALL BUSINESS SIZE AND STATUS 

INTEGRITY 

SEC. 1341. POLICY AND PRESUMPTIONS. 

Section 3 of the Small Business Act (15 U.S.C. 632), as amended 

by section 1311, is amended by adding at the end the following: 

‘‘(w) PRESUMPTION.— 

‘‘(1) IN GENERAL.—In every contract, subcontract, cooperative agreement, cooperative research and development agreement, or grant which is set aside, reserved, or otherwise classified as intended for award to small business concerns, there 

shall be a presumption of loss to the United States based 

on the total amount expended on the contract, subcontract, 

cooperative agreement, cooperative research and development 

agreement, or grant whenever it is established that a business 

concern other than a small business concern willfully sought 

and received the award by misrepresentation. 

‘‘(2) DEEMED CERTIFICATIONS.—The following actions shall 

be deemed affirmative, willful, and intentional certifications 

of small business size and status: 

‘‘(A) Submission of a bid or proposal for a Federal 

grant, contract, subcontract, cooperative agreement, or 

cooperative research and development agreement reserved, 
H. R. 5297—41 

set aside, or otherwise classified as intended for award 

to small business concerns. 

‘‘(B) Submission of a bid or proposal for a Federal 

grant, contract, subcontract, cooperative agreement, or 

cooperative research and development agreement which 

in any way encourages a Federal agency to classify the 

bid or proposal, if awarded, as an award to a small business 

concern. 

‘‘(C) Registration on any Federal electronic database 

for the purpose of being considered for award of a Federal 

grant, contract, subcontract, cooperative agreement, or 

cooperative research agreement, as a small business concern. 

‘‘(3) CERTIFICATION BY SIGNATURE OF RESPONSIBLE OFFICIAL.— 

‘‘(A) IN GENERAL.—Each solicitation, bid, or application 

for a Federal contract, subcontract, or grant shall contain 

a certification concerning the small business size and status 

of a business concern seeking the Federal contract, subcontract, or grant. 

‘‘(B) CONTENT OF CERTIFICATIONS.—A certification that 

a business concern qualifies as a small business concern 

of the exact size and status claimed by the business concern 

for purposes of bidding on a Federal contract or subcontract, or applying for a Federal grant, shall contain 

the signature of an authorized official on the same page 

on which the certification is contained. 

‘‘(4) REGULATIONS.—The Administrator shall promulgate 

regulations to provide adequate protections to individuals and 

business concerns from liability under this subsection in cases 

of unintentional errors, technical malfunctions, and other 

similar situations.’’. 

SEC. 1342. ANNUAL CERTIFICATION. 

Section 3 of the Small Business Act (15 U.S.C. 632), as amended 

by section 1341, is amended by adding at the end the following: 

‘‘(x) ANNUAL CERTIFICATION.— 

‘‘(1) IN GENERAL.—Each business certified as a small business concern under this Act shall annually certify its small 

business size and, if appropriate, its small business status, 

by means of a confirming entry on the Online Representations 

and Certifications Application database of the Administration, 

or any successor thereto. 

‘‘(2) REGULATIONS.—Not later than 1 year after the date 

of enactment of this subsection, the Administrator, in consultation with the Inspector General and the Chief Counsel for 

Advocacy of the Administration, shall promulgate regulations 

to ensure that— 

‘‘(A) no business concern continues to be certified as 

a small business concern on the Online Representations 

and Certifications Application database of the Administration, or any successor thereto, without fulfilling the requirements for annual certification under this subsection; and 

‘‘(B) the requirements of this subsection are implemented in a manner presenting the least possible regulatory burden on small business concerns.’’. 
H. R. 5297—42 

SEC. 1343. TRAINING FOR CONTRACTING AND ENFORCEMENT PERSONNEL. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, the Federal Acquisition Institute, in consultation 

with the Administrator for Federal Procurement Policy, the Defense 

Acquisition University, and the Administrator, shall develop courses 

for acquisition personnel concerning proper classification of business 

concerns and small business size and status for purposes of Federal 

contracts, subcontracts, grants, cooperative agreements, and 

cooperative research and development agreements. 

(b) POLICY ON PROSECUTIONS OF SMALL BUSINESS SIZE AND

STATUS FRAUD.—Section 3 of the Small Business Act (15 U.S.C. 

632), as amended by section 1342, is amended by adding at the 

end the following: 

‘‘(y) POLICY ON PROSECUTIONS OF SMALL BUSINESS SIZE AND

STATUS FRAUD.—Not later than 1 year after the date of enactment 

of this subsection, the Administrator, in consultation with the 

Attorney General, shall issue a Government-wide policy on prosecution of small business size and status fraud, which shall direct 

Federal agencies to appropriately publicize the policy.’’. 

SEC. 1344. UPDATED SIZE STANDARDS. 

(a) ROLLING REVIEW.— 

(1) IN GENERAL.—The Administrator shall— 

(A) during the 18-month period beginning on the date 

of enactment of this Act, and during every 18-month period 

thereafter, conduct a detailed review of not less than 1⁄3

of the size standards for small business concerns established under section 3(a)(2) of the Small Business Act (15 

U.S.C. 632(a)(2)), which shall include holding not less than 

2 public forums located in different geographic regions 

of the United States; 

(B) after completing each review under subparagraph 

(A) make appropriate adjustments to the size standards 

established under section 3(a)(2) of the Small Business 

Act to reflect market conditions; 

(C) make publicly available— 

(i) information regarding the factors evaluated as 

part of each review conducted under subparagraph 

(A); and 

(ii) information regarding the criteria used for any 

revised size standards promulgated under subparagraph (B); and 

(D) not later than 30 days after the date on which 

the Administrator completes each review under subparagraph (A), submit to the Committee on Small Business 

and Entrepreneurship of the Senate and the Committee 

on Small Business of the House of Representatives and 

make publicly available a report regarding the review, 

including why the Administrator— 

(i) used the factors and criteria described in 

subparagraph (C); and 

(ii) adjusted or did not adjust each size standard 

that was reviewed under the review. 

(2) COMPLETE REVIEW OF SIZE STANDARDS.—The Administrator shall ensure that each size standard for small business 

concerns established under section 3(a)(2) of the Small Business 
H. R. 5297—43 

Act (15 U.S.C. 632(a)(2)) is reviewed under paragraph (1) not 

less frequently than once every 5 years. 

(b) RULES.—Not later than 1 year after the date of enactment 

of this Act, the Administrator shall promulgate rules for conducting 

the reviews required under subsection (a). 

SEC. 1345. STUDY AND REPORT ON THE MENTOR-PROTEGE PROGRAM. 

(a) IN GENERAL.—The Comptroller General of the United States 

shall conduct a study of the mentor-protege program of the Administration for small business concerns participating in programs under 

section 8(a) of the Small Business Act (15 U.S.C. 637(a)), and 

other relationships and strategic alliances pairing a larger business 

and a small business concern partner to gain access to Federal 

Government contracts, to determine whether the programs and 

relationships are effectively supporting the goal of increasing the 

participation of small business concerns in Government contracting. 

(b) MATTERS TO BE STUDIED.—The study conducted under this 

section shall include— 

(1) a review of a broad cross-section of industries; and 

(2) an evaluation of— 

(A) how each Federal agency carrying out a program 

described in subsection (a) administers and monitors the 

program; 

(B) whether there are systems in place to ensure that 

the mentor-protege relationship, or similar affiliation, promotes real gain to the protege, and is not just a mechanism 

to enable participants that would not otherwise qualify 

under section 8(a) of the Small Business Act (15 U.S.C. 

637(a)) to receive contracts under that section; and 

(C) the degree to which protege businesses become 

able to compete for Federal contracts without the assistance 

of a mentor. 

(c) REPORT TO CONGRESS.—Not later than 180 days after the 

date of enactment of this Act, the Comptroller General shall submit 

to the Committee on Small Business and Entrepreneurship of the 

Senate and the Committee on Small Business of the House of 

Representatives a report on the results of the study conducted 

under this section. 

SEC. 1346. CONTRACTING GOALS REPORTS. 

Section 15(h)(2) of the Small Business Act (15 U.S.C. 644(h)(2)) 

is amended by striking ‘‘submit them’’ and all that follows through 

‘‘the following:’’ and inserting ‘‘submit to the President and the 

Committee on Small Business and Entrepreneurship of the Senate 

and the Committee on Small Business of the House of Representatives the compilation and analysis, which shall include the following:’’. 

SEC. 1347. SMALL BUSINESS CONTRACTING PARITY. 

(a) DEFINITIONS.—In this section— 

(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ mean 

the Small Business Administration and the Administrator 

thereof, respectively; and 

(2) the terms ‘‘HUBZone small business concern’’, ‘‘small 

business concern’’, ‘‘small business concern owned and controlled by service-disabled veterans’’, and ‘‘small business concern owned and controlled by women’’ have the same meanings 

as in section 3 of the Small Business Act (15 U.S.C. 632). 
H. R. 5297—44 

(b) CONTRACTING IMPROVEMENTS.— (1) CONTRACTING OPPORTUNITIES.—Section 31(b)(2)(B) of 

the Small Business Act (15 U.S.C. 657a(b)(2)(B)) is amended 

by striking ‘‘shall’’ and inserting ‘‘may’’. 

(2) CONTRACTING GOALS.—Section 15(g)(1) of the Small 

Business Act (15 U.S.C. 644(g)(1)) is amended in the fourth 

sentence by inserting ‘‘and subcontract’’ after ‘‘not less than 

3 percent of the total value of all prime contract’’. 

(3) MENTOR-PROTEGE PROGRAMS.—The Administrator may 

establish mentor-protege programs for small business concerns 

owned and controlled by service-disabled veterans, small business concerns owned and controlled by women, and HUBZone 

small business concerns modeled on the mentor-protege program of the Administration for small business concerns participating in programs under section 8(a) of the Small Business 

Act (15 U.S.C. 637(a)). 

(c) SMALL BUSINESS CONTRACTING PROGRAMS PARITY.—Section 

31(b)(2) of the Small Business Act (15 U.S.C. 657a(b)(2)) is 

amended— 

(1) in the matter preceding subparagraph (A), by striking 

‘‘Notwithstanding any other provision of law—’’; 

(2) in subparagraph (A)— 

(A) in the matter preceding clause (i), by striking ‘‘a 

contracting’’ and inserting ‘‘SOLE SOURCE CONTRACTS.—A 

contracting’’; and 

(B) in clause (iii), by striking the semicolon at the 

end and inserting a period; 

(3) in subparagraph (B)— 

(A) by striking ‘‘a contract opportunity shall’’ and 

inserting ‘‘RESTRICTED COMPETITION.—A contract opportunity may’’; and 

(B) by striking ‘‘; and’’ and inserting a period; and 

(4) in subparagraph (C), by striking ‘‘not later’’ and 

inserting ‘‘APPEALS.—Not later’’. 

Subtitle D—Small Business Management 

and Counseling Assistance 

SEC. 1401. MATCHING REQUIREMENTS UNDER SMALL BUSINESS PROGRAMS. 

(a) MICROLOAN PROGRAM.—Section 7(m) of the Small Business 

Act (15 U.S.C. 636(m)) is amended— 

(1) in paragraph (3)(B)— 

(A) by striking ‘‘As a condition’’ and inserting the following: 

‘‘(i) IN GENERAL.—Subject to clause (ii), as a condition’’; 

(B) by striking ‘‘the Administration’’ and inserting ‘‘the 

Administrator’’; and 

(C) by adding at the end the following: 

‘‘(ii) WAIVER OF NON-FEDERAL SHARE.— ‘‘(I) IN GENERAL.—Upon request by an intermediary, and in accordance with this clause, the 

Administrator may waive, in whole or in part, 

the requirement to obtain non-Federal funds under 

clause (i) for a fiscal year. The Administrator may 
H. R. 5297—45 

waive the requirement to obtain non-Federal funds 

under this clause for successive fiscal years. 

‘‘(II) CONSIDERATIONS.—In determining 

whether to waive the requirement to obtain nonFederal funds under this clause, the Administrator 

shall consider— 

‘‘(aa) the economic conditions affecting the 

intermediary; 

‘‘(bb) the impact a waiver under this 

clause would have on the credibility of the 

microloan program under this subsection; 

‘‘(cc) the demonstrated ability of the intermediary to raise non-Federal funds; and 

‘‘(dd) the performance of the intermediary. 

‘‘(III) LIMITATIONS.— 

‘‘(aa) IN GENERAL.—The Administrator 

may not waive the requirement to obtain nonFederal funds under this clause if granting 

the waiver would undermine the credibility 

of the microloan program under this subsection. 

‘‘(bb) SUNSET.—The Administrator may 

not waive the requirement to obtain non-Federal funds under this clause for fiscal year 

2013 or any fiscal year thereafter.’’; and 

(2) in paragraph (4)(B)— 

(A) by striking ‘‘As a condition’’ and all that follows 

through ‘‘the Administration shall require’’ and inserting 

the following: 

‘‘(i) IN GENERAL.—Subject to clause (ii), as a condition of a grant made under subparagraph (A), the 

Administrator shall require’’; and 

(B) by adding at the end the following: 

‘‘(ii) WAIVER OF NON-FEDERAL SHARE.— ‘‘(I) IN GENERAL.—Upon request by an intermediary, and in accordance with this clause, the 

Administrator may waive, in whole or in part, 

the requirement to obtain non-Federal funds under 

clause (i) for a fiscal year. The Administrator may 

waive the requirement to obtain non-Federal funds 

under this clause for successive fiscal years. 

‘‘(II) CONSIDERATIONS.—In determining 

whether to waive the requirement to obtain nonFederal funds under this clause, the Administrator 

shall consider— 

‘‘(aa) the economic conditions affecting the 

intermediary; 

‘‘(bb) the impact a waiver under this 

clause would have on the credibility of the 

microloan program under this subsection; 

‘‘(cc) the demonstrated ability of the intermediary to raise non-Federal funds; and 

‘‘(dd) the performance of the intermediary. 

‘‘(III) LIMITATIONS.— ‘‘(aa) IN GENERAL.—The Administrator 

may not waive the requirement to obtain nonFederal funds under this clause if granting 
H. R. 5297—46 

the waiver would undermine the credibility 

of the microloan program under this subsection. 

‘‘(bb) SUNSET.—The Administrator may 

not waive the requirement to obtain non-Federal funds under this clause for fiscal year 

2013 or any fiscal year thereafter.’’. 

(b) WOMEN’S BUSINESS CENTER PROGRAM.—Section 29(c) of the 

Small Business Act (15 U.S.C. 656(c)) is amended— 

(1) in paragraph (1), by striking ‘‘As a condition’’ and 

inserting ‘‘Subject to paragraph (5), as a condition’’; and 

(2) by adding at the end the following: 

‘‘(5) WAIVER OF NON-FEDERAL SHARE RELATING TO TECHNICAL ASSISTANCE AND COUNSELING.— 

‘‘(A) IN GENERAL.—Upon request by a recipient 

organization, and in accordance with this paragraph, the 

Administrator may waive, in whole or in part, the requirement to obtain non-Federal funds under this subsection 

for the technical assistance and counseling activities of 

the recipient organization carried out using financial assistance under this section for a fiscal year. The Administrator 

may waive the requirement to obtain non-Federal funds 

under this paragraph for successive fiscal years. 

‘‘(B) CONSIDERATIONS.—In determining whether to 

waive the requirement to obtain non-Federal funds under 

this paragraph, the Administrator shall consider— 

‘‘(i) the economic conditions affecting the recipient 

organization; 

‘‘(ii) the impact a waiver under this clause would 

have on the credibility of the women’s business center 

program under this section; 

‘‘(iii) the demonstrated ability of the recipient 

organization to raise non-Federal funds; and 

‘‘(iv) the performance of the recipient organization. 

‘‘(C) LIMITATIONS.— ‘‘(i) IN GENERAL.—The Administrator may not 

waive the requirement to obtain non-Federal funds 

under this paragraph if granting the waiver would 

undermine the credibility of the women’s business 

center program under this section. 

‘‘(ii) SUNSET.—The Administrator may not waive 

the requirement to obtain non-Federal funds under 

this paragraph for fiscal year 2013 or any fiscal year 

thereafter.’’. 

(c) PROSPECTIVE REPEALS.—Effective October 1, 2012, the Small 

Business Act (15 U.S.C. 631 et seq.) is amended— 

(1) in section 7(m) (15 U.S.C. 636(m))— 

(A) in paragraph (3)(B)— 

(i) by striking ‘‘INTERMEDIARY CONTRIBUTION.—’’ 

and all that follows through ‘‘Subject to clause (ii), 

as’’ and inserting ‘‘INTERMEDIARY CONTRIBUTION.—As’’; 

and 

(ii) by striking clause (ii); and 

(B) in paragraph (4)(B)— 

(i) by striking ‘‘CONTRIBUTION.—’’ and all that follows through ‘‘Subject to clause (ii), as’’ and inserting 

‘‘CONTRIBUTION.—As’’; and 
H. R. 5297—47 

(ii) by striking clause (ii); and 

(2) in section 29(c) (15 U.S.C. 656(c))— 

(A) in paragraph (1), by striking ‘‘Subject to paragraph 

(5), as’’ and inserting ‘‘As’’; and 

(B) by striking paragraph (5). 

SEC. 1402. GRANTS FOR SBDCS. 

(a) IN GENERAL.—The Administrator may make grants to small 

business development centers under section 21 of the Small Business Act (15 U.S.C. 648) to provide targeted technical assistance 

to small business concerns seeking access to capital or credit, Federal procurement opportunities, energy efficiency audits to reduce 

energy bills, opportunities to export products or provide services 

to foreign customers, adopting, making innovations in, and using 

broadband technologies, or other assistance. 

(b) ALLOCATION.— 

(1) IN GENERAL.—Subject to paragraph (2), and notwithstanding the requirements of section 21(a)(4)(C)(iii) of the Small 

Business Act (15 U.S.C. 648(a)(4)(C)(iii)), the amount appropriated to carry out this section shall be allocated under the 

formula under section 21(a)(4)(C)(i) of that Act. 

(2) MINIMUM FUNDING.—The amount made available under 

this section to each State shall be not less than $325,000. 

(3) TYPES OF USES.—Of the total amount of the grants 

awarded by the Administrator under this section— 

(A) not less than 80 percent shall be used for counseling 

of small business concerns; and 

(B) not more than 20 percent may be used for classes 

or seminars. 

(c) NO NON-FEDERAL SHARE REQUIRED.—Notwithstanding section 21(a)(4)(A) of the Small Business Act (15 U.S.C. 648(a)(4)(A)), 

the recipient of a grant made under this section shall not be 

required to provide non-Federal matching funds. 

(d) DISTRIBUTION.—Not later than 30 days after the date on 

which amounts are appropriated to carry out this section, the 

Administrator shall disburse the total amount appropriated. 

(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 

to be appropriated to the Administrator $50,000,000 to carry out 

this section. 

Subtitle E—Disaster Loan Improvement 

SEC. 1501. AQUACULTURE BUSINESS DISASTER ASSISTANCE. 

Section 3 of the Small Business Act (15 U.S.C. 632), as amended 

by section 1343, is amended by adding at the end the following: 

‘‘(z) AQUACULTURE BUSINESS DISASTER ASSISTANCE.—Subject 

to section 18(a) and notwithstanding section 18(b)(1), the Administrator may provide disaster assistance under section 7(b)(2) to aquaculture enterprises that are small businesses.’’. 
H. R. 5297—48 

Subtitle F—Small Business Regulatory 

Relief 

SEC. 1601. REQUIREMENTS PROVIDING FOR MORE DETAILED ANALYSES. 

Section 604(a) of title 5, United States Code, is amended— 

(1) in paragraph (1), by striking ‘‘succinct’’; 

(2) in paragraph (2), by striking ‘‘summary’’ each place 

it appears and inserting ‘‘statement’’; 

(3) by redesignating paragraphs (3), (4), and (5) as paragraphs (4), (5), and (6), respectively; and 

(4) by inserting after paragraph (2) the following: 

‘‘(3) the response of the agency to any comments filed 

by the Chief Counsel for Advocacy of the Small Business 

Administration in response to the proposed rule, and a detailed 

statement of any change made to the proposed rule in the 

final rule as a result of the comments;’’. 

SEC. 1602. OFFICE OF ADVOCACY. 

(a) IN GENERAL.—Section 203 of Public Law 94–305 (15 U.S.C. 

634c) is amended— 

(1) in paragraph (4), by striking ‘‘and’’ at the end; 

(2) in paragraph (5), by striking the period and inserting 

‘‘; and’’; and 

(3) by adding at the end the following: 

‘‘(6) carry out the responsibilities of the Office of Advocacy 

under chapter 6 of title 5, United States Code.’’. 

(b) BUDGETARY LINE ITEM AND AUTHORIZATION OF APPROPRIATIONS.—Title II of Public Law 94–305 (15 U.S.C. 634a et seq.) 

is amended by striking section 207 and inserting the following: 

‘‘SEC. 207. BUDGETARY LINE ITEM AND AUTHORIZATION OF APPROPRIATIONS. 

‘‘(a) APPROPRIATION REQUESTS.—Each budget of the United 

States Government submitted by the President under section 1105 

of title 31, United States Code, shall include a separate statement 

of the amount of appropriations requested for the Office of Advocacy 

of the Small Business Administration, which shall be designated 

in a separate account in the General Fund of the Treasury. 

‘‘(b) ADMINISTRATIVE OPERATIONS.—The Administrator of the 

Small Business Administration shall provide the Office of Advocacy 

with appropriate and adequate office space at central and field 

office locations, together with such equipment, operating budget, 

and communications facilities and services as may be necessary, 

and shall provide necessary maintenance services for such offices 

and the equipment and facilities located in such offices. 

‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 

to be appropriated such sums as are necessary to carry out this 

title. Any amount appropriated under this subsection shall remain 

available, without fiscal year limitation, until expended.’’. 
H. R. 5297—49 

Subtitle G—Appropriations Provisions 

SEC. 1701. SALARIES AND EXPENSES. 

(a) APPROPRIATION.—There is appropriated, out of any money 

in the Treasury not otherwise appropriated, for the fiscal year 

ending September 30, 2010, $150,000,000, to remain available until 

September 30, 2012, for an additional amount for the appropriations 

account appropriated under the heading ‘‘SALARIES AND EXPENSES’’ 

under the heading ‘‘SMALL BUSINESS ADMINISTRATION’’, of which— 

(1) $50,000,000 is for grants to small business development 

centers authorized under section 1402; 

(2) $1,000,000 is for the costs of administering grants 

authorized under section 1402; 

(3) $30,000,000 is for grants to States for fiscal year 2011 

to carry out export programs that assist small business concerns 

authorized under section 1207; 

(4) $30,000,000 is for grants to States for fiscal year 2012 

to carry out export programs that assist small business concerns 

authorized under section 1207; 

(5) $2,500,000 is for the costs of administering grants 

authorized under section 1207; 

(6) $5,000,000 is for grants for fiscal year 2011 under 

the Small Business Teaming Pilot Program under section 1314; 

and 

(7) $5,000,000 is for grants for fiscal year 2012 under 

the Small Business Teaming Pilot Program under section 1314. 

(b) REPORT.—Not later than 60 days after the date of enactment 

of this Act, the Administrator shall submit to the Committee on 

Appropriations of the Senate and the Committee on Appropriations 

of the House of Representatives a detailed expenditure plan for 

using the funds provided under subsection (a). 

SEC. 1702. BUSINESS LOANS PROGRAM ACCOUNT. 

(a) IN GENERAL.—There is appropriated, out of any money 

in the Treasury not otherwise appropriated, for the fiscal year 

ending September 30, 2010, for an additional amount for the appropriations account appropriated under the heading ‘‘BUSINESS LOANS

PROGRAM ACCOUNT’’ under the heading ‘‘SMALL BUSINESS ADMINISTRATION’’— 

(1) $8,000,000, to remain available until September 30, 

2012, for fiscal year 2011 for the cost of direct loans authorized 

under section 7(l) of the Small Business Act, as added by 

section 1131 of this title, including the cost of modifying the 

loans; 

(2) $8,000,000, to remain available until September 30, 

2012, for fiscal year 2012 for the cost of direct loans authorized 

under section 7(l) of the Small Business Act, as added by 

section 1131 of this title, including the cost of modifying the 

loans; 

(3) $6,500,000, to remain available until September 30, 

2012, for administrative expenses to carry out the direct loan 

program authorized under section 7(l) of the Small Business 

Act, as added by section 1131 of this title, which may be 

transferred to and merged with the appropriations account 

appropriated under the heading ‘‘SALARIES AND EXPENSES’’ 

under the heading ‘‘SMALL BUSINESS ADMINISTRATION’’; and 
H. R. 5297—50 

(4) $15,000,000, to remain available until September 30, 

2011, for the cost of guaranteed loans as authorized under 

section 7(a) of the Small Business Act, including the cost of 

modifying the loans. 

(b) DEFINITION.—In this section, the term ‘‘cost’’ has the 

meaning given that term in section 502 of the Congressional Budget 

Act of 1974. 

SEC. 1703. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS 

FUND PROGRAM ACCOUNT. 

There is appropriated, out of any money in the Treasury not 

otherwise appropriated, for the fiscal year ending September 30, 

2010, for an additional amount for the appropriations account appropriated under the heading ‘‘COMMUNITY DEVELOPMENT FINANCIAL

INSTITUTIONS FUND PROGRAM ACCOUNT’’ under the heading 

‘‘DEPARTMENT OF THE TREASURY’’, $13,500,000, to remain 

available until September 30, 2012, for the costs of administering 

guarantees for bonds and notes as authorized under section 114A 

of the Riegle Community Development and Regulatory Improvement 

Act of 1994, as added by section 1134 of this Act. 

SEC. 1704. SMALL BUSINESS LOAN GUARANTEE ENHANCEMENT EXTENSIONS. 

(a) EXTENSION OF PROGRAMS.— 

(1) IN GENERAL.—There is appropriated, out of any funds 

in the Treasury not otherwise appropriated, for an additional 

amount for ‘‘Small Business Administration—Business Loans 

Program Account’’, $505,000,000, to remain available through 

December 31, 2010, for the cost of— 

(A) fee reductions and eliminations under section 501 

of division A of the American Recovery and Reinvestment 

Act of 2009 (Public Law 111–5; 123 Stat. 151), as amended 

by this Act; and 

(B) loan guarantees under section 502 of division A 

of the American Recovery and Reinvestment Act of 2009 

(Public Law 111–5; 123 Stat. 152), as amended by this 

Act. 

(2) COST.—For purposes of this subsection, the term ‘‘cost’’ 

has the same meaning as in section 502 of the Congressional 

Budget Act of 1974 (2 U.S.C. 661a). 

(b) ADMINISTRATIVE EXPENSES.—There is appropriated for an 

additional amount, out of any funds in the Treasury not otherwise 

appropriated, for administrative expenses to carry out sections 501 

and 502 of division A of the American Recovery and Reinvestment 

Act of 2009 (Public Law 111–5), $5,000,000, to remain available 

until expended, which may be transferred and merged with the 

appropriation for ‘‘Small Business Administration—Salaries and 

Expenses’’. 

TITLE II—TAX PROVISIONS 

SEC. 2001. SHORT TITLE. 

This title may be cited as the ‘‘Creating Small Business Jobs 

Act of 2010’’. 
H. R. 5297—51 

Subtitle A—Small Business Relief 

PART I—PROVIDING ACCESS TO CAPITAL 

SEC. 2011. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON CERTAIN SMALL BUSINESS STOCK. 

(a) IN GENERAL.—Subsection (a) of section 1202 of the Internal 

Revenue Code of 1986 is amended by adding at the end the following 

new paragraph: 

‘‘(4) 100 PERCENT EXCLUSION FOR STOCK ACQUIRED DURING

CERTAIN PERIODS IN 2010.—In the case of qualified small business stock acquired after the date of the enactment of the 

Creating Small Business Jobs Act of 2010 and before January 

1, 2011— 

‘‘(A) paragraph (1) shall be applied by substituting 

‘100 percent’ for ‘50 percent’, 

‘‘(B) paragraph (2) shall not apply, and 

‘‘(C) paragraph (7) of section 57(a) shall not apply.’’. 

(b) CONFORMING AMENDMENT.—Paragraph (3) of section 1202(a) 

of the Internal Revenue Code of 1986 is amended— 

(1) by inserting ‘‘CERTAIN PERIODS IN’’ before ‘‘2010’’ in the 

heading, and 

(2) by striking ‘‘before January 1, 2011’’ and inserting ‘‘on 

or before the date of the enactment of the Creating Small 

Business Jobs Act of 2010’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to stock acquired after the date of the enactment of 

this Act. 

SEC. 2012. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL 

BUSINESSES FOR 2010 CARRIED BACK 5 YEARS. 

(a) IN GENERAL.—Section 39(a) of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new paragraph: 

‘‘(4) 5-YEAR CARRYBACK FOR ELIGIBLE SMALL BUSINESS

CREDITS.— 

‘‘(A) IN GENERAL.—Notwithstanding subsection (d), in 

the case of eligible small business credits determined in 

the first taxable year of the taxpayer beginning in 2010— 

‘‘(i) paragraph (1) shall be applied by substituting 

‘each of the 5 taxable years’ for ‘the taxable year’ 

in subparagraph (A) thereof, and 

‘‘(ii) paragraph (2) shall be applied— 

‘‘(I) by substituting ‘25 taxable years’ for ‘21 

taxable years’ in subparagraph (A) thereof, and 

‘‘(II) by substituting ‘24 taxable years’ for ‘20 

taxable years’ in subparagraph (B) thereof. 

‘‘(B) ELIGIBLE SMALL BUSINESS CREDITS.—For purposes 

of this subsection, the term ‘eligible small business credits’ 

has the meaning given such term by section 38(c)(5)(B).’’. 

(b) CONFORMING AMENDMENT.—Section 39(a)(3)(A) of the 

Internal Revenue Code of 1986 is amended by inserting ‘‘or the 

eligible small business credits’’ after ‘‘credit)’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to credits determined in taxable years beginning after 

December 31, 2009. 
H. R. 5297—52 

SEC. 2013. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL 

BUSINESSES IN 2010 NOT SUBJECT TO ALTERNATIVE MINIMUM TAX. 

(a) IN GENERAL.—Section 38(c) of the Internal Revenue Code 

of 1986 is amended by redesignating paragraph (5) as paragraph 

(6) and by inserting after paragraph (4) the following new paragraph: 

‘‘(5) SPECIAL RULES FOR ELIGIBLE SMALL BUSINESS CREDITS

IN 2010.— 

‘‘(A) IN GENERAL.—In the case of eligible small business 

credits determined in taxable years beginning in 2010— 

‘‘(i) this section and section 39 shall be applied 

separately with respect to such credits, and 

‘‘(ii) in applying paragraph (1) to such credits— 

‘‘(I) the tentative minimum tax shall be treated 

as being zero, and 

‘‘(II) the limitation under paragraph (1) (as 

modified by subclause (I)) shall be reduced by the 

credit allowed under subsection (a) for the taxable 

year (other than the eligible small business 

credits). 

‘‘(B) ELIGIBLE SMALL BUSINESS CREDITS.—For purposes 

of this subsection, the term ‘eligible small business credits’ 

means the sum of the credits listed in subsection (b) which 

are determined for the taxable year with respect to an 

eligible small business. Such credits shall not be taken 

into account under paragraph (2), (3), or (4). 

‘‘(C) ELIGIBLE SMALL BUSINESS.—For purposes of this 

subsection, the term ‘eligible small business’ means, with 

respect to any taxable year— 

‘‘(i) a corporation the stock of which is not publicly 

traded, 

‘‘(ii) a partnership, or 

‘‘(iii) a sole proprietorship, 

if the average annual gross receipts of such corporation, 

partnership, or sole proprietorship for the 3-taxable-year 

period preceding such taxable year does not exceed 

$50,000,000. For purposes of applying the test under the 

preceding sentence, rules similar to the rules of paragraphs 

(2) and (3) of section 448(c) shall apply. 

‘‘(D) TREATMENT OF PARTNERS AND S CORPORATION

SHAREHOLDERS.—Credits determined with respect to a partnership or S corporation shall not be treated as eligible 

small business credits by any partner or shareholder unless 

such partner or shareholder meets the gross receipts test 

under subparagraph (C) for the taxable year in which such 

credits are treated as current year business credits.’’. 

(b) TECHNICAL AMENDMENT.—Section 55(e)(5) of the Internal 

Revenue Code of 1986 is amended by striking ‘‘38(c)(3)(B)’’ and 

inserting ‘‘38(c)(6)(B)’’. 

(c) CONFORMING AMENDMENTS.— 

(1) Subclause (II) of section 38(c)(2)(A)(ii) of the Internal 

Revenue Code of 1986 is amended by inserting ‘‘the eligible 

small business credits,’’ after ‘‘the New York Liberty Zone business employee credit,’’. 
H. R. 5297—53 

(2) Subclause (II) of section 38(c)(3)(A)(ii) of such Code 

is amended by inserting ‘‘, the eligible small business credits,’’ 

after ‘‘the New York Liberty Zone business employee credit’’. 

(3) Subclause (II) of section 38(c)(4)(A)(ii) of such Code 

is amended by inserting ‘‘the eligible small business credits 

and’’ before ‘‘the specified credits’’. 

(d) EFFECTIVE DATE.—The amendments made by subsection 

(a) shall apply to credits determined in taxable years beginning 

after December 31, 2009, and to carrybacks of such credits. 

SEC. 2014. TEMPORARY REDUCTION IN RECOGNITION PERIOD FOR 

BUILT-IN GAINS TAX. 

(a) IN GENERAL.—Subparagraph (B) of section 1374(d)(7) of 

the Internal Revenue Code of 1986 is amended to read as follows: 

‘‘(B) SPECIAL RULES FOR 2009, 2010, AND 2011.—No tax 

shall be imposed on the net recognized built-in gain of 

an S corporation— 

‘‘(i) in the case of any taxable year beginning in 

2009 or 2010, if the 7th taxable year in the recognition 

period preceded such taxable year, or 

‘‘(ii) in the case of any taxable year beginning 

in 2011, if the 5th year in the recognition period preceded such taxable year. 

The preceding sentence shall be applied separately with 

respect to any asset to which paragraph (8) applies.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2010. 

PART II—ENCOURAGING INVESTMENT 

SEC. 2021. INCREASED EXPENSING LIMITATIONS FOR 2010 AND 2011; 

CERTAIN REAL PROPERTY TREATED AS SECTION 179 

PROPERTY. 

(a) INCREASED LIMITATIONS.—Subsection (b) of section 179 of 

the Internal Revenue Code of 1986 is amended— 

(1) by striking ‘‘shall not exceed’’ and all that follows in 

paragraph (1) and inserting ‘‘shall not exceed— ‘‘(A) $250,000 in the case of taxable years beginning 

after 2007 and before 2010, 

‘‘(B) $500,000 in the case of taxable years beginning 

in 2010 or 2011, and 

‘‘(C) $25,000 in the case of taxable years beginning 

after 2011.’’, and 

(2) by striking ‘‘exceeds’’ and all that follows in paragraph 

(2) and inserting ‘‘exceeds— ‘‘(A) $800,000 in the case of taxable years beginning 

after 2007 and before 2010, 

‘‘(B) $2,000,000 in the case of taxable years beginning 

in 2010 or 2011, and 

‘‘(C) $200,000 in the case of taxable years beginning 

after 2011.’’. 

(b) INCLUSION OF CERTAIN REAL PROPERTY.—Section 179 of 

the Internal Revenue Code of 1986 is amended by adding at the 

end the following new subsection: 

‘‘(f) SPECIAL RULES FOR QUALIFIED REAL PROPERTY.— 

‘‘(1) IN GENERAL.—If a taxpayer elects the application of 

this subsection for any taxable year beginning in 2010 or 2011, 
H. R. 5297—54 

the term ‘section 179 property’ shall include any qualified real 

property which is— 

‘‘(A) of a character subject to an allowance for depreciation, 

‘‘(B) acquired by purchase for use in the active conduct 

of a trade or business, and 

‘‘(C) not described in the last sentence of subsection 

(d)(1). 

‘‘(2) QUALIFIED REAL PROPERTY.—For purposes of this subsection, the term ‘qualified real property’ means— 

‘‘(A) qualified leasehold improvement property 

described in section 168(e)(6), 

‘‘(B) qualified restaurant property described in section 

168(e)(7) (without regard to the dates specified in subparagraph (A)(i) thereof), and 

‘‘(C) qualified retail improvement property described 

in section 168(e)(8) (without regard to subparagraph (E) 

thereof). 

‘‘(3) LIMITATION.—For purposes of applying the limitation 

under subsection (b)(1)(B), not more than $250,000 of the aggregate cost which is taken into account under subsection (a) 

for any taxable year may be attributable to qualified real property. 

‘‘(4) CARRYOVER LIMITATION.— 

‘‘(A) IN GENERAL.—Notwithstanding subsection 

(b)(3)(B), no amount attributable to qualified real property 

may be carried over to a taxable year beginning after 

2011. 

‘‘(B) TREATMENT OF DISALLOWED AMOUNTS.—Except as 

provided in subparagraph (C), to the extent that any 

amount is not allowed to be carried over to a taxable 

year beginning after 2011 by reason of subparagraph (A), 

this title shall be applied as if no election under this 

section had been made with respect to such amount. 

‘‘(C) AMOUNTS CARRIED OVER FROM 2010.—If subparagraph (B) applies to any amount (or portion of an amount) 

which is carried over from a taxable year other than the 

taxpayer’s last taxable year beginning in 2011, such 

amount (or portion of an amount) shall be treated for 

purposes of this title as attributable to property placed 

in service on the first day of the taxpayer’s last taxable 

year beginning in 2011. 

‘‘(D) ALLOCATION OF AMOUNTS.—For purposes of 

applying this paragraph and subsection (b)(3)(B) to any 

taxable year, the amount which is disallowed under subsection (b)(3)(A) for such taxable year which is attributed 

to qualified real property shall be the amount which bears 

the same ratio to the total amount so disallowed as— 

‘‘(i) the aggregate amount attributable to qualified 

real property placed in service during such taxable 

year, increased by the portion of any amount carried 

over to such taxable year from a prior taxable year 

which is attributable to such property, bears to 

‘‘(ii) the total amount of section 179 property placed 

in service during such taxable year, increased by the 

aggregate amount carried over to such taxable year 

from any prior taxable year. 
H. R. 5297—55 

For purposes of the preceding sentence, only section 179 

property with respect to which an election was made under 

subsection (c)(1) (determined without regard to subparagraph (B) of this paragraph) shall be taken into account.’’. 

(c) REVOCABILITY OF ELECTION.—Paragraph (2) of section 179(c) 

of the Internal Revenue Code of 1986 is amended by striking 

‘‘2011’’ and inserting ‘‘2012’’. 

(d) COMPUTER SOFTWARE TREATED AS 179 PROPERTY.—Clause 

(ii) of section 179(d)(1)(A) is amended by striking ‘‘2011’’ and 

inserting ‘‘2012’’. 

(e) EFFECTIVE DATES.— 

(1) IN GENERAL.—Except as provided in paragraph (2), the 

amendments made by this section shall apply to property placed 

in service after December 31, 2009, in taxable years beginning 

after such date. 

(2) EXTENSIONS.—The amendments made by subsections 

(c) and (d) shall apply to taxable years beginning after 

December 31, 2010. 

SEC. 2022. ADDITIONAL FIRST-YEAR DEPRECIATION FOR 50 PERCENT 

OF THE BASIS OF CERTAIN QUALIFIED PROPERTY. 

(a) IN GENERAL.—Paragraph (2) of section 168(k) of the Internal 

Revenue Code of 1986 is amended— 

(1) by striking ‘‘January 1, 2011’’ in subparagraph (A)(iv) 

and inserting ‘‘January 1, 2012’’, and 

(2) by striking ‘‘January 1, 2010’’ each place it appears 

and inserting ‘‘January 1, 2011’’. 

(b) CONFORMING AMENDMENTS.— 

(1) The heading for subsection (k) of section 168 of the 

Internal Revenue Code of 1986 is amended by striking 

‘‘JANUARY 1, 2010’’ and inserting ‘‘JANUARY 1, 2011’’. 

(2) The heading for clause (ii) of section 168(k)(2)(B) of 

such Code is amended by striking ‘‘PRE-JANUARY 1, 2010’’ and 

inserting ‘‘PRE-JANUARY 1, 2011’’. 

(3) Subparagraph (D) of section 168(k)(4) of such Code 

is amended by striking ‘‘and’’ at the end of clause (ii), by 

striking the period at the end of clause (iii) and inserting 

a comma, and by adding at the end the following new clauses: 

‘‘(iv) ‘January 1, 2011’ shall be substituted for 

‘January 1, 2012’ in subparagraph (A)(iv) thereof, and 

‘‘(v) ‘January 1, 2010’ shall be substituted for 

‘January 1, 2011’ each place it appears in subparagraph (A) thereof.’’. 

(4) Subparagraph (B) of section 168(l)(5) of such Code is 

amended by striking ‘‘January 1, 2010’’ and inserting ‘‘January 

1, 2011’’. 

(5) Subparagraph (C) of section 168(n)(2) of such Code 

is amended by striking ‘‘January 1, 2010’’ and inserting 

‘‘January 1, 2011’’. 

(6) Subparagraph (D) of section 1400L(b)(2) of such Code 

is amended by striking ‘‘January 1, 2010’’ and inserting 

‘‘January 1, 2011’’. 

(7) Subparagraph (B) of section 1400N(d)(3) of such Code 

is amended by striking ‘‘January 1, 2010’’ and inserting 

‘‘January 1, 2011’’. 
H. R. 5297—56 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to property placed in service after December 31, 2009, 

in taxable years ending after such date. 

SEC. 2023. SPECIAL RULE FOR LONG-TERM CONTRACT ACCOUNTING. 

(a) IN GENERAL.—Section 460(c) of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new paragraph: 

‘‘(6) SPECIAL RULE FOR ALLOCATION OF BONUS DEPRECIATION

WITH RESPECT TO CERTAIN PROPERTY.— 

‘‘(A) IN GENERAL.—Solely for purposes of determining 

the percentage of completion under subsection (b)(1)(A), 

the cost of qualified property shall be taken into account 

as a cost allocated to the contract as if subsection (k) 

of section 168 had not been enacted. 

‘‘(B) QUALIFIED PROPERTY.—For purposes of this paragraph, the term ‘qualified property’ means property 

described in section 168(k)(2) which— 

‘‘(i) has a recovery period of 7 years or less, and 

‘‘(ii) is placed in service after December 31, 2009, 

and before January 1, 2011 (January 1, 2012, in the 

case of property described in section 168(k)(2)(B)).’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to property placed in service after December 31, 2009. 

PART III—PROMOTING ENTREPRENEURSHIP 

SEC. 2031. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR 

START-UP EXPENDITURES IN 2010. 

(a) START-UP EXPENDITURES.—Subsection (b) of section 195 of 

the Internal Revenue Code of 1986 is amended by adding at the 

end the following new paragraph: 

‘‘(3) SPECIAL RULE FOR TAXABLE YEARS BEGINNING IN 2010.— 

In the case of a taxable year beginning in 2010, paragraph 

(1)(A)(ii) shall be applied— 

‘‘(A) by substituting ‘$10,000’ for ‘$5,000’, and 

‘‘(B) by substituting ‘$60,000’ for ‘$50,000’.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to amounts paid or incurred in taxable years beginning 

after December 31, 2009. 

SEC. 2032. AUTHORIZATION OF APPROPRIATIONS FOR THE UNITED 

STATES TRADE REPRESENTATIVE TO DEVELOP MARKET 

ACCESS OPPORTUNITIES FOR UNITED STATES SMALLAND MEDIUM-SIZED BUSINESSES AND TO ENFORCE 

TRADE AGREEMENTS. 

(a) IN GENERAL.—There are authorized to be appropriated to 

the Office of the United States Trade Representative $5,230,000, 

to remain available until expended, for— 

(1) analyzing and developing opportunities for businesses 

in the United States to access the markets of foreign countries; 

and 

(2) enforcing trade agreements to which the United States 

is a party. 

(b) REQUIREMENTS.—In obligating and expending the funds 

authorized to be appropriated under subsection (a), the United 

States Trade Representative shall— 
H. R. 5297—57 

(1) give preference to those initiatives that the United 

States Trade Representative determines will create or sustain 

the greatest number of jobs in the United States or result 

in the greatest benefit to the economy of the United States; 

and 

(2) consider the needs of small- and medium-sized 

businesses in the United States with respect to— 

(A) accessing the markets of foreign countries; and 

(B) the enforcement of trade agreements to which the 

United States is a party. 

PART IV—PROMOTING SMALL BUSINESS 

FAIRNESS 

SEC. 2041. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE 

REPORTABLE TRANSACTIONS BASED ON RESULTING TAX 

BENEFITS. 

(a) IN GENERAL.—Subsection (b) of section 6707A of the Internal 

Revenue Code of 1986 is amended to read as follows: 

‘‘(b) AMOUNT OF PENALTY.— 

‘‘(1) IN GENERAL.—Except as otherwise provided in this 

subsection, the amount of the penalty under subsection (a) 

with respect to any reportable transaction shall be 75 percent 

of the decrease in tax shown on the return as a result of 

such transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes). 

‘‘(2) MAXIMUM PENALTY.—The amount of the penalty under 

subsection (a) with respect to any reportable transaction shall 

not exceed— 

‘‘(A) in the case of a listed transaction, $200,000 

($100,000 in the case of a natural person), or 

‘‘(B) in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person). 

‘‘(3) MINIMUM PENALTY.—The amount of the penalty under 

subsection (a) with respect to any transaction shall not be 

less than $10,000 ($5,000 in the case of a natural person).’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to penalties assessed after December 31, 2006. 

SEC. 2042. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING SELF-EMPLOYMENT TAXES IN 2010. 

(a) IN GENERAL.—Paragraph (4) of section 162(l) of the Internal 

Revenue Code of 1986 is amended by inserting ‘‘for taxable years 

beginning before January 1, 2010, or after December 31, 2010’’ 

before the period. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2009. 

SEC. 2043. REMOVAL OF CELLULAR TELEPHONES AND SIMILAR TELECOMMUNICATIONS EQUIPMENT FROM LISTED PROPERTY. 

(a) IN GENERAL.—Subparagraph (A) of section 280F(d)(4) of 

the Internal Revenue Code of 1986 (defining listed property) is 

amended by adding ‘‘ ‘and’ ’’ at the end of clause (iv), by striking 

clause (v), and by redesignating clause (vi) as clause (v). 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to taxable years beginning after December 31, 2009. 
H. R. 5297—58 

Subtitle B—Revenue Provisions 

PART I—REDUCING THE TAX GAP 

SEC. 2101. INFORMATION REPORTING FOR RENTAL PROPERTY 

EXPENSE PAYMENTS. 

(a) IN GENERAL.—Section 6041 of the Internal Revenue Code 

of 1986, as amended by section 9006 of the Patient Protection 

and Affordable Care Act, is amended by redesignating subsections 

(h) and (i) as subsections (i) and (j), respectively, and by inserting 

after subsection (g) the following new subsection: 

‘‘(h) TREATMENT OF RENTAL PROPERTY EXPENSE PAYMENTS.— ‘‘(1) IN GENERAL.—Solely for purposes of subsection (a) 

and except as provided in paragraph (2), a person receiving 

rental income from real estate shall be considered to be engaged 

in a trade or business of renting property. 

‘‘(2) EXCEPTIONS.—Paragraph (1) shall not apply to— 

‘‘(A) any individual, including any individual who is 

an active member of the uniformed services or an employee 

of the intelligence community (as defined in section 

121(d)(9)(C)(iv)), if substantially all rental income is derived 

from renting the principal residence (within the meaning 

of section 121) of such individual on a temporary basis, 

‘‘(B) any individual who receives rental income of not 

more than the minimal amount, as determined under regulations prescribed by the Secretary, and 

‘‘(C) any other individual for whom the requirements 

of this section would cause hardship, as determined under 

regulations prescribed by the Secretary.’’. 

(b) EFFECTIVE DATE.—The amendments made by subsection 

(a) shall apply to payments made after December 31, 2010. 

SEC. 2102. INCREASE IN INFORMATION RETURN PENALTIES. 

(a) FAILURE TO FILE CORRECT INFORMATION RETURNS.— (1) IN GENERAL.—Subsections (a)(1), (b)(1)(A), and (b)(2)(A) 

of section 6721 of the Internal Revenue Code of 1986 are 

each amended by striking ‘‘$50’’ and inserting ‘‘$100’’. 

(2) AGGREGATE ANNUAL LIMITATION.—Subsections (a)(1), 

(d)(1)(A), and (e)(3)(A) of section 6721 of such Code are each 

amended by striking ‘‘$250,000’’ and inserting ‘‘$1,500,000’’. 

(b) REDUCTION WHERE CORRECTION WITHIN 30 DAYS.— (1) IN GENERAL.—Subparagraph (A) of section 6721(b)(1) 

of the Internal Revenue Code of 1986 is amended by striking 

‘‘$15’’ and inserting ‘‘$30’’. 

(2) AGGREGATE ANNUAL LIMITATION.—Subsections (b)(1)(B) 

and (d)(1)(B) of section 6721 of such Code are each amended 

by striking ‘‘$75,000’’ and inserting ‘‘$250,000’’. 

(c) REDUCTION WHERE CORRECTION ON OR BEFORE AUGUST

1.— 

(1) IN GENERAL.—Subparagraph (A) of section 6721(b)(2) 

of the Internal Revenue Code of 1986 is amended by striking 

‘‘$30’’ and inserting ‘‘$60’’. 

(2) AGGREGATE ANNUAL LIMITATION.—Subsections (b)(2)(B) 

and (d)(1)(C) of section 6721 of such Code are each amended 

by striking ‘‘$150,000’’ and inserting ‘‘$500,000’’. 

(d) AGGREGATE ANNUAL LIMITATIONS FOR PERSONS WITH GROSS

RECEIPTS OF NOT MORE THAN $5,000,000.— 
H. R. 5297—59 

(1) IN GENERAL.—Paragraph (1) of section 6721(d) of the 

Internal Revenue Code of 1986 is amended— 

(A) by striking ‘‘$100,000’’ in subparagraph (A) and 

inserting ‘‘$500,000’’, 

(B) by striking ‘‘$25,000’’ in subparagraph (B) and 

inserting ‘‘$75,000’’, and 

(C) by striking ‘‘$50,000’’ in subparagraph (C) and 

inserting ‘‘$200,000’’. 

(2) TECHNICAL AMENDMENT.—Paragraph (1) of section 

6721(d) of such Code is amended by striking ‘‘such taxable 

year’’ and inserting ‘‘such calendar year’’. 

(e) PENALTY IN CASE OF INTENTIONAL DISREGARD.—Paragraph 

(2) of section 6721(e) of the Internal Revenue Code of 1986 is 

amended by striking ‘‘$100’’ and inserting ‘‘$250’’. 

(f) ADJUSTMENT FOR INFLATION.—Section 6721 of the Internal 

Revenue Code of 1986 is amended by adding at the end the following 

new subsection: 

‘‘(f) ADJUSTMENT FOR INFLATION.— 

‘‘(1) IN GENERAL.—For each fifth calendar year beginning 

after 2012, each of the dollar amounts under subsections (a), 

(b), (d) (other than paragraph (2)(A) thereof), and (e) shall 

be increased by such dollar amount multiplied by the costof-living adjustment determined under section 1(f)(3) determined by substituting ‘calendar year 2011’ for ‘calendar year 

1992’ in subparagraph (B) thereof. 

‘‘(2) ROUNDING.—If any amount adjusted under paragraph 

(1)— 

‘‘(A) is not less than $75,000 and is not a multiple 

of $500, such amount shall be rounded to the next lowest 

multiple of $500, and 

‘‘(B) is not described in subparagraph (A) and is not 

a multiple of $10, such amount shall be rounded to the 

next lowest multiple of $10.’’. 

(g) FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.—Section 

6722 of the Internal Revenue Code of 1986 is amended to read 

as follows: 

‘‘SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS. 

‘‘(a) IMPOSITION OF PENALTY.— 

‘‘(1) GENERAL RULE.—In the case of each failure described 

in paragraph (2) by any person with respect to a payee statement, such person shall pay a penalty of $100 for each statement with respect to which such a failure occurs, but the 

total amount imposed on such person for all such failures 

during any calendar year shall not exceed $1,500,000. 

‘‘(2) FAILURES SUBJECT TO PENALTY.—For purposes of paragraph (1), the failures described in this paragraph are— 

‘‘(A) any failure to furnish a payee statement on or 

before the date prescribed therefor to the person to whom 

such statement is required to be furnished, and 

‘‘(B) any failure to include all of the information 

required to be shown on a payee statement or the inclusion 

of incorrect information. 

‘‘(b) REDUCTION WHERE CORRECTION IN SPECIFIED PERIOD.— ‘‘(1) CORRECTION WITHIN 30 DAYS.—If any failure described 

in subsection (a)(2) is corrected on or before the day 30 days 

after the required filing date— 
H. R. 5297—60 

‘‘(A) the penalty imposed by subsection (a) shall be 

$30 in lieu of $100, and 

‘‘(B) the total amount imposed on the person for all 

such failures during any calendar year which are so corrected shall not exceed $250,000. 

‘‘(2) FAILURES CORRECTED ON OR BEFORE AUGUST 1.—If 

any failure described in subsection (a)(2) is corrected after 

the 30th day referred to in paragraph (1) but on or before 

August 1 of the calendar year in which the required filing 

date occurs— 

‘‘(A) the penalty imposed by subsection (a) shall be 

$60 in lieu of $100, and 

‘‘(B) the total amount imposed on the person for all 

such failures during the calendar year which are so corrected shall not exceed $500,000. 

‘‘(c) EXCEPTION FOR DE MINIMIS FAILURES.— 

‘‘(1) IN GENERAL.—If— 

‘‘(A) a payee statement is furnished to the person to 

whom such statement is required to be furnished, 

‘‘(B) there is a failure described in subsection (a)(2)(B) 

(determined after the application of section 6724(a)) with 

respect to such statement, and 

‘‘(C) such failure is corrected on or before August 1 

of the calendar year in which the required filing date 

occurs, 

for purposes of this section, such statement shall be treated 

as having been furnished with all of the correct required 

information. 

‘‘(2) LIMITATION.—The number of payee statements to 

which paragraph (1) applies for any calendar year shall not 

exceed the greater of— 

‘‘(A) 10, or 

‘‘(B) one-half of 1 percent of the total number of payee 

statements required to be filed by the person during the 

calendar year. 

‘‘(d) LOWER LIMITATIONS FOR PERSONS WITH GROSS RECEIPTS

OF NOT MORE THAN $5,000,000.— 

‘‘(1) IN GENERAL.—If any person meets the gross receipts 

test of paragraph (2) with respect to any calendar year, with 

respect to failures during such calendar year— 

‘‘(A) subsection (a)(1) shall be applied by substituting ‘$500,000’ for ‘$1,500,000’, 

‘‘(B) subsection (b)(1)(B) shall be applied by sub- stituting ‘$75,000’ for ‘$250,000’, and 

‘‘(C) subsection (b)(2)(B) shall be applied by sub- stituting ‘$200,000’ for ‘$500,000’. 

‘‘(2) GROSS RECEIPTS TEST.—A person meets the gross 

receipts test of this paragraph if such person meets the gross 

receipts test of section 6721(d)(2). 

‘‘(e) PENALTY IN CASE OF INTENTIONAL DISREGARD.—If 1 or 

more failures to which subsection (a) applies are due to intentional 

disregard of the requirement to furnish a payee statement (or 

the correct information reporting requirement), then, with respect 

to each such failure— 

‘‘(1) subsections (b), (c), and (d) shall not apply, 

‘‘(2) the penalty imposed under subsection (a)(1) shall be 

$250, or, if greater— 
H. R. 5297—61 

‘‘(A) in the case of a payee statement other than a 

statement required under section 6045(b), 6041A(e) (in 

respect of a return required under section 6041A(b)), 

6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of 

the aggregate amount of the items required to be reported 

correctly, or 

‘‘(B) in the case of a payee statement required under 

section 6045(b), 6050K(b), or 6050L(c), 5 percent of the 

aggregate amount of the items required to be reported 

correctly, and 

‘‘(3) in the case of any penalty determined under paragraph 

(2)— 

‘‘(A) the $1,500,000 limitation under subsection (a) 

shall not apply, and 

‘‘(B) such penalty shall not be taken into account in 

applying such limitation to penalties not determined under 

paragraph (2). 

‘‘(f) ADJUSTMENT FOR INFLATION.— 

‘‘(1) IN GENERAL.—For each fifth calendar year beginning 

after 2012, each of the dollar amounts under subsections (a), 

(b), (d)(1), and (e) shall be increased by such dollar amount 

multiplied by the cost-of-living adjustment determined under 

section 1(f)(3) determined by substituting ‘calendar year 2011’ 

for ‘calendar year 1992’ in subparagraph (B) thereof. 

‘‘(2) ROUNDING.—If any amount adjusted under paragraph 

(1)— 

‘‘(A) is not less than $75,000 and is not a multiple 

of $500, such amount shall be rounded to the next lowest 

multiple of $500, and 

‘‘(B) is not described in subparagraph (A) and is not 

a multiple of $10, such amount shall be rounded to the 

next lowest multiple of $10.’’. 

(h) EFFECTIVE DATE.—The amendments made by this section 

shall apply with respect to information returns required to be 

filed on or after January 1, 2011. 

SEC. 2103. REPORT ON TAX SHELTER PENALTIES AND CERTAIN OTHER 

ENFORCEMENT ACTIONS. 

(a) IN GENERAL.—The Commissioner of Internal Revenue, in 

consultation with the Secretary of the Treasury, shall submit to 

the Committee on Ways and Means of the House of Representatives 

and the Committee on Finance of the Senate an annual report 

on the penalties assessed by the Internal Revenue Service during 

the preceding year under each of the following provisions of the 

Internal Revenue Code of 1986: 

(1) Section 6662A (relating to accuracy-related penalty on 

understatements with respect to reportable transactions). 

(2) Section 6700(a) (relating to promoting abusive tax shelters). 

(3) Section 6707 (relating to failure to furnish information 

regarding reportable transactions). 

(4) Section 6707A (relating to failure to include reportable 

transaction information with return). 

(5) Section 6708 (relating to failure to maintain lists of 

advisees with respect to reportable transactions). 
H. R. 5297—62 

(b) ADDITIONAL INFORMATION.—The report required under subsection (a) shall also include information on the following with 

respect to each year: 

(1) Any action taken under section 330(b) of title 31, United 

States Code, with respect to any reportable transaction (as 

defined in section 6707A(c) of the Internal Revenue Code of 

1986). 

(2) Any extension of the time for assessment of tax enforced, 

or assessment of any amount under such an extension, under 

paragraph (10) of section 6501(c) of the Internal Revenue Code 

of 1986. 

(c) DATE OF REPORT.—The first report required under subsection (a) shall be submitted not later than December 31, 2010. 

SEC. 2104. APPLICATION OF CONTINUOUS LEVY TO TAX LIABILITIES 

OF CERTAIN FEDERAL CONTRACTORS. 

(a) IN GENERAL.—Subsection (f) of section 6330 of the Internal 

Revenue Code of 1986 is amended by striking ‘‘or’’ at the end 

of paragraph (2), by inserting ‘‘or’’ at the end of paragraph (3), 

and by inserting after paragraph (3) the following new paragraph: 

‘‘(4) the Secretary has served a Federal contractor levy,’’. 

(b) FEDERAL CONTRACTOR LEVY.—Subsection (h) of section 6330 

of the Internal Revenue Code of 1986 is amended— 

(1) by striking all that precedes ‘‘any levy in connection 

with the collection’’ and inserting the following: 

‘‘(h) DEFINITIONS RELATED TO EXCEPTIONS.—For purposes of 

subsection (f)— 

‘‘(1) DISQUALIFIED EMPLOYMENT TAX LEVY.—A disqualified 

employment tax levy is’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(2) FEDERAL CONTRACTOR LEVY.—A Federal contractor levy 

is any levy if the person whose property is subject to the 

levy (or any predecessor thereof) is a Federal contractor.’’. 

(c) CONFORMING AMENDMENT.—The heading of subsection (f) 

of section 6330 of the Internal Revenue Code of 1986 is amended 

by striking ‘‘JEOPARDY AND STATE REFUND COLLECTION’’ and 

inserting ‘‘EXCEPTIONS’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to levies issued after the date of the enactment of 

this Act. 

PART II—PROMOTING RETIREMENT 

PREPARATION 

SEC. 2111. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 

ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 

CONTRIBUTIONS. 

(a) IN GENERAL.—Section 402A(e)(1) of the Internal Revenue 

Code of 1986 is amended by striking ‘‘and’’ at the end of subparagraph (A), by striking the period at the end of subparagraph (B) 

and inserting ‘‘, and’’, and by adding at the end the following: 

‘‘(C) an eligible deferred compensation plan (as defined 

in section 457(b)) of an eligible employer described in section 457(e)(1)(A).’’. 

(b) ELECTIVE DEFERRALS.—Section 402A(e)(2) of the Internal 

Revenue Code of 1986 is amended to read as follows: 
H. R. 5297—63 

‘‘(2) ELECTIVE DEFERRAL.—The term ‘elective deferral’ 

means— 

‘‘(A) any elective deferral described in subparagraph 

(A) or (C) of section 402(g)(3), and 

‘‘(B) any elective deferral of compensation by an individual under an eligible deferred compensation plan (as 

defined in section 457(b)) of an eligible employer described 

in section 457(e)(1)(A).’’. 

(c) EFFECTIVE DATE.—The amendments made by this section 

shall apply to taxable years beginning after December 31, 2010. 

SEC. 2112. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO DESIGNATED ROTH ACCOUNTS. 

(a) IN GENERAL.—Section 402A(c) of the Internal Revenue Code 

of 1986 is amended by adding at the end the following new paragraph: 

‘‘(4) TAXABLE ROLLOVERS TO DESIGNATED ROTH ACCOUNTS.— ‘‘(A) IN GENERAL.—Notwithstanding sections 402(c), 

403(b)(8), and 457(e)(16), in the case of any distribution 

to which this paragraph applies— 

‘‘(i) there shall be included in gross income any 

amount which would be includible were it not part 

of a qualified rollover contribution, 

‘‘(ii) section 72(t) shall not apply, and 

‘‘(iii) unless the taxpayer elects not to have this 

clause apply, any amount required to be included in 

gross income for any taxable year beginning in 2010 

by reason of this paragraph shall be so included ratably 

over the 2-taxable-year period beginning with the first 

taxable year beginning in 2011. 

Any election under clause (iii) for any distributions during 

a taxable year may not be changed after the due date 

for such taxable year. 

‘‘(B) DISTRIBUTIONS TO WHICH PARAGRAPH APPLIES.— In the case of an applicable retirement plan which includes 

a qualified Roth contribution program, this paragraph shall 

apply to a distribution from such plan other than from 

a designated Roth account which is contributed in a qualified rollover contribution (within the meaning of section 

408A(e)) to the designated Roth account maintained under 

such plan for the benefit of the individual to whom the 

distribution is made. 

‘‘(C) COORDINATION WITH LIMIT.—Any distribution to 

which this paragraph applies shall not be taken into 

account for purposes of paragraph (1). 

‘‘(D) OTHER RULES.—The rules of subparagraphs (D), 

(E), and (F) of section 408A(d)(3) (as in effect for taxable 

years beginning after 2009) shall apply for purposes of 

this paragraph.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to distributions after the date of the enactment of 

this Act. 

SEC. 2113. SPECIAL RULES FOR ANNUITIES RECEIVED FROM ONLY 

A PORTION OF A CONTRACT. 

(a) IN GENERAL.—Subsection (a) of section 72 of the Internal 

Revenue Code of 1986 is amended to read as follows: 

‘‘(a) GENERAL RULES FOR ANNUITIES.— 
H. R. 5297—64 

‘‘(1) INCOME INCLUSION.—Except as otherwise provided in 

this chapter, gross income includes any amount received as 

an annuity (whether for a period certain or during one or 

more lives) under an annuity, endowment, or life insurance 

contract. 

‘‘(2) PARTIAL ANNUITIZATION.—If any amount is received 

as an annuity for a period of 10 years or more or during 

one or more lives under any portion of an annuity, endowment, 

or life insurance contract— 

‘‘(A) such portion shall be treated as a separate contract 

for purposes of this section, 

‘‘(B) for purposes of applying subsections (b), (c), and 

(e), the investment in the contract shall be allocated pro 

rata between each portion of the contract from which 

amounts are received as an annuity and the portion of 

the contract from which amounts are not received as an 

annuity, and 

‘‘(C) a separate annuity starting date under subsection 

(c)(4) shall be determined with respect to each portion 

of the contract from which amounts are received as an 

annuity.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section 

shall apply to amounts received in taxable years beginning after 

December 31, 2010. 

PART III—CLOSING UNINTENDED LOOPHOLES 

SEC. 2121. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL 

PRODUCER CREDIT. 

(a) IN GENERAL.—Clause (iii) of section 40(b)(6)(E) of the 

Internal Revenue Code of 1986, as added by the Health Care 

and Education Reconciliation Act of 2010, is amended— 

(1) by striking ‘‘or’’ at the end of subclause (I), 

(2) by striking the period at the end of subclause (II) 

and inserting ‘‘, or’’, 

(3) by adding at the end the following new subclause: 

‘‘(III) such fuel has an acid number greater 

than 25.’’, and 

(4) by striking ‘‘UNPROCESSED’’ in the heading and inserting 

‘‘CERTAIN’’. 

(b) EFFECTIVE DATE.—The amendments made by this section 

shall apply to fuels sold or used on or after January 1, 2010. 

SEC. 2122. SOURCE RULES FOR INCOME ON GUARANTEES. 

(a) AMOUNTS SOURCED WITHIN THE UNITED STATES.—Subsection (a) of section 861 of the Internal Revenue Code of 1986 

is amended by adding at the end the following new paragraph: 

‘‘(9) GUARANTEES.—Amounts received, directly or indirectly, 

from— 

‘‘(A) a noncorporate resident or domestic corporation 

for the provision of a guarantee of any indebtedness of 

such resident or corporation, or 

‘‘(B) any foreign person for the provision of a guarantee 

of any indebtedness of such person, if such amount is 

connected with income which is effectively connected (or 

treated as effectively connected) with the conduct of a 

trade or business in the United States.’’. 
H. R. 5297—65 

(b) AMOUNTS SOURCED WITHOUT THE UNITED STATES.—Subsection (a) of section 862 of the Internal Revenue Code of 1986 

is amended by striking ‘‘and’’ at the end of paragraph (7), by 

striking the period at the end of paragraph (8) and inserting ‘‘; 

and’’, and by adding at the end the following new paragraph: 

‘‘(9) amounts received, directly or indirectly, from a foreign 

person for the provision of a guarantee of indebtedness of 

such person other than amounts which are derived from sources 

within the United States as provided in section 861(a)(9).’’. 

(c) CONFORMING AMENDMENT.—Clause (ii) of section 

864(c)(4)(B) of the Internal Revenue Code of 1986 is amended 

by striking ‘‘dividends or interest’’ and inserting ‘‘dividends, interest, 

or amounts received for the provision of guarantees of indebtedness’’. 

(d) EFFECTIVE DATE.—The amendments made by this section 

shall apply to guarantees issued after the date of the enactment 

of this Act. 

PART IV—TIME FOR PAYMENT OF CORPORATE 

ESTIMATED TAXES 

SEC. 2131. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 

The percentage under paragraph (2) of section 561 of the Hiring 

Incentives to Restore Employment Act in effect on the date of 

the enactment of this Act is increased by 36 percentage points. 

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 
H. R. 5297—66 

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 
H. R. 5297—67 

(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— 
H. R. 5297—68 

(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 
H. R. 5297—69 

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. 
H. R. 5297—70 

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

DIRECTLY.—If 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 
H. R. 5297—71 

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. 

SEC. 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— 
H. R. 5297—72 

(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 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 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, 
H. R. 5297—73 

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; 
H. R. 5297—74 

(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. 
H. R. 5297—75 

(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. 
H. R. 5297—76 

(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. 
H. R. 5297—77 

(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. 
H. R. 5297—78 

(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 
H. R. 5297—79 

child pornography, on a Federal Government computer or while 

performing official Federal Government duties. 

TITLE IV—ADDITIONAL SMALL 

BUSINESS PROVISIONS 

Subtitle A—Small Business Lending Fund 

SEC. 4101. PURPOSE. 

The purpose of this subtitle 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. 4102. DEFINITIONS. 

For purposes of this subtitle: 

(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; 

(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); 

(D) reports of Condition and Income as designated 

through guidance developed by the Secretary, in consultation with the Director of the Community Development 

Financial Institutions Fund; and 
H. R. 5297—80 

(E) with respect to an eligible institution for which 

no report exists that is described under subparagraph (A), 

(B), (C), or (D), such other report or set of information 

as the Secretary, in consultation with the Administrator 

of the Small Business Administration, may prescribe. 

(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) CDFI; COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION.—The terms ‘‘CDFI’’ and ‘‘community development financial institution’’ have the meaning given the term ‘‘community 

development financial institution’’ under the Riegle Community 

Development and Regulatory Improvement Act of 1994. 

(8) CDLF; COMMUNITY DEVELOPMENT LOAN FUND.—The 

terms ‘‘CDLF’’ and ‘‘community development loan fund’’ mean 

any entity that— 

(A) is certified by the Department of the Treasury 

as a community development financial institution loan 

fund; 

(B) is exempt from taxation under the Internal Revenue Code of 1986; and 

(C) had assets less than or equal to $10,000,000,000 

as of the end of the fourth quarter of calendar year 2009. 

(9) 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. 

(10) 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. 

(11) 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 of the 

insured depository institution 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 consolidated assets of equal to or less than $10,000,000,000, as 

reported in the call report of the bank holding company 

as of the end of the fourth quarter of calendar year 2009; 

(C) any savings and loan holding company which has 

total consolidated assets of equal to or less than 

$10,000,000,000, as reported in the call report of the 
H. R. 5297—81 

savings and loan holding company as of the end of the 

fourth quarter of calendar year 2009; and 

(D) any community development financial institution 

loan fund which has total assets of equal to or less than 

$10,000,000,000, as reported in audited financial statements for the fiscal year of the community development 

financial institution loan fund that ends in calendar year 

2009. 

(12) FUND.—The term ‘‘Fund’’ means the Small Business 

Lending Fund established under section 4103(a)(1). 

(13) 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)). 

(14) 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)). 

(15) PROGRAM.—The term ‘‘Program’’ means the Small 

Business Lending Fund Program authorized under section 

4103(a)(2). 

(16) 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)). 

(17) SECRETARY.—The term ‘‘Secretary’’ means the Secretary of the Treasury. 

(18) SMALL BUSINESS LENDING.— 

(A) IN GENERAL.—The term ‘‘small business lending’’ 

means lending, as defined by and reported in an eligible 

institutions’ quarterly call report, where each loan comprising such lending is one of the following types: 

(i) Commercial and industrial loans. 

(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) EXCLUSION.—No loan that has an original amount 

greater than $10,000,000 or that goes to a business with 

more than $50,000,000 in revenues shall be included in 

the measure. 

(C) 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. 

(19) VETERAN-OWNED BUSINESS.— 

(A) The term ‘‘veteran-owned business’’ means a business— 

(i) more than 50 percent of the ownership or control 

of which is held by 1 or more veterans; 
H. R. 5297—82 

(ii) more than 50 percent of the net profit or loss 

of which accrues to 1 or more veterans; and 

(iii) a significant percentage of senior management 

positions of which are held by veterans. 

(B) For purposes of this paragraph, the term ‘‘veteran’’ 

has the meaning given such term in section 101(2) of 

title 38, United States Code. 

SEC. 4103. 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 subtitle. 

(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 subtitle. For purposes 

of this paragraph and with respect to an eligible institution, 

the term ‘‘other financial instruments’’ shall include only debt 

instruments for which such eligible institution is fully liable 

or equity equivalent capital of the eligible institution. Such 

debt instruments may be subordinated to the claims of other 

creditors of the eligible institution. 

(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. 

(4) LIMITATION ON PURCHASES FROM CDLFS.— 

(A) IN GENERAL.—Not more than 1 percent of the maximum purchase limit of the Program, pursuant to paragraph (2), may be used to make purchases from community 

development loan funds. 

(B) ELIGIBILITY STANDARDS.—The Secretary, in consultation with the Community Development Financial 

Institutions Fund, shall develop eligibility criteria to determine the financial ability of a CDLF to participate in 

the Program and repay the investment. Such criteria shall 

include the following: 

(i) Ratio of net assets to total assets is at least 

20 percent. 

(ii) Ratio of loan loss reserves to loans and leases 

90 days or more delinquent (including loans sold with 

full recourse) is at least 30 percent. 
H. R. 5297—83 

(iii) Positive net income measured on a 3-year 

rolling average. 

(iv) Operating liquidity ratio of at least 1.0 for 

the 4 most recent quarters and for one or both of 

the two preceding years. 

(v) Ratio of loans and leases 90 days or more 

delinquent (including loans sold with full recourse) 

to total equity plus loan loss reserves is less than 

40 percent. 

(C) REQUIREMENT TO SUBMIT AUDITED FINANCIAL

STATEMENTS.—CDLFs participating in the Program shall 

submit audited financial statements to the Secretary, have 

a clean audit opinion, and have at least 3 years of operating 

experience. 

(c) CREDITS TO THE FUND.—There shall be credited to the 

Fund amounts made available pursuant to section 4108, 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 OR EQUAL TO $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 
H. R. 5297—84 

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 subparagraph, 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 subparagraph, 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, and, for applicants that 

are State-chartered banks, to the appropriate State banking 

regulator, 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, as well as a plan to provide linguistically 

and culturally appropriate outreach, where appropriate. 

In the case of eligible institutions that are community 

development loan funds, this plan shall be submitted to 

the Secretary. This plan shall be confidential supervisory 

information. 

(F) TREATMENT OF APPLICANTS THAT ARE COMMUNITY

DEVELOPMENT LOAN FUNDS.—Eligible institutions that are 

community development loan funds may apply to receive 

a capital investment from the Fund in an amount not 

exceeding 5 percent of total assets, as reported in the 

audited financial statements for the fiscal year of the 

eligible institution that ends in calendar year 2009. 

(2) CONSULTATION WITH REGULATORS.—For each eligible 

institution that applies to receive a capital investment under 

the Program, the Secretary shall— 

(A) consult with the appropriate Federal banking 

agency or, in the case of an eligible institution that is 

a nondepository community development financial institution, the Community Development Financial Institution 

Fund, for the eligible institution, to determine whether 

the eligible institution may receive such capital investment; 

(B) in the case of an eligible institution that is a 

State-chartered bank, consider any views received from 

the State banking regulator of the State of the eligible 

institution regarding the financial condition of the eligible 

institution; and 

(C) in the case of a community development financial 

institution loan fund, consult with the Community Development Financial Institution Fund. 

(3) CONSIDERATION OF MATCHED PRIVATE INVESTMENTS.— 

(A) IN GENERAL.—For an eligible institution that 

applies to receive a capital investment under the Program, 

if the entity to be consulted under paragraph (2) would 

not otherwise recommend the eligible institution to receive 

the capital investment, the Secretary, in consultation with 

the entity to be so consulted, may consider whether the 
H. R. 5297—85 

entity to be consulted would recommend the eligible institution to receive a capital investment based on the financial 

condition of the institution if the conditions in subparagraph (B) are satisfied. 

(B) CONDITIONS.—The conditions referred to in 

subparagraph (A) are as follows: 

(i) CAPITAL SOURCES.—The eligible institution shall 

receive capital both under the Program and from private, nongovernment investors. 

(ii) AMOUNT OF CAPITAL.—The amount of capital 

to be received under the Program shall not exceed 

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. 

(iii) TERMS.—The amount of capital to be received 

from private, nongovernment investors shall be— 

(I) equal to or greater than 100 percent of 

the capital to be received under the Program; and 

(II) subordinate to the capital investment 

made by the Secretary under the Program. 

(4) 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) CONSTRUCTION.—Nothing in subparagraph (A) 

shall be construed as limiting the discretion of the Secretary to deny the application of an eligible institution 

that is not on the FDIC problem bank list. 

(C) FDIC PROBLEM BANK LIST DEFINED.—For purposes 

of this paragraph, the term ‘‘FDIC problem bank list’’ 

means the list of depository institutions having 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. 

(5) 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 average amount of small business lending reported 

by the eligible institution in its call reports for the 

4 full quarters immediately preceding the date of enactment of this Act, minus adjustments from each quarterly balance in respect of— 
H. R. 5297—86 

(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 41⁄2-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 41⁄2- year period that begins on the date of the investment. 

(E) RATE FOLLOWING INITIAL 41⁄2 -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 41⁄2-year period 
H. R. 5297—87 

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 evidenced by preferred stock or other financial 

instrument that— 

(i) includes, as a term and condition, that the 

capital investment will— 

(I) be repaid not later than the end of the 

10-year period beginning on the date of the capital 

investment under the Program; or 

(II) at the end of such 10-year period, be subject to such additional terms as the Secretary shall 

prescribe, which shall include a requirement that 

the stock or instrument shall carry the highest 

dividend or interest rate payable; and 

(ii) provides that the term and condition described 

under clause (i) shall not apply if the application of 

that term and condition would adversely affect the 

capital treatment of the stock or financial instrument 

under current or successor applicable capital provisions 

compared to a capital instrument with identical terms 

other than the term and condition described under 

clause (i). 

(I) REQUIREMENTS ON FINANCIAL INSTRUMENTS ISSUED

BY A COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION

LOAN FUND.—Any equity equivalent capital issued to the 

Treasury by a community development loan fund receiving 

a capital investment under the Program shall provide that 

the rate at which interest is payable shall be 2 percent 

per annum for 8 years. After 8 years, the rate at which 

interest is payable shall be 9 percent. 
H. R. 5297—88 

(6) ADDITIONAL INCENTIVES TO REPAY.—The Secretary may, 

by regulation or guidance issued under section 4104(9), establish repayment incentives in addition to the incentive in paragraph (5)(E) that will apply to new capital investments in 

a manner that the Secretary determines to be consistent with 

the purposes of this subtitle. 

(7) 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 subtitle, 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 missed more than one dividend 

payment due under the CPP. For purposes of this subparagraph, a CPP dividend payment that is submitted within 

60 days of the due date of such payment shall not be 

considered a missed dividend payment. 

(8) OUTREACH TO MINORITIES, WOMEN, AND VETERANS.— 

The Secretary shall require eligible institutions receiving capital investments under the Program to provide linguistically 

and culturally appropriate outreach and advertising in 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— 

(A) represent or work within or are members of 

minority communities; 

(B) represent or work with or are women; and 

(C) represent or work with or are veterans. 

(9) ADDITIONAL TERMS.—The Secretary may, by regulation 

or guidance issued under section 4104(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 subtitle. 

(10) MINIMUM UNDERWRITING STANDARDS.—The appropriate Federal banking agency for an eligible institution that 

receives funds under the Program shall within 60 days issue 

guidance regarding prudent underwriting standards that must 

be used for loans made by the eligible institution using such 

funds. 

SEC. 4104. ADDITIONAL AUTHORITIES OF THE SECRETARY. 

The Secretary may take such actions as the Secretary deems 

necessary to carry out the authorities in this subtitle, 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. 
H. R. 5297—89 

(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 subtitle 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 Act, to perform reasonable duties related 

to this subtitle. 

(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 subtitle. 

(5) Subject to section 4103(b)(3), the Secretary may manage 

any assets purchased under this subtitle, 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 

subtitle, 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 subtitle. 

(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 subtitle. 

SEC. 4105. CONSIDERATIONS. 

In exercising the authorities granted in this subtitle, the Secretary shall take into consideration— 

(1) increasing the availability of credit for small businesses; 

(2) providing funding to minority-owned eligible institutions 

and other eligible institutions that serve small businesses that 

are minority-, veteran-, 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) increasing the opportunity for small business development in areas with high unemployment rates that exceed the 

national average; 

(5) ensuring that all eligible institutions may apply to 

participate in the program established under this subtitle, without discrimination based on geography; 

(6) providing transparency with respect to use of funds 

provided under this subtitle; 
H. R. 5297—90 

(7) minimizing the cost to taxpayers of exercising the 

authorities; 

(8) promoting and engaging in financial education to wouldbe borrowers; and 

(9) providing funding to eligible institutions that serve 

small businesses directly affected by the discharge of oil arising 

from the explosion on and sinking of the mobile offshore drilling 

unit Deepwater Horizon and small businesses in communities 

that have suffered negative economic effects as a result of 

that discharge with particular consideration to States along 

the coast of the Gulf of Mexico. 

SEC. 4106. 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 subtitle; 

(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 calendar quarter 

commencing with the first calendar quarter 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. 4107. 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 Program through the 

Office of Small Business Lending Fund Program Oversight established under subsection (b). 

(b) OFFICE OF SMALL BUSINESS LENDING FUND PROGRAM OVER- SIGHT.— 

(1) ESTABLISHMENT.—There is hereby established within 

the Office of the Inspector General of the Department of the 

Treasury a new office to be named the ‘‘Office of Small Business 

Lending Fund Program Oversight’’ to provide oversight of the 

Program. 

(2) LEADERSHIP.—The Inspector General shall appoint a 

Special Deputy Inspector General for SBLF Program Oversight 

to lead the Office, with commensurate staff, who shall report 

directly to the Inspector General and who shall be responsible 

for the performance of all auditing and investigative activities 

relating to the Program. 

(3) REPORTING.— (A) IN GENERAL.—The Inspector General shall issue 

a report no less than two times a year to the Congress 

and the Secretary devoted to the oversight provided by 

the Office, including any recommendations for improvements to the Program. 
H. R. 5297—91 

(B) RECOMMENDATIONS.—With respect to any deficiencies identified in a report under subparagraph (A), 

the Secretary shall either— 

(i) take actions to address such deficiencies; or 

(ii) certify to the appropriate committees of Congress that no action is necessary or appropriate. 

(4) COORDINATION.—The Inspector General, in maximizing 

the effectiveness of the Office, shall work with other Offices 

of Inspector General, as appropriate, to minimize duplication 

of effort and ensure comprehensive oversight of the Program. 

(5) TERMINATION.—The Office shall terminate at the end 

of the 6-month period beginning on the date on which all 

capital investments are repaid under the Program or the date 

on which the Secretary determines that any remaining capital 

investments will not be repaid. 

(6) DEFINITIONS.—For purposes of this subsection: 

(A) OFFICE.—The term ‘‘Office’’ means the Office of 

Small Business Lending Fund Program Oversight established under paragraph (1). 

(B) INSPECTOR GENERAL.—The term ‘‘Inspector General’’ means the Inspector General of the Department of 

the Treasury. 

(c) 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. 

(d) REQUIRED CERTIFICATIONS.— 

(1) ELIGIBLE INSTITUTION CERTIFICATION.—Each eligible 

institution that participates in the Program must 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 31 U.S.C. 5312(a)(2) and (c)(1)(A), 

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) LOAN RECIPIENTS.—With respect to funds received by 

an eligible institution under the Program, any business 

receiving a loan from the eligible institution using such funds 

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

such eligible institution that the principals of such business 

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)). 

(e) PROHIBITION ON PORNOGRAPHY.—None of the funds made 

available under this subtitle 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. 
H. R. 5297—92 

SEC. 4108. CREDIT REFORM; FUNDING. 

(a) CREDIT REFORM.—The cost of purchases of preferred stock 

and other financial instruments made as capital investments under 

this subtitle 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 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. 4109. 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 subtitle shall terminate 1 year after the date 

of enactment of this Act. 

(b) CONTINUATION OF OTHER AUTHORITIES.—The authorities 

of the Secretary under section 4104 shall not be limited by the 

termination date in subsection (a). 

SEC. 4110. PRESERVATION OF AUTHORITY. 

Nothing in this subtitle may be construed to limit the authority 

of the Secretary under any other provision of law. 

SEC. 4111. 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. 4112. STUDY AND REPORT WITH RESPECT TO WOMEN-OWNED, 

VETERAN-OWNED, AND MINORITY-OWNED BUSINESSES. 

(a) STUDY.—The Secretary shall conduct a study of the impact 

of the Program on women-owned businesses, veteran-owned 

businesses, and minority-owned businesses. 

(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). 

To the extent possible, the Secretary shall disaggregate the results 

of such study by ethnic group and gender. 

(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. 
H. R. 5297—93 

SEC. 4113. SENSE OF CONGRESS. 

It is the sense of Congress that the Federal Deposit Insurance 

Corporation and other bank regulators are sending mixed messages 

to banks regarding regulatory capital requirements and lending 

standards, which is a contributing cause of decreased small business 

lending and increased regulatory uncertainty at community banks. 

Subtitle B—Other Provisions 

PART I—SMALL BUSINESS EXPORT 

PROMOTION INITIATIVES 

SEC. 4221. SHORT TITLE. 

This part may be cited as the ‘‘Export Promotion Act of 2010’’. 

SEC. 4222. GLOBAL BUSINESS DEVELOPMENT AND PROMOTION ACTIVITIES OF THE DEPARTMENT OF COMMERCE. 

(a) INCREASE IN EMPLOYEES WITH RESPONSIBILITY FOR GLOBAL

BUSINESS DEVELOPMENT AND PROMOTION ACTIVITIES.— 

(1) IN GENERAL.—During the 24-month period beginning 

on the date of the enactment of this Act, the Secretary of 

Commerce shall increase the number of full-time departmental 

employees whose primary responsibilities involve promoting or 

facilitating participation by United States businesses in the 

global marketplace and facilitating the entry into, or expansion 

of, such participation by United States businesses. In carrying 

out this subsection, the Secretary shall ensure that— 

(A) the cohort of such employees is increased by not 

less than 80 persons; and 

(B) a substantial portion of the increased cohort is 

stationed outside the United States. 

(2) ENHANCED FOCUS ON UNITED STATES SMALL- AND

MEDIUM-SIZED BUSINESSES.—In carrying out this subsection, 

the Secretary shall take such action as may be necessary to 

ensure that the activities of the Department of Commerce 

relating to promoting and facilitating participation by United 

States businesses in the global marketplace include promoting 

and facilitating such participation by small and medium-sized 

businesses in the United States. 

(3) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary for each of the fiscal 

years 2011 and 2012 such sums as may be necessary to carry 

out this section. 

(b) ADDITIONAL FUNDING FOR GLOBAL BUSINESS DEVELOPMENT

AND PROMOTION ACTIVITIES OF THE DEPARTMENT OF COMMERCE.— (1) IN GENERAL.—There are authorized to be appropriated 

to the Secretary of Commerce for the period beginning on 

the date of the enactment of this Act and ending 18 months 

thereafter, $30,000,000 to promote or facilitate participation 

by United States businesses in the global marketplace and 

facilitating the entry into, or expansion of, such participation 

by United States businesses. 

(2) REQUIREMENTS.—In obligating and expending the funds 

authorized to be appropriated by paragraph (1), the Secretary 

of Commerce shall give preference to activities that— 
H. R. 5297—94 

(A) assist small- and medium-sized businesses in the 

United States; and 

(B) the Secretary determines will create or sustain 

the greatest number of jobs in the United States and obtain 

the maximum return on investment. 

SEC. 4223. ADDITIONAL FUNDING TO IMPROVE ACCESS TO GLOBAL 

MARKETS FOR RURAL BUSINESSES. 

(a) IN GENERAL.—There are authorized to be appropriated to the Secretary of Commerce $5,000,000 for each of the fiscal years 

2011 and 2012 for improving access to the global marketplace 

for goods and services provided by rural businesses in the United 

States. 

(b) REQUIREMENTS.—In obligating and expending the funds 

authorized to be appropriated by subsection (a), the Secretary of 

Commerce shall give preference to activities that— 

(1) assist small- and medium-sized businesses in the United 

States; and 

(2) the Secretary determines will create or sustain the 

greatest number of jobs in the United States and obtain the 

maximum return on investment. 

SEC. 4224. ADDITIONAL FUNDING FOR THE EXPORTECH PROGRAM. 

(a) IN GENERAL.—There are authorized to be appropriated to 

the Secretary of Commerce $11,000,000 for the period beginning 

on the date of the enactment of this Act and ending 18 months 

thereafter, to expand ExporTech, a joint program of the Hollings 

Manufacturing Partnership Program and the Export Assistance 

Centers of the Department of Commerce. 

(b) REQUIREMENTS.—In obligating and expending the funds 

authorized to be appropriated by subsection (a), the Secretary of 

Commerce shall give preference to activities that— 

(1) assist small- and medium-sized businesses in the United 

States; and 

(2) the Secretary determines will create or sustain the 

greatest number of jobs in the United States and obtain the 

maximum return on investment. 

SEC. 4225. ADDITIONAL FUNDING FOR THE MARKET DEVELOPMENT 

COOPERATOR PROGRAM OF THE DEPARTMENT OF COMMERCE. 

(a) IN GENERAL.—There are authorized to be appropriated to 

the Secretary of Commerce for the period beginning on the date 

of the enactment of this Act and ending 18 months thereafter, 

$15,000,000 for the Manufacturing and Services unit of the International Trade Administration— 

(1) to establish public-private partnerships under the 

Market Development Cooperator Program of the International 

Trade Administration; and 

(2) to underwrite a portion of the start-up costs for new 

projects carried out under that Program to strengthen the 

competitiveness and market share of United States industry, 

not to exceed, for each such project, the lesser of— 

(A) 1⁄3 of the total start-up costs for the project; or 

(B) $500,000. 

(b) REQUIREMENTS.—In obligating and expending the funds 

authorized to be appropriated by subsection (a), the Secretary of 

Commerce shall give preference to activities that— 
H. R. 5297—95 

(1) assist small- and medium-sized businesses in the United 

States; and 

(2) the Secretary determines will create or sustain the 

greatest number of jobs in the United States and obtain the 

maximum return on investment. 

SEC. 4226. HOLLINGS MANUFACTURING PARTNERSHIP PROGRAM; 

TECHNOLOGY INNOVATION PROGRAM. 

(a) HOLLINGS MANUFACTURING PARTNERSHIP PROGRAM.—Section 25(f) of the National Institute of Standards and Technology 

Act (15 U.S.C. 278k(f)) is amended by adding at the end the following: 

‘‘(7) GLOBAL MARKETPLACE PROJECTS.—In making awards 

under this subsection, the Director, in consultation with the 

Manufacturing Extension Partnership Advisory Board and the 

Secretary of Commerce, may— 

‘‘(A) take into consideration whether an application 

has significant potential for enhancing the competitiveness 

of small and medium-sized United States manufacturers 

in the global marketplace; and 

‘‘(B) give a preference to applications for such projects 

to the extent the Director deems appropriate, taking into 

account the broader purposes of this subsection.’’. 

(b) TECHNOLOGY INNOVATION PROGRAM.—In awarding grants, 

cooperative agreements, or contracts under section 28 of the 

National Institute of Standards and Technology Act (15 U.S.C. 

278n), in addition to the award criteria set forth in subsection 

(c) of that section, the Director of the National Institute of Standards and Technology may take into consideration whether an 

application has significant potential for enhancing the competitiveness of small- and medium-sized businesses in the United States 

in the global marketplace. The Director shall consult with the 

Technology Innovation Program Advisory Board and the Secretary 

of Commerce in implementing this subsection. 

SEC. 4227. SENSE OF THE SENATE CONCERNING FEDERAL 

COLLABORATION WITH STATES ON EXPORT PROMOTION 

ISSUES. 

It is the sense of the Senate that the Secretary of Commerce 

should enhance Federal collaboration with the States on export 

promotion issues by— 

(1) providing the necessary training to the staff at State 

international trade agencies to enable them to assist the United 

States and Foreign Commercial Service (established by section 

2301 of the Export Enhancement Act of 1988 (15 U.S.C. 4721)) 

in providing counseling and other export services to businesses 

in their communities; and 

(2) entering into agreements with State international trade 

agencies for those agencies to deliver export promotion services 

in their local communities in order to extend the outreach 

of United States and Foreign Commercial Service programs. 

SEC. 4228. REPORT ON TARIFF AND NONTARIFF BARRIERS. 

Not later than 90 days after the date of the enactment of 

this Act, the Secretary of Commerce, in consultation with the United 

States Trade Representative and other appropriate entities, shall 

report to Congress on the tariff and nontariff barriers imposed 

by Colombia, the Republic of Korea, and Panama with respect 
H. R. 5297—96 

to exports of articles from the United States, including articles 

exported or produced by small- and medium-sized businesses in 

the United States. 

PART II—MEDICARE FRAUD 

SEC. 4241. USE OF PREDICTIVE MODELING AND OTHER ANALYTICS 

TECHNOLOGIES TO IDENTIFY AND PREVENT WASTE, 

FRAUD, AND ABUSE IN THE MEDICARE FEE-FOR-SERVICE 

PROGRAM. 

(a) USE IN THE MEDICARE FEE-FOR-SERVICE PROGRAM.—The 

Secretary shall use predictive modeling and other analytics technologies (in this section referred to as ‘‘predictive analytics technologies’’) to identify improper claims for reimbursement and to 

prevent the payment of such claims under the Medicare fee-forservice program. 

(b) PREDICTIVE ANALYTICS TECHNOLOGIES REQUIREMENTS.—The 

predictive analytics technologies used by the Secretary shall— 

(1) capture Medicare provider and Medicare beneficiary 

activities across the Medicare fee-for-service program to provide 

a comprehensive view across all providers, beneficiaries, and 

geographies within such program in order to— 

(A) identify and analyze Medicare provider networks, 

provider billing patterns, and beneficiary utilization patterns; and 

(B) identify and detect any such patterns and networks 

that represent a high risk of fraudulent activity; 

(2) be integrated into the existing Medicare fee-for-service 

program claims flow with minimal effort and maximum efficiency; 

(3) be able to— 

(A) analyze large data sets for unusual or suspicious 

patterns or anomalies or contain other factors that are 

linked to the occurrence of waste, fraud, or abuse; 

(B) undertake such analysis before payment is made; 

and 

(C) prioritize such identified transactions for additional 

review before payment is made in terms of the likelihood 

of potential waste, fraud, and abuse to more efficiently 

utilize investigative resources; 

(4) capture outcome information on adjudicated claims for 

reimbursement to allow for refinement and enhancement of 

the predictive analytics technologies on the basis of such outcome information, including post-payment information about 

the eventual status of a claim; and 

(5) prevent the payment of claims for reimbursement that 

have been identified as potentially wasteful, fraudulent, or 

abusive until such time as the claims have been verified as 

valid. 

(c) IMPLEMENTATION REQUIREMENTS.— (1) REQUEST FOR PROPOSALS.—Not later than January 1, 

2011, the Secretary shall issue a request for proposals to carry 

out this section during the first year of implementation. To 

the extent the Secretary determines appropriate— 

(A) the initial request for proposals may include subsequent implementation years; and 
H. R. 5297—97 

(B) the Secretary may issue additional requests for 

proposals with respect to subsequent implementation years. 

(2) FIRST IMPLEMENTATION YEAR.—The initial request for 

proposals issued under paragraph (1) shall require the contractors selected to commence using predictive analytics technologies on July 1, 2011, in the 10 States identified by the 

Secretary as having the highest risk of waste, fraud, or abuse 

in the Medicare fee-for-service program. 

(3) SECOND IMPLEMENTATION YEAR.—Based on the results 

of the report and recommendation required under subsection 

(e)(1)(B), the Secretary shall expand the use of predictive analytics technologies on October 1, 2012, to apply to an additional 

10 States identified by the Secretary as having the highest 

risk of waste, fraud, or abuse in the Medicare fee-for-service 

program, after the States identified under paragraph (2). 

(4) THIRD IMPLEMENTATION YEAR.—Based on the results 

of the report and recommendation required under subsection 

(e)(2), the Secretary shall expand the use of predictive analytics 

technologies on January 1, 2014, to apply to the Medicare 

fee-for-service program in any State not identified under paragraph (2) or (3) and the commonwealths and territories. 

(5) FOURTH IMPLEMENTATION YEAR.—Based on the results 

of the report and recommendation required under subsection 

(e)(3), the Secretary shall expand the use of predictive analytics 

technologies, beginning April 1, 2015, to apply to Medicaid 

and CHIP. To the extent the Secretary determines appropriate, 

such expansion may be made on a phased-in basis. 

(6) OPTION FOR REFINEMENT AND EVALUATION.—If, with 

respect to the first, second, or third implementation year, the 

Inspector General of the Department of Health and Human 

Services certifies as part of the report required under subsection 

(e) for that year no or only nominal actual savings to the 

Medicare fee-for-service program, the Secretary may impose 

a moratorium, not to exceed 12 months, on the expansion 

of the use of predictive analytics technologies under this section 

for the succeeding year in order to refine the use of predictive 

analytics technologies to achieve more than nominal savings 

before further expansion. If a moratorium is imposed in accordance with this paragraph, the implementation dates applicable 

for the succeeding year or years shall be adjusted to reflect 

the length of the moratorium period. 

(d) CONTRACTOR SELECTION, QUALIFICATIONS, AND DATA ACCESS

REQUIREMENTS.— 

(1) SELECTION.— 

(A) IN GENERAL.—The Secretary shall select contractors 

to carry out this section using competitive procedures as 

provided for in the Federal Acquisition Regulation. 

(B) NUMBER OF CONTRACTORS.—The Secretary shall 

select at least 2 contractors to carry out this section with 

respect to any year. 

(2) QUALIFICATIONS.— 

(A) IN GENERAL.—The Secretary shall enter into a contract under this section with an entity only if the entity— 

(i) has leadership and staff who— 
H. R. 5297—98 

(I) have the appropriate clinical knowledge of, 

and experience with, the payment rules and regulations under the Medicare fee-for-service program; 

and 

(II) have direct management experience and 

proficiency utilizing predictive analytics technologies necessary to carry out the requirements 

under subsection (b); or 

(ii) has a contract, or will enter into a contract, 

with another entity that has leadership and staff 

meeting the criteria described in clause (i). 

(B) CONFLICT OF INTEREST.—The Secretary may only 

enter into a contract under this section with an entity 

to the extent that the entity complies with such conflict 

of interest standards as are generally applicable to Federal 

acquisition and procurement. 

(3) DATA ACCESS.—The Secretary shall provide entities with 

a contract under this section with appropriate access to data 

necessary for the entity to use predictive analytics technologies 

in accordance with the contract. 

(e) REPORTING REQUIREMENTS.— 

(1) FIRST IMPLEMENTATION YEAR REPORT.—Not later than 

3 months after the completion of the first implementation year 

under this section, the Secretary shall submit to the appropriate 

committees of Congress and make available to the public a 

report that includes the following: 

(A) A description of the implementation of the use 

of predictive analytics technologies during the year. 

(B) A certification of the Inspector General of the 

Department of Health and Human Services that— 

(i) specifies the actual and projected savings to 

the Medicare fee-for-service program as a result of 

the use of predictive analytics technologies, including 

estimates of the amounts of such savings with respect 

to both improper payments recovered and improper 

payments avoided; 

(ii) the actual and projected savings to the Medicare fee-for-service program as a result of such use 

of predictive analytics technologies relative to the 

return on investment for the use of such technologies 

and in comparison to other strategies or technologies 

used to prevent and detect fraud, waste, and abuse 

in the Medicare fee-for-service program; and 

(iii) includes recommendations regarding— 

(I) whether the Secretary should continue to 

use predictive analytics technologies; 

(II) whether the use of such technologies 

should be expanded in accordance with the requirements of subsection (c); and 

(III) any modifications or refinements that 

should be made to increase the amount of actual 

or projected savings or mitigate any adverse 

impact on Medicare beneficiaries or providers. 

(C) An analysis of the extent to which the use of 

predictive analytics technologies successfully prevented and 

detected waste, fraud, or abuse in the Medicare fee-forservice program. 
H. R. 5297—99 

(D) A review of whether the predictive analytics technologies affected access to, or the quality of, items and 

services furnished to Medicare beneficiaries. 

(E) A review of what effect, if any, the use of predictive 

analytics technologies had on Medicare providers. 

(F) Any other items determined appropriate by the 

Secretary. 

(2) SECOND YEAR IMPLEMENTATION REPORT.—Not later than 

3 months after the completion of the second implementation 

year under this section, the Secretary shall submit to the 

appropriate committees of Congress and make available to the 

public a report that includes, with respect to such year, the 

items required under paragraph (1) as well as any other additional items determined appropriate by the Secretary with 

respect to the report for such year. 

(3) THIRD YEAR IMPLEMENTATION REPORT.—Not later than 

3 months after the completion of the third implementation 

year under this section, the Secretary shall submit to the 

appropriate committees of Congress, and make available to 

the public, a report that includes with respect to such year, 

the items required under paragraph (1), as well as any other 

additional items determined appropriate by the Secretary with 

respect to the report for such year, and the following: 

(A) An analysis of the cost-effectiveness and feasibility 

of expanding the use of predictive analytics technologies 

to Medicaid and CHIP. 

(B) An analysis of the effect, if any, the application 

of predictive analytics technologies to claims under Medicaid and CHIP would have on States and the commonwealths and territories. 

(C) Recommendations regarding the extent to which 

technical assistance may be necessary to expand the 

application of predictive analytics technologies to claims 

under Medicaid and CHIP, and the type of any such assistance. 

(f) INDEPENDENT EVALUATION AND REPORT.— (1) EVALUATION.—Upon completion of the first year in 

which predictive analytics technologies are used with respect 

to claims under Medicaid and CHIP, the Secretary shall, by 

grant, contract, or interagency agreement, conduct an independent evaluation of the use of predictive analytics technologies under the Medicare fee-for-service program and Medicaid and CHIP. The evaluation shall include an analysis with 

respect to each such program of the items required for the 

third year implementation report under subsection (e)(3). 

(2) REPORT.—Not later than 18 months after the evaluation 

required under paragraph (1) is initiated, the Secretary shall 

submit a report to Congress on the evaluation that shall include 

the results of the evaluation, the Secretary’s response to such 

results and, to the extent the Secretary determines appropriate, 

recommendations for legislation or administrative actions. 

(g) WAIVER AUTHORITY.—The Secretary may waive such provisions of titles XI, XVIII, XIX, and XXI of the Social Security Act, 

including applicable prompt payment requirements under titles 

XVIII and XIX of such Act, as the Secretary determines to be 

appropriate to carry out this section. 

(h) FUNDING.— 
H. R. 5297—100 

(1) APPROPRIATION.—Out of any funds in the Treasury 

not otherwise appropriated, there is appropriated to the Secretary to carry out this section, $100,000,000 for the period 

beginning January 1, 2011, to remain available until expended. 

(2) RESERVATIONS.— 

(A) INDEPENDENT EVALUATION.—The Secretary shall 

reserve not more than 5 percent of the funds appropriated 

under paragraph (1) for purposes of conducting the independent evaluation required under subsection (f). 

(B) APPLICATION TO MEDICAID AND CHIP.—The Secretary shall reserve such portion of the funds appropriated 

under paragraph (1) as the Secretary determines appropriate for purposes of providing assistance to States for 

administrative expenses in the event of the expansion of 

predictive analytics technologies to claims under Medicaid 

and CHIP. 

(i) DEFINITIONS.—In this section: 

(1) COMMONWEALTHS AND TERRITORIES.—The term 

‘‘commonwealth and territories’’ includes the Commonwealth 

of Puerto Rico, the Virgin Islands, Guam, American Samoa, 

the Commonwealth of the Northern Mariana Islands, and any 

other territory or possession of the United States in which 

the Medicare fee-for-service program, Medicaid, or CHIP operates. 

(2) CHIP.—The term ‘‘CHIP’’ means the Children’s Health 

Insurance Program established under title XXI of the Social 

Security Act (42 U.S.C. 1397aa et seq.). 

(3) MEDICAID.—The term ‘‘Medicaid’’ means the program 

to provide grants to States for medical assistance programs 

established under title XIX of the Social Security Act (42 U.S.C. 

1396 et seq.). 

(4) MEDICARE BENEFICIARY.—The term ‘‘Medicare beneficiary’’ means an individual enrolled in the Medicare fee-forservice program. 

(5) MEDICARE FEE-FOR-SERVICE PROGRAM.—The term ‘‘Medicare fee-for-service program’’ means the original medicare feefor-service program under parts A and B of title XVIII of 

the Social Security Act (42 U.S.C. 1395 et seq.). 

(6) MEDICARE PROVIDER.—The term ‘‘Medicare provider’’ 

means a provider of services (as defined in subsection (u) of 

section 1861 of the Social Security Act (42 U.S.C. 1395x)) and 

a supplier (as defined in subsection (d) of such section). 

(7) SECRETARY.—The term ‘‘Secretary’’ means the Secretary 

of Health and Human Services, acting through the Administrator of the Centers for Medicare & Medicaid Services. 

(8) STATE.—The term ‘‘State’’ means each of the 50 States 

and the District of Columbia. 

TITLE V—BUDGETARY PROVISIONS 

SEC. 5001. DETERMINATION OF BUDGETARY EFFECTS. 

The budgetary effects of this Act, for the purpose of complying 

with the Statutory Pay-As-You-Go-Act of 2010, shall be determined 

by reference to the latest statement titled ‘‘Budgetary Effects of 

PAYGO Legislation’’ for this Act, submitted for printing in the 
H. R. 5297—101 

Congressional Record by the Chairman of the Senate Budget Committee, provided that such statement has been submitted prior 

to the vote on passage. 

Speaker of the House of Representatives. 

Vice President of the United States and

President of the Senate.