II 

Calendar No. 435 

111TH CONGRESS 

2D SESSION H. R. 5297 

IN THE SENATE OF THE UNITED STATES 

JUNE 18, 2010 

Received and read the first time 

JUNE 21, 2010 

Read the second time and placed on the calendar 

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. 


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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This title may be cited as the 

5 ‘‘Small Business Jobs and Credit Act of 2010’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

TITLE I—SMALL BUSINESS LENDING FUND 

Sec. 101. Purpose. 

Sec. 102. Definitions. 

Sec. 103. Small Business Lending Fund. 

Sec. 104. Additional authorities of the Secretary. 

Sec. 105. Considerations. 

Sec. 106. Reports. 

Sec. 107. Oversight and audits. 

Sec. 108. Credit reform; Funding. 

Sec. 109. Termination and continuation of authorities. 

Sec. 110. Preservation of authority. 

Sec. 111. Assurances. 

Sec. 112. Study and report with respect to women-owned, veteran-owned, and 

minority-owned businesses. 

Sec. 113. Temporary amortization authority. 

Sec. 114. Sense of Congress. 

TITLE II—STATE SMALL BUSINESS CREDIT INITIATIVE 

Sec. 201. Short title. 

Sec. 202. Definitions. 

Sec. 203. Federal funds allocated to States. 

Sec. 204. Approving States for participation. 

Sec. 205. Approving State capital access programs. 

Sec. 206. Approving collateral support and other innovative credit access and 

guarantee initiatives for small businesses and manufacturers. 

Sec. 207. Reports. 

Sec. 208. Remedies for State program termination or failures. 

Sec. 209. Implementation and administration. 

Sec. 210. Regulations. 

Sec. 211. Oversight and audits. 

TITLE III—SMALL BUSINESS EARLY-STAGE INVESTMENT 

PROGRAM 

Sec. 301. Short title. 

Sec. 302. Small business early-stage investment program. 

Sec. 303. Regulations. 


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Sec. 304. Prohibitions on earmarks. 

TITLE IV—MISCELLANEOUS 

Sec. 401. Budgetary effects. 

TITLE V—TAX PROVISIONS 

Sec. 500. Short title; etc. 

Subtitle A—Small Business Tax Incentives 

PART 1—GENERAL PROVISIONS

Sec. 501. Temporary exclusion of 100 percent of gain on certain small business 

stock. 

PART 2—LIMITATIONS AND REPORTING ON CERTAIN PENALTIES

Sec. 511. Limitation on penalty for failure to disclose certain information. 

Sec. 512. Annual reports on penalties and certain other enforcement actions. 

PART 3—OTHER PROVISIONS

Sec. 521. Increase in amount allowed as deduction for start-up expenditures. 

Sec. 522. Nonrecourse small business investment company loans from the Small 

Business Administration treated as amounts at risk. 

Sec. 523. Benefits under the Small Business Borrower Assistance Program excluded from gross income. 

Subtitle B—Revenue Provisions 

Sec. 531. Required minimum 10-year term, etc., for grantor retained annuity 

trusts. 

Sec. 532. Crude tall oil ineligible for cellulosic biofuel producer credit. 

Sec. 533. Time for payment of corporate estimated taxes. 

TITLE VI—PLAIN WRITING ACT 

Sec. 601. Short title. 

Sec. 602. Purpose. 

Sec. 603. Definitions. 

Sec. 604. Responsibilities of Federal agencies. 

Sec. 605. Reports to Congress. 

TITLE VII—SENSE OF CONGRESS ON AGRICULTURE AND 

FARMING SMALL BUSINESS LOANS 

Sec. 701. Sense of Congress. 

TITLE VIII—SMALL BUSINESS BORROWER ASSISTANCE PROGRAM 

Sec. 801. Short title. 

Sec. 802. Small Business Borrower Assistance Program. 


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1 TITLE I—SMALL BUSINESS 

2 LENDING FUND 

3 SEC. 101. PURPOSE. 

4 The purpose of this title is to address the ongoing 

5 effects of the financial crisis on small businesses by pro6 viding temporary authority to the Secretary of the Treas7 ury to make capital investments in eligible institutions in 

8 order to increase the availability of credit for small busi9 nesses. 

10 SEC. 102. DEFINITIONS. 

11 For purposes of this title: 

12 (1) APPROPRIATE COMMITTEES OF CON13 GRESS.—The term ‘‘appropriate committees of Con14 gress’’ means— 

15 (A) the Committee on Small Business and 

16 Entrepreneurship, the Committee on Agri17 culture, Nutrition, and Forestry, the Committee 

18 on Banking, Housing, and Urban Affairs, the 

19 Committee on Finance, the Committee on the 

20 Budget, and the Committee on Appropriations 

21 of the Senate; and 

22 (B) the Committee on Small Business, the 

23 Committee on Agriculture, the Committee on 

24 Financial Services, the Committee on Ways and 

25 Means, the Committee on the Budget, and the 


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1 Committee on Appropriations of the House of 

2 Representatives. 

3 (2) APPROPRIATE FEDERAL BANKING AGEN4 CY.—The term ‘‘appropriate Federal banking agen5 cy’’ has the meaning given such term under section 

6 3(q) of the Federal Deposit Insurance Act (12 

7 U.S.C. 1813(q)). 

8 (3) BANK HOLDING COMPANY.—The term 

9 ‘‘bank holding company’’ has the meaning given 

10 such term under section 2(a)(1) of the Bank Hold11 ing Company Act of 1956 (12 U.S.C. 

12 1841(2)(a)(1)). 

13 (4) CALL REPORT.—The term ‘‘call report’’ 

14 means— 

15 (A) reports of Condition and Income sub16 mitted to the Office of the Comptroller of the 

17 Currency, the Board of Governors of the Fed18 eral Reserve System, and the Federal Deposit 

19 Insurance Corporation; 

20 (B) the Office of Thrift Supervision Thrift 

21 Financial Report; 

22 (C) any report that is designated by the 

23 Office of the Comptroller of the Currency, the 

24 Board of Governors of the Federal Reserve Sys25 tem, the Federal Deposit Insurance CorporaVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 tion, or the Office of Thrift Supervision, as ap2 plicable, as a successor to any report referred to 

3 in subparagraph (A) or (B); 

4 (D) standard reports of Condition and In5 come submitted by Community Development 

6 Financial Institution loan funds to the Commu7 nity Development Financial Institutions Fund; 

8 and 

9 (E) with respect to an eligible institution 

10 for which no report exists that is described 

11 under subparagraph (A), (B), or (C), such 

12 other report or set of information as the Sec13 retary, in consultation with the Administrator 

14 of the Small Business Administration, may pre15 scribe. 

16 (5) CDCI.—The term ‘‘CDCI’’ means the Com17 munity Development Capital Initiative created by 

18 the Secretary under the Troubled Asset Relief Pro19 gram established by the Emergency Economic Sta20 bilization Act of 2008. 

21 (6) CDCI INVESTMENT.—The term ‘‘CDCI in22 vestment’’ means, with respect to any eligible insti23 tution, the principal amount of any investment made 

24 by the Secretary in such eligible institution under 

25 the CDCI that has not been repaid. 


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1 (7) CPP.—The term ‘‘CPP’’ means the Capital 

2 Purchase Program created by the Secretary under 

3 the Troubled Asset Relief Program established by 

4 the Emergency Economic Stabilization Act of 2008. 

5 (8) CPP INVESTMENT.—The term ‘‘CPP in6 vestment’’ means, with respect to any eligible insti7 tution, the principal amount of any investment made 

8 by the Secretary in such eligible institution under 

9 the CPP that has not been repaid. 

10 (9) ELIGIBLE INSTITUTION.—The term ‘‘eligi11 ble institution’’ means— 

12 (A) any insured depository institution, 

13 which— 

14 (i) is not controlled by a bank holding 

15 company or savings and loan holding com16 pany that is also an eligible institution; 

17 (ii) has total assets of equal to or less 

18 than $10,000,000,000, as reported in the 

19 call report as of the end of the fourth 

20 quarter of calendar year 2009; and 

21 (iii) is not directly or indirectly con22 trolled by any company or other entity that 

23 has total consolidated assets of more than 

24 $10,000,000,000, as so reported; 


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1 (B) any bank holding company which has 

2 total consolidated assets of equal to or less than 

3 $10,000,000,000; 

4 (C) any savings and loan holding company 

5 which has total consolidated assets of equal to 

6 or less than $10,000,000,000; 

7 (D) any community development financial 

8 institution loan fund which has total assets of 

9 equal to or less than $10,000,000,000; and 

10 (E) any small business lending company 

11 that has total assets of equal to or less than 

12 $10,000,000,000. 

13 (10) FUND.—The term ‘‘Fund’’ means the 

14 Small Business Lending Fund established by section 

15 4(a)(1) of this title. 

16 (11) INSURED DEPOSITORY INSTITUTION.—The 

17 term ‘‘insured depository institution’’ has the mean18 ing given such term under section 3(c)(2) of the 

19 Federal Deposit Insurance Act (12 U.S.C. 

20 1813(c)(2)). 

21 (12) PROGRAM.—The term ‘‘Program’’ means 

22 the Small Business Lending Fund Program author23 ized by section 4(a)(2) of this title. 

24 (13) SAVINGS AND LOAN HOLDING COMPANY.— 

25 The term ‘‘savings and loan holding company’’ has 


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1 the meaning given such term under section 

2 10(a)(1)(D) of the Home Owners’ Loan Act (12 

3 U.S.C. 1467a(a)(1)(D)). 

4 (14) SECRETARY.—The term ‘‘Secretary’’ 

5 means the Secretary of the Treasury. 

6 (15) SMALL BUSINESS LENDING.— 

7 (A) IN GENERAL.—The term ‘‘small busi8 ness lending’’ means small business lending, as 

9 defined by and reported in an eligible institu10 tion’s quarterly call report, where each loan 

11 comprising such lending is made to a small 

12 business and is one of the following types: 

13 (i) Commercial and industrial loans. 

14 (ii) Owner-occupied nonfarm, nonresi15 dential real estate loans. 

16 (iii) Loans to finance agricultural pro17 duction and other loans to farmers. 

18 (iv) Loans secured by farmland. 

19 (v) Nonowner-occupied commercial 

20 real estate loans. 

21 (vi) CONSTRUCTION, LAND DEVELOP22 MENT, AND OTHER LAND LOANS.— 

23 (I) IN GENERAL.—Loans secured 

24 by real estate— 


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1 (aa) that are made to fi2 nance— 

3 (AA) land development 

4 that is preparatory to erect5 ing new structures, includ6 ing improving land, laying 

7 sewers, and laying water 

8 pipes; or 

9 (BB) the on-site con10 struction of industrial, com11 mercial, residential, or farm 

12 buildings; 

13 (bb) that is vacant land, ex14 cept land known to be used or 

15 usable for agricultural purposes, 

16 such as crop and livestock pro17 duction; 

18 (cc) the proceeds of which 

19 are to be used to acquire and im20 prove developed or undeveloped 

21 property; or 

22 (dd) that are made under 

23 title I or title X of the National 

24 Housing Act. 


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1 (II) CONSTRUCTION INDUSTRY

2 REQUIREMENT.—Subclause (I) shall 

3 only apply to loans that are extended 

4 to small business concerns in the con5 struction industry, as such term is de6 fined by the Secretary in consultation 

7 with the Administrator of the Small 

8 Business Administration. 

9 (III) CONSTRUCTION DEFINED.— 

10 For purposes of this clause, the term 

11 ‘‘construction’’ includes the construc12 tion of new structures, additions or al13 terations to existing structures, and 

14 the demolition of existing structures 

15 to make way for new structures. 

16 (B) TREATMENT OF HOLDING COMPA17 NIES.—In the case of eligible institutions that 

18 are bank holding companies or savings and loan 

19 holding companies having one or more insured 

20 depository institution subsidiaries, small busi21 ness lending shall be measured based on the 

22 combined small business lending reported in the 

23 call report of the insured depository institution 

24 subsidiaries. 


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1 (16) MINORITY-OWNED AND WOMEN-OWNED

2 BUSINESS.—The terms ‘‘minority-owned business’’ 

3 and ‘‘women-owned business’’ shall have the mean4 ing given the terms ‘‘minority-owned business’’ and 

5 ‘‘women’s business’’, respectively, under section 

6 21A(r)(4) of the Federal Home Loan Bank Act (12 

7 U.S.C. 1441A(r)(4)). 

8 (17) CDFI; COMMUNITY DEVELOPMENT FINAN9 CIAL INSTITUTION.—The terms ‘‘CDFI’’ and ‘‘com10 munity development financial institution’’ have the 

11 meaning given the term ‘‘community development fi12 nancial institution’’ under the Riegle Community 

13 Development and Regulatory Improvement Act of 

14 1994. 

15 (18) CDLF; COMMUNITY DEVELOPMENT LOAN

16 FUND.—The terms ‘‘CDLF’’ and ‘‘community devel17 opment loan fund’’ mean any entity that— 

18 (A) is certified by the Department of the 

19 Treasury as a community development financial 

20 institution loan fund; 

21 (B) is exempt from taxation under the In22 ternal Revenue Code of 1986; and 

23 (C) has assets under $10,000,000,000 as 

24 of the fourth quarter of calendar year 2009. 


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1 (19) SMALL BUSINESS.—The term ‘‘small busi2 ness’’ has the meaning given the term ‘‘small busi3 ness concern’’ under section 3 of the Small Business 

4 Act (15 U.S.C. 632). 

5 (20) SMALL BUSINESS LENDING COMPANY.— 

6 The term ‘‘small business lending company’’ has the 

7 meaning given such term under section 3(r)(1) of 

8 the Small Business Act (15 U.S.C. 632(r)(1)). 

9 (21) VETERAN-OWNED BUSINESS.— 

10 (A) The term ‘‘veteran-owned business’’ 

11 means a business— 

12 (i) more than 50 percent of the own13 ership or control of which is held by 1 or 

14 more veterans; 

15 (ii) more than 50 percent of the net 

16 profit or loss of which accrues to 1 or more 

17 veterans; and 

18 (iii) a significant percentage of senior 

19 management positions of which are held by 

20 veterans. 

21 (B) For purposes of this paragraph, the 

22 term ‘‘veteran’’ has the meaning given such 

23 term in section 101(2) of title 38, United 

24 States Code. 


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1 SEC. 103. SMALL BUSINESS LENDING FUND. 

2 (a) FUND AND PROGRAM.— 

3 (1) FUND ESTABLISHED.—There is established 

4 in the Treasury of the United States a fund to be 

5 known as the ‘‘Small Business Lending Fund’’, 

6 which shall be administered by the Secretary. 

7 (2) PROGRAMS AUTHORIZED.—The Secretary is 

8 authorized to establish the Small Business Lending 

9 Fund Program for using the Fund consistent with 

10 this title. 

11 (b) USE OF FUND.— 

12 (1) IN GENERAL.—Subject to paragraph (2), 

13 the Fund shall be available to the Secretary, without 

14 further appropriation or fiscal year limitation, for 

15 the costs of purchases (including commitments to 

16 purchase), and modifications of such purchases, of 

17 preferred stock and other financial instruments from 

18 eligible institutions on such terms and conditions as 

19 are determined by the Secretary in accordance with 

20 this title. For purposes of this paragraph and with 

21 respect to an eligible institution, the term ‘‘other fi22 nancial instruments’’ shall include only debt instru23 ments for which such eligible institution is fully lia24 ble or equity equivalent capital of the eligible institu25 tion. Such debt instruments may be subordinated to 


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1 the claims of other creditors of the eligible institu2 tion. 

3 (2) MAXIMUM PURCHASE LIMIT.—The aggre4 gate amount of purchases (and commitments to pur5 chase) made pursuant to paragraph (1) may not ex6 ceed $30,000,000,000. 

7 (3) PROCEEDS USED TO PAY DOWN PUBLIC

8 DEBT.—All funds received by the Secretary in con9 nection with purchases made pursuant to paragraph 

10 (1), including interest payments, dividend payments, 

11 and proceeds from the sale of any financial instru12 ment, shall be paid into the general fund of the 

13 Treasury for reduction of the public debt. 

14 (4) LIMITATION ON PURCHASES FROM

15 CDLFS.— 

16 (A) IN GENERAL.—Not more than 1 per17 cent of the value of purchases made by the Sec18 retary in carrying out the Program may be 

19 used to make purchases from community devel20 opment loan funds. 

21 (B) ELIGIBILITY STANDARDS.—The Sec22 retary, in consultation with the Community De23 velopment Financial Institutions Fund, shall 

24 develop eligibility criteria to determine the fi25 nancial ability of a CDLF to participate in the 


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1 Program and repay the investment. Such cri2 teria may include net asset ratio to total assets, 

3 ratio of loan loss reserves to loans and leases 90 

4 days or more delinquent (including loans sold 

5 with full recourse), positive net income meas6 ured on a 3-year rolling average, operating li7 quidity ratio, ratio of loans and leases 90 days 

8 or more delinquent (including loans sold with 

9 full recourse) to total equity plus loan loss re10 serves or any other measures deemed appro11 priate. In addition, CDLFs participating in the 

12 Program shall submit audited financial state13 ments to the Secretary, have a clean audit opin14 ion, and have at least three years of operating 

15 experience. 

16 (c) CREDITS TO THE FUND.—There shall be credited 

17 to the Fund amounts made available pursuant to section 

18 9, to the extent provided by appropriations Acts. 

19 (d) TERMS.— 

20 (1) APPLICATION.— 

21 (A) INSTITUTIONS WITH ASSETS OF

22 $1,000,000,000 OR LESS.—Eligible institutions 

23 having total assets equal to or less than 

24 $1,000,000,000, as reported in a call report as 

25 of the end of the fourth quarter of calendar 


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1 year 2009, may apply to receive a capital in2 vestment from the Fund in an amount not ex3 ceeding 5 percent of risk-weighted assets, as re4 ported in the call report immediately preceding 

5 the date of application, less the amount of any 

6 CDCI investment and any CPP investment. 

7 (B) INSTITUTIONS WITH ASSETS OF MORE

8 THAN $1,000,000,000 AND LESS THAN

9 $10,000,000,000.—Eligible institutions having 

10 total assets of more than $1,000,000,000 but 

11 less than $10,000,000,000, as of the end of the 

12 fourth quarter of calendar year 2009, may 

13 apply to receive a capital investment from the 

14 Fund in an amount not exceeding 3 percent of 

15 risk-weighted assets, as reported in the call re16 port immediately preceding the date of applica17 tion, less the amount of any CDCI investment 

18 and any CPP investment. 

19 (C) TREATMENT OF HOLDING COMPA20 NIES.—In the case of an eligible institution that 

21 is a bank holding company or a savings and 

22 loan holding company having one or more in23 sured depository institution subsidiaries, total 

24 assets shall be measured based on the combined 

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1 sured depository institution subsidiaries as of 

2 the end of the fourth quarter of calendar year 

3 2009 and risk-weighted assets shall be meas4 ured based on the combined risk-weighted as5 sets of the insured depository institution sub6 sidiaries as reported in the call report imme7 diately preceding the date of application. 

8 (D) TREATMENT OF APPLICANTS THAT

9 ARE INSTITUTIONS CONTROLLED BY HOLDING

10 COMPANIES.—If an eligible institution that ap11 plies to receive a capital investment under the 

12 Program is under the control of a bank holding 

13 company or a savings and loan holding com14 pany, then the Secretary may use the Fund to 

15 purchase preferred stock or other financial in16 struments from the top-tier bank holding com17 pany or savings and loan holding company of 

18 such eligible institution, as applicable. For pur19 poses of this paragraph, the term ‘‘control’’ 

20 with respect to a bank holding company shall 

21 have the same meaning as in section 2(a)(2) of 

22 the Bank Holding Company Act of 1956 (12 

23 U.S.C. 1841(2)(a)(2)). For purposes of this 

24 paragraph, the term ‘‘control’’ with respect to a 

25 savings and loan holding company shall have 


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1 the same meaning as in 10(a)(2) of the Home 

2 Owners’ Loan Act (12 U.S.C. 1467a(a)(2)). 

3 (E) REQUIREMENT TO PROVIDE A SMALL

4 BUSINESS LENDING PLAN.—At the time that an 

5 applicant submits an application to the Sec6 retary for a capital investment under the Pro7 gram, the applicant shall deliver to the appro8 priate Federal banking agency and, for appli9 cants that are State-chartered banks, to the ap10 propriate State banking regulator, a small busi11 ness lending plan describing how the applicant’s 

12 business strategy and operating goals will allow 

13 it to address the needs of small businesses in 

14 the areas it serves, as well as a plan to provide 

15 linguistically and culturally appropriate out16 reach, where appropriate. This plan shall be 

17 confidential supervisory information. 

18 (F) TREATMENT OF APPLICANTS THAT

19 ARE COMMUNITY DEVELOPMENT LOAN

20 FUNDS.—Eligible institutions that are commu21 nity development loan funds may apply to re22 ceive a capital investment from the Fund in an 

23 amount not exceeding 10 percent of total as24 sets, as reported in the call report immediately 

25 preceding the date of application. 


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1 (G) ELECTION TO INCLUDE OTHER NON2 FARM, NONRESIDENTIAL REAL ESTATE LOANS

3 IN AMOUNT OF SMALL BUSINESS LENDING.—At 

4 the time that an applicant submits an applica5 tion to the Secretary for a capital investment 

6 under the Program, the applicant may notify 

7 the Secretary that it elects to have included in 

8 the determination of the amount of its small 

9 business lending, for purposes of the computa10 tions made under paragraph (4), the amount of 

11 lending reported as other nonfarm, nonresiden12 tial real estate loans in its quarterly call report, 

13 but for purposes of this subparagraph, other 

14 nonfarm, nonresidential real estate loans shall 

15 not include a loan having an original amount 

16 greater than $10,000,000. If an applicant 

17 makes the election under this subparagraph, the 

18 amount of lending reported as other nonfarm, 

19 nonresidential real estate loans shall be in20 cluded in the determination of the amount of its 

21 small business lending for purposes of the com22 putations made under paragraph (4). 

23 (2) CONSULTATION WITH REGULATORS.—For 

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1 ital investment under the Program, the Secretary 

2 shall— 

3 (A) consult with the appropriate Federal 

4 banking agency or, in the case of an eligible in5 stitution that is a non-depository community 

6 development financial institution, the Commu7 nity Development Financial Institution Fund, 

8 for the eligible institution to determine whether 

9 the eligible institution may receive such capital 

10 investment; 

11 (B) in the case of an eligible institution 

12 that is a State-chartered bank, consider any 

13 views received from the State banking regulator 

14 of the State of the eligible institution regarding 

15 the financial condition of the eligible institution; 

16 and 

17 (C) in the case of a community develop18 ment financial institution loan fund, consult 

19 with the Community Development Financial In20 stitution Fund. 

21 (3) INELIGIBILITY OF INSTITUTIONS ON FDIC

22 PROBLEM BANK LIST.— 

23 (A) IN GENERAL.—An eligible institution 

24 may not receive any capital investment under 

25 the Program if— 


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1 (i) such institution is on the FDIC 

2 problem bank list; or 

3 (ii) such institution has been removed 

4 from the FDIC problem bank list for less 

5 than 90 days. 

6 (B) CONSTRUCTION.—Nothing in subpara7 graph (A) shall be construed as limiting the dis8 cretion of the Secretary to deny the application 

9 of an eligible institution that is not on the 

10 FDIC problem bank list. 

11 (C) FDIC PROBLEM BANK LIST DE12 FINED.—For purposes of this subparagraph, 

13 the term ‘‘FDIC problem bank list’’ means the 

14 list of institutions with a current rating of 4 or 

15 5 under the Uniform Financial Institutions 

16 Rating System, or such other list designated by 

17 the Federal Deposit Insurance Corporation. 

18 (4) INCENTIVES TO LEND.— 

19 (A) REQUIREMENTS ON PREFERRED

20 STOCK AND OTHER FINANCIAL INSTRU21 MENTS.—Any preferred stock or other financial 

22 instrument issued to Treasury by an eligible in23 stitution receiving a capital investment under 

24 the Program shall provide that— 


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1 (i) the rate at which dividends or in2 terest are payable shall be 5 percent per 

3 annum initially; 

4 (ii) within the first 2 years after the 

5 date of the capital investment under the 

6 Program, the rate may be adjusted based 

7 on the amount of an eligible institution’s 

8 small business lending. Changes in the 

9 amount of small business lending shall be 

10 measured against the average amount of 

11 small business lending reported by the eli12 gible institution in its call reports for the 

13 4 full quarters immediately preceding the 

14 enactment of this title, minus adjustments 

15 from each quarterly balance in respect 

16 of— 

17 (I) net loan charge offs with re18 spect to small business lending; and 

19 (II) gains realized by the eligible 

20 institution resulting from mergers, ac21 quisitions or purchases of loans after 

22 origination and syndication; which ad23 justments shall be determined in ac24 cordance with guidance promulgated 

25 by the Secretary; and 


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1 (iii) during any calendar quarter dur2 ing the initial 2-year period referred to in 

3 clause (ii), an institution’s rate shall be ad4 justed to reflect the following schedule, 

5 based on that institution’s change in the 

6 amount of small business lending relative 

7 to the baseline— 

8 (I) if the amount of small busi9 ness lending has increased by less 

10 than 2.5 percent, the dividend or in11 terest rate shall be 5 percent; 

12 (II) if the amount of small busi13 ness lending has increased by 2.5 per14 cent or greater, but by less than 5.0 

15 percent, the dividend or interest rate 

16 shall be 4 percent; 

17 (III) if the amount of small busi18 ness lending has increased by 5.0 per19 cent or greater, but by less than 7.5 

20 percent, the dividend or interest rate 

21 shall be 3 percent; 

22 (IV) if the amount of small busi23 ness lending has increased by 7.5 per24 cent or greater, and but by less than 


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1 10.0 percent, the dividend or interest 

2 rate shall be 2 percent; or 

3 (V) if the amount of small busi4 ness lending has increased by 10 per5 cent or greater, the dividend or inter6 est rate shall be 1 percent. 

7 (B) BASIS OF INITIAL RATE.—The initial 

8 dividend or interest rate shall be based on call 

9 report data published in the quarter imme10 diately preceding the date of the capital invest11 ment under the Program. 

12 (C) TIMING OF RATE ADJUSTMENTS.—Any 

13 rate adjustment shall occur in the calendar 

14 quarter following the publication of call report 

15 data, such that the rate based on call report 

16 data from any one calendar quarter, which is 

17 published in the first following calendar quar18 ter, shall be adjusted in that first following cal19 endar quarter and payable in the second fol20 lowing quarter. 

21 (D) RATE FOLLOWING INITIAL 2-YEAR PE22 RIOD.—Generally, the rate based on call report 

23 data from the eighth calendar quarter after the 

24 date of the capital investment under the Pro25 gram shall be payable until the expiration of 


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the 41 1 ⁄2-year period that begins on the date of 

2 the investment. In the case where the amount 

3 of small business lending has remained the 

4 same or decreased relative to the institution’s 

5 baseline in the eighth quarter after the date of 

6 the capital investment under the Program, the 

7 rate shall be 7 percent until the expiration of 

the 41 8 ⁄2-year period that begins on the date of 

9 the investment. 

(E) RATE FOLLOWING INITIAL 41 10 ⁄2-YEAR

11 PERIOD.—The dividend or interest rate paid on 

12 any preferred stock or other financial instru13 ment issued by an eligible institution that re14 ceives a capital investment under the Program 

15 shall increase to 9 percent at the end of the 

41 16 ⁄2-year period that begins on the date of the 

17 capital investment under the Program. 

18 (F) LIMITATION ON RATE REDUCTIONS

19 WITH RESPECT TO CERTAIN AMOUNT.—The re20 duction in the dividend or interest rate payable 

21 to Treasury by any eligible institution shall be 

22 limited such that the rate reduction shall not 

23 apply to a dollar amount of the investment 

24 made by Treasury that is greater than the dol25 lar amount increase in the amount of small 


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1 business lending realized under this program. 

2 The Secretary may issue guidelines that will 

3 apply to new capital investments limiting the 

4 amount of capital available to eligible institu5 tions consistent with this limitation. 

6 (G) RATE ADJUSTMENTS FOR S CORPORA7 TION.—Before making a capital investment in 

8 an eligible institution that is an S corporation 

9 or a corporation organized on a mutual basis, 

10 the Secretary may adjust the dividend or inter11 est rate on the financial instrument to be issued 

12 to the Secretary, from the dividend or interest 

13 rate that would apply under subparagraphs (A) 

14 through (F), to take into account any differen15 tial tax treatment of securities issued by such 

16 eligible institution. For purpose of this subpara17 graph, the term ‘‘S corporation’’ has the same 

18 meaning as in section 1361(a) of the Internal 

19 Revenue Code of 1986. 

20 (H) REPAYMENT DEADLINE.—The capital 

21 investment received by an eligible institution 

22 under the Program shall be evidenced by pre23 ferred stock or other financial instrument 

24 that— 


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1 (i) includes, as a term and condition, 

2 that the capital investment will— 

3 (I) be repaid not later than the 

4 end of the 10-year period beginning 

5 on the date of the capital investment 

6 under the Program; or 

7 (II) at the end of such 10-year 

8 period, be subject to such additional 

9 terms as the Secretary shall prescribe, 

10 which shall include a requirement that 

11 the stock or instrument shall carry 

12 the highest dividend or interest rate 

13 payable; and 

14 (ii) provides that the term and condi15 tion described under clause (i) shall not 

16 apply if the application of that term and 

17 condition would adversely affect the capital 

18 treatment of the stock or financial instru19 ment under current or successor applicable 

20 capital provisions compared to a capital in21 strument with identical terms other than 

22 the term and condition described under 

23 clause (i). 

24 (I) REQUIREMENTS ON FINANCIAL IN25 STRUMENTS ISSUED BY A COMMUNITY DEVELVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 OPMENT FINANCIAL INSTITUTION LOAN

2 FUND.—Any equity equivalent capital issued to 

3 the Treasury by a Community Development Fi4 nancial Institution loan fund receiving a capital 

5 investment under the Program shall provide 

6 that the rate at which interest is payable shall 

7 be 2 percent per annum for 8 years. After 8 

8 years, the rate at which interest is payable shall 

9 be 9 percent. 

10 (J) INCENTIVES CONTINGENT ON AN IN11 CREASE IN THE NUMBER OF LOANS MADE.— 

For any quarter during the first 41 12 ⁄2-year pe13 riod following the date on which an eligible in14 stitution receives a capital investment under the 

15 Program, other than the first such quarter, in 

16 which the institution’s change in the amount of 

17 small business lending relative to the baseline is 

18 positive, if the number of loans made by the in19 stitution does not increase by 2.5 percent for 

20 each 2.5 percent increase of small business 

21 lending, then the rate at which dividends and 

22 interest shall be payable during the following 

23 quarter on preferred stock or other financial in24 struments issued to the Treasury by the eligible 

25 institution shall be— 


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1 (i) 5 percent, if such quarter is within 

2 the 2-year period following the date on 

3 which the eligible institution receives the 

4 capital investment under the Program; or 

5 (ii) 7 percent, if such quarter is after 

6 such 2-year period. 

7 (K) ALTERNATIVE COMPUTATION.—An eli8 gible institution may choose to compute their 

9 small business lending amount by computing 

10 the amount of small business lending, as if the 

11 definition of such term did not require that the 

12 loans comprising such lending be made to small 

13 business. Any eligible institution choosing to 

14 compute their small business lending in this 

15 manner shall certify that all lending included by 

16 the institution for purposes of computing the 

17 increase in lending under this paragraph was 

18 made to small businesses. 

19 (5) ADDITIONAL INCENTIVES TO REPAY.—The 

20 Secretary may, by regulation or guidance issued 

21 under section 104(8), establish repayment incentives 

22 in addition to the incentive in paragraph (4)(E) that 

23 will apply to new capital investments in a manner 

24 that the Secretary determines to be consistent with 

25 the purposes of this title. 


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1 (6) CAPITAL PURCHASE PROGRAM REFI2 NANCE.— 

3 (A) IN GENERAL.—The Secretary shall, in 

4 a manner that the Secretary determines to be 

5 consistent with the purposes of this title, issue 

6 regulations and other guidance to permit eligi7 ble institutions to refinance securities issued to 

8 Treasury under the CDCI and the CPP for se9 curities to be issued under the Program. 

10 (B) PROHIBITION ON PARTICIPATION BY

11 NON-PAYING CPP PARTICIPANTS.—Subpara12 graph (A) shall not apply to any eligible institu13 tion that has missed more than one dividend 

14 payment due under the CPP. For purposes of 

15 this subparagraph, a CPP dividend payment 

16 that is submitted within 60 days of the due 

17 date of such payment shall not be considered a 

18 missed dividend payment. 

19 (7) OUTREACH TO MINORITIES, WOMEN, AND

20 VETERANS.—The Secretary shall require eligible in21 stitutions receiving capital investments under the 

22 Program to provide linguistically and culturally ap23 propriate outreach and advertising in the applicant 

24 pool describing the availability and application proc25 ess of receiving loans from the eligible institution 


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1 that are made possible by the Program through the 

2 use of print, radio, television or electronic media out3 lets which target organizations, trade associations, 

4 and individuals that— 

5 (A) represent or work within or are mem6 bers of minority communities; 

7 (B) represent or work with or are women; 

8 and 

9 (C) represent or work with or are veterans. 

10 (8) ADDITIONAL TERMS.—The Secretary may, 

11 by regulation or guidance issued under section 5(9), 

12 make modifications that will apply to new capital in13 vestments in order to manage risks associated with 

14 the administration of the Fund in a manner con15 sistent with the purposes of this title. 

16 (9) MINIMUM UNDERWRITING STANDARDS.— 

17 The appropriate Federal banking agency for an eli18 gible institution that receives funds under the Pro19 gram shall within 60 days issue guidance regarding 

20 prudent underwriting standards that must be used 

21 for loans made by the eligible institution using such 

22 funds. In the case of a community development fi23 nancial institution loan fund, the Community Devel24 opment Financial Institutions Fund shall within 60 

25 days issue regulations defining minimum underVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 writing standards that must be used for loans made 

2 by the eligible institution using such funds. 

3 (10) REPORTING.—Each eligible institution re4 ceiving a capital investment under the Program shall 

5 issue a quarterly report to the Secretary detailing 

6 the percentage of new loans to small businesses the 

7 institution makes that are— 

8 (A) guaranteed by the Small Business Ad9 ministration; 

10 (B) made to Small Business Investment 

11 Companies; 

12 (C) other loans made to small business 

13 concerns (as defined under the Small Business 

14 Act), if the internal reporting of the concern 

15 distinguishes the size of businesses to which 

16 loans are made; and 

17 (D) other loans made to entities that the 

18 internal reporting of the concern classifies as a 

19 small business. 

20 (e) NOTIFICATION TO CUSTOMERS.—Any eligible in21 stitution receiving funds under the Program shall— 

22 (1) disclose on every applicable loan transaction 

23 that the loan is being made possible by the Program; 

24 and 


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1 (2) if such institution has an established inter2 net website, such institution shall make available on 

3 its internet website— 

4 (A) the written reports made by the Sec5 retary pursuant to paragraphs (1) and (2) of 

6 section 7; and 

7 (B) a statement that the institution, as a 

8 participant in the Program, is seeking to make 

9 small business loans to qualified borrowers and 

10 may not discriminate on the basis of any factor 

11 prohibited under the Equal Credit Opportunity 

12 Act, including the race, color, religion, national 

13 origin, sex, marital status, or age. 

14 SEC. 104. ADDITIONAL AUTHORITIES OF THE SECRETARY. 

15 The Secretary may take such actions as the Secretary 

16 deems necessary to carry out the authorities in this title, 

17 including, without limitation, the following: 

18 (1) The Secretary may use the services of any 

19 agency or instrumentality of the United States or 

20 component thereof on a reimbursable basis, and any 

21 such agency or instrumentality or component thereof 

22 is authorized to provide services as requested by the 

23 Secretary using all authorities vested in or delegated 

24 to that agency, instrumentality, or component. 


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1 (2) The Secretary may designate any bank, sav2 ings association, trust company, security broker or 

3 dealer, asset manager, or investment adviser as a fi4 nancial agent of the Federal Government and such 

5 institution shall perform all such reasonable duties 

6 related to this title as financial agent of the Federal 

7 Government as may be required. The Secretary shall 

8 have authority to amend existing agreements with fi9 nancial agents, entered into during the 2-year period 

10 before the date of enactment of this title, to perform 

11 reasonable duties related to this title. 

12 (3) The Secretary may exercise any rights re13 ceived in connection with any preferred stock or 

14 other financial instruments or assets purchased or 

15 acquired pursuant to the authorities granted under 

16 this title. 

17 (4) Subject to section 4(b)(3), the Secretary 

18 may manage any assets purchased under this title, 

19 including revenues and portfolio risks therefrom. 

20 (5) The Secretary may sell, dispose of, transfer, 

21 exchange or enter into securities loans, repurchase 

22 transactions, or other financial transactions in re23 gard to, any preferred stock or other financial in24 strument or asset purchased or acquired under this 


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1 title, upon terms and conditions and at a price de2 termined by the Secretary. 

3 (6) The Secretary may manage or prohibit con4 flicts of interest that may arise in connection with 

5 the administration and execution of the authorities 

6 provided under this title. 

7 (7) The Secretary may establish and use vehi8 cles, subject to supervision by the Secretary, to pur9 chase, hold, and sell preferred stock or other finan10 cial instruments and issue obligations. 

11 (8) The Secretary may, in consultation with the 

12 Administrator of the Small Business Administration, 

13 issue such regulations and other guidance as may be 

14 necessary or appropriate to define terms or carry 

15 out the authorities or purposes of this title. 

16 SEC. 105. CONSIDERATIONS. 

17 In exercising the authorities granted in this title, the 

18 Secretary shall take into consideration— 

19 (1) increasing the availability of credit for small 

20 businesses; 

21 (2) providing funding to minority-owned eligible 

22 institutions and other eligible institutions that serve 

23 small businesses that are minority-, veteran-, and 

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1 erate-income, minority, and other underserved or 

2 rural communities; 

3 (3) protecting and increasing American jobs; 

4 (4) increasing the opportunity for small busi5 ness development in areas with high unemployment 

6 rates that exceed the national average; 

7 (5) ensuring that all eligible institutions may 

8 apply to participate in the program established 

9 under this title, without discrimination based on ge10 ography; 

11 (6) providing transparency with respect to use 

12 of funds provided under this title; 

13 (7) minimizing the cost to taxpayers of exer14 cising the authorities; 

15 (8) promoting and engaging in financial edu16 cation to would-be borrowers; and 

17 (9) providing funding to eligible institutions 

18 that serve small businesses directly affected by the 

19 discharge of oil arising from the explosion on and 

20 sinking of the mobile offshore drilling unit Deep21 water Horizon and small businesses in communities 

22 that have suffered negative economic effects as a re23 sult of that discharge with particular consideration 

24 to States along the coast of the Gulf of Mexico. 


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1 SEC. 106. REPORTS. 

2 The Secretary shall provide to the appropriate com3 mittees of Congress— 

4 (1) within 7 days of the end of each month 

5 commencing with the first month in which trans6 actions are made under the Program, a written re7 port describing all of the transactions made during 

8 the reporting period pursuant to the authorities 

9 granted under this title; 

10 (2) after the end of March and the end of Sep11 tember, commencing September 30, 2010, a written 

12 report on all projected costs and liabilities, all oper13 ating expenses, including compensation for financial 

14 agents, and all transactions made by the Fund, 

15 which shall include participating institutions and 

16 amounts each institution has received under the Pro17 gram; and 

18 (3) within 7 days of the end of each month 

19 commencing with the first month in which trans20 actions are made under the Program, a written re21 port detailing how eligible institutions participating 

22 in the Program have used the funds such institu23 tions received under the Program. 

24 SEC. 107. OVERSIGHT AND AUDITS. 

25 (a) INSPECTOR GENERAL OVERSIGHT.—The Inspec26 tor General of the Department of the Treasury shall conVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00038 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 duct, supervise, and coordinate audits and investigations 

2 of the Program through the Office of Small Business 

3 Lending Fund Program Oversight established under sub4 section (b). 

5 (b) OFFICE OF SMALL BUSINESS LENDING FUND

6 PROGRAM OVERSIGHT.— 

7 (1) ESTABLISHMENT.—There is hereby estab8 lished within the Office of the Inspector General of 

9 the Department of the Treasury a new office to be 

10 named the ‘‘Office of Small Business Lending Fund 

11 Program Oversight’’ to provide oversight of the Pro12 gram. 

13 (2) LEADERSHIP.—The Inspector General shall 

14 appoint a Special Deputy Inspector General for 

15 SBLF Program Oversight to lead the Office, with 

16 commensurate staff, who shall report directly to the 

17 Inspector General and who shall be responsible for 

18 the performance of all auditing and investigative ac19 tivities relating to the Program. 

20 (3) REPORTING.— 

21 (A) IN GENERAL.—The Inspector General 

22 shall issue a report no less than two times a 

23 year to the Congress and the Secretary devoted 

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1 ing any recommendations for improvements to 

2 the Program. 

3 (B) RECOMMENDATIONS.—With respect to 

4 any deficiencies identified in a report under 

5 subparagraph (A), the Secretary shall either— 

6 (i) take actions to address such defi7 ciencies; or 

8 (ii) certify to the appropriate commit9 tees of Congress that no action is nec10 essary or appropriate. 

11 (4) COORDINATION.—The Inspector General, in 

12 maximizing the effectiveness of the Office, shall 

13 work with other Offices of Inspector General, as ap14 propriate, to minimize duplication of effort and en15 sure comprehensive oversight of the Program. 

16 (5) TERMINATION.—The Office shall terminate 

17 at the end of the 6-month period beginning on the 

18 date on which all capital investments are repaid 

19 under the Program or the date on which the Sec20 retary determines that any remaining capital invest21 ments will not be repaid. 

22 (6) DEFINITIONS.—For purposes of this sub23 section: 

24 (A) OFFICE.—The term ‘‘Office’’ means 

25 the Office of Small Business Lending Fund 


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1 Program Oversight established under paragraph 

2 (1). 

3 (B) INSPECTOR GENERAL.—The term ‘‘In4 spector General’’ means the Inspector General 

5 of the Department of the Treasury. 

6 (c) GAO AUDIT.—The Comptroller General of the 

7 United States shall perform an annual audit of the Pro8 gram and issue a report to the appropriate committees 

9 of Congress containing the results of such audit. 

10 (d) REQUIRED CERTIFICATIONS.— 

11 (1) ELIGIBLE INSTITUTION CERTIFICATION.— 

12 Each eligible institution that participate in the Pro13 gram must certify that such institution is in compli14 ance with the requirements of section 103.121 of 

15 title 31, Code of Federal Regulations, a regulation 

16 that, at a minimum, requires financial institutions, 

17 as that term is defined in 31 U.S.C. 5312(a)(2) and 

18 (c)(1)(A), to implement reasonable procedures to 

19 verify the identity of any person seeking to open an 

20 account, to the extent reasonable and practicable, 

21 maintain records of the information used to verify 

22 the person’s identity, and determine whether the 

23 person appears on any lists of known or suspected 

24 terrorists or terrorist organizations provided to the 

25 financial institution by any government agency. 


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1 (2) LOAN RECIPIENTS.—With respect to funds 

2 received by an eligible institution under the Pro3 gram, any business receiving a loan from the eligible 

4 institution using such funds after the date of the en5 actment of this title shall certify to such eligible in6 stitution that the principals of such business have 

7 not been convicted of a sex offense against a minor 

8 (as such terms are defined in section 111 of the Sex 

9 Offender Registration and Notification Act (42 

10 U.S.C. 16911)). 

11 (e) PROHIBITION ON PORNOGRAPHY.—None of the 

12 funds made available under this title may be used to pay 

13 the salary of any individual engaged in activities related 

14 to the Program who has been officially disciplined for vio15 lations of subpart G of the Standards of Ethical Conduct 

16 for Employees of the Executive Branch for viewing, 

17 downloading, or exchanging pornography, including child 

18 pornography, on a Federal Government computer or while 

19 performing official Federal Government duties. 

20 SEC. 108. CREDIT REFORM; FUNDING. 

21 (a) CREDIT REFORM.—The cost of purchases of pre22 ferred stock and other financial instruments made as cap23 ital investments under this title shall be determined as 

24 provided under the Federal Credit Reform Act of 1990 

25 (2 U.S.C. 661 et seq.). 


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1 (b) FUNDS MADE AVAILABLE.—There are hereby ap2 propriated, out of funds in the Treasury not otherwise ap3 propriated, such sums as may be necessary to pay the 

4 costs of $30,000,000,000 of capital investments in eligible 

5 institutions, including the costs of modifying such invest6 ments, and reasonable costs of administering the program 

7 of making, holding, managing, and selling the capital in8 vestments. 

9 SEC. 109. TERMINATION AND CONTINUATION OF AUTHORI10 TIES. 

11 (a) TERMINATION OF INVESTMENT AUTHORITY.— 

12 The authority to make capital investments in eligible insti13 tutions, including commitments to purchase preferred 

14 stock or other instruments, provided under this title shall 

15 terminate 1 year after the date of enactment of this title. 

16 (b) CONTINUATION OF OTHER AUTHORITIES.—The 

17 authorities of the Secretary in section 104 shall not be 

18 limited by the termination date in subsection (a). 

19 SEC. 110. PRESERVATION OF AUTHORITY. 

20 Nothing in this title may be construed to limit the 

21 authority of the Secretary under any other provision of 

22 law. 

23 SEC. 111. ASSURANCES. 

24 (a) SMALL BUSINESS LENDING FUND SEPARATE

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1 gram is established as separate and distinct from the 

2 Troubled Asset Relief Program established by the Emer3 gency Economic Stabilization Act of 2008. An institution 

4 shall not, by virtue of a capital investment under the Small 

5 Business Lending Fund Program, be considered a recipi6 ent of the Troubled Asset Relief Program. 

7 (b) CHANGE IN LAW.—If, after a capital investment 

8 has been made in an eligible institution under the Pro9 gram, there is a change in law that modifies the terms 

10 of the investment or program in a materially adverse re11 spect for the eligible institution, the eligible institution 

12 may, after consultation with the appropriate Federal 

13 banking agency for the eligible institution, repay the in14 vestment without impediment. 

15 SEC. 112. STUDY AND REPORT WITH RESPECT TO WOMEN16 OWNED, VETERAN-OWNED, AND MINORITY17 OWNED BUSINESSES. 

18 (a) STUDY.—The Secretary shall conduct a study to 

19 determine the number of women-owned businesses, vet20 eran-owned businesses, and minority-owned businesses 

21 that receive assistance as a result of the Program (includ22 ing determining the percentage of the total number of all 

23 businesses that receive assistance that such number rep24 resents), including— 


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1 (1) efforts, including technical assistance and 

2 outreach that institutions have employed under the 

3 Program to provide loans to minority-, veteran-, and 

4 women-owned small businesses; 

5 (2) loan applications received; 

6 (3) loan applications approved; and 

7 (4) and any other relevant data related to such 

8 transactions to promote the purposes of the Pro9 gram as the Secretary may require. 

10 (b) REPORT.—Not later than one year after the date 

11 of enactment of this Act, the Secretary shall submit to 

12 Congress a report on the results of the study conducted 

13 pursuant to subsection (a). To the extent possible, the 

14 Secretary shall disaggregate the results of such study by 

15 ethnic group and gender. 

16 (c) INFORMATION PROVIDED TO THE SECRETARY.— 

17 Eligible institutions that participate in the Program shall 

18 provide the Secretary with such information as the Sec19 retary may require to carry out the study required by this 

20 section. 

21 SEC. 113. TEMPORARY AMORTIZATION AUTHORITY. 

22 (a) PURPOSE.—The purpose this section is to address 

23 the ongoing effects of the financial crisis on small busi24 nesses by providing temporary authority to amortize losses 


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1 or write-downs in order to increase the availability of cred2 it for small businesses. 

3 (b) IN GENERAL.—For purposes of capital calcula4 tion under the Financial Institutions Examination Coun5 cil’s Consolidated Reports of Condition, an eligible institu6 tion may choose to amortize any loss or write-down, on 

7 a quarterly straight line basis over a period determined 

8 under subsection (c), beginning with the month in which 

9 such loss or write-down occurs, resulting from the applica10 tion of FASB Statement 114 or 144 to— 

11 (1) other real estate owned (as defined under 

12 section 34.81 of title 12, Code of Federal Regula13 tion), or 

14 (2) an impared loan secured by real estate, 

15 provided that the institution discloses the difference in the 

16 amount of the institution’s capital, when calculated taking 

17 into account the temporary amortization, from the amount 

18 of the institution’s capital when calculated without taking 

19 into account the temporary amortization on the Financial 

20 Institutions Examination Council’s Consolidated Reports 

21 of Condition. 

22 (c) AMORTIZATION REQUIREMENTS.—During the ini23 tial 2-year period referred to in section 4(d)(4), an eligible 

24 institution’s amortization period shall be adjusted to re25 flect the following schedule based on the institution’s 


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1 change in the amount of small business lending relative 

2 to the baseline: 

3 (1) If the amount of small business lending has 

4 increased by less than 2.5 percent, the amortization 

5 period shall be 6 years. 

6 (2) If the amount of small business lending has 

7 increased by 2.5 percent or greater, but by less than 

8 5.0 percent, the amortization period shall be 7 years. 

9 (3) If the amount of small business lending has 

10 increased by 5.0 percent or greater, but by less than 

11 7.5 percent, the amortization period shall be 8 years. 

12 (4) If the amount of small business lending has 

13 increased by 7.5 percent or greater, but by less than 

14 10.0 percent, the amortization period shall be 9 

15 years. 

16 (5) If the amount of small business lending has 

17 increased by 10 percent or greater, the amortization 

18 period shall be 10 years. 

19 (d) MINIMUM UNDERWRITING STANDARDS.—The 

20 appropriate Federal banking agency for an eligible institu21 tion that chooses to amortize any loss or write-down as 

22 permitted under subsection (b) shall, within 60 days of 

23 the date of the enactment of this title, issue regulations 

24 defining minimum underwriting standards that must be 

25 used for loans made by the eligible institution. 


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1 (e) EFFECTIVE DATE.—The provisions of this section 

2 shall apply to loan origination that occurred on or after 

3 January 1, 2003, and before January 1, 2008. 

4 SEC. 114. SENSE OF CONGRESS. 

5 It is the sense of Congress that the Federal Deposit 

6 Insurance Corporation and other bank regulators are 

7 sending mixed messages to banks regarding regulatory 

8 capital requirements and lending standards, which is a 

9 contributing cause of decreased small business lending and 

10 increased regulatory uncertainty at community banks. 

11 TITLE II—STATE SMALL 

12 BUSINESS CREDIT INITIATIVE 

13 SEC. 201. SHORT TITLE. 

14 This title may be cited as the ‘‘State Small Business 

15 Credit Initiative Act of 2010’’. 

16 SEC. 202. DEFINITIONS. 

17 For purposes of this title, the following definitions 

18 shall apply: 

19 (1) APPROPRIATE FEDERAL BANKING AGEN20 CY.—The term ‘‘appropriate Federal banking agen21 cy’’— 

22 (A) has the same meaning as in section 3 

23 of the Federal Deposit Insurance Act; and 

24 (B) includes the National Credit Union 

25 Administration Board in the case of any credit 


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1 union the deposits of which are insured in ac2 cordance with the Federal Credit Union Act. 

3 (2) ENROLLED LOAN.—The term ‘‘enrolled 

4 loan’’ means a loan made by a financial institution 

5 lender that is enrolled by a participating State in an 

6 approved State capital access program in accordance 

7 with this title. 

8 (3) FEDERAL CONTRIBUTION.—The term ‘‘Fed9 eral contribution’’ means the portion of the contribu10 tion made by a participating State to, or for the ac11 count of, an approved State program that is made 

12 with Federal funds allocated to the State by the Sec13 retary under section 203. 

14 (4) FINANCIAL INSTITUTION.—The term ‘‘fi15 nancial institution’’ means any insured depository 

16 institution, insured credit union, or community de17 velopment financial institution, as those terms are 

18 each defined in section 103 of the Riegle Community 

19 Development and Regulatory Improvement Act of 

20 1994. 

21 (5) PARTICIPATING STATE.—The term ‘‘partici22 pating State’’ means any State that has been ap23 proved for participation in the Program under sec24 tion 204. 


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

2 the State Small Business Credit Initiative estab3 lished under this title. 

4 (7) QUALIFYING LOAN OR SWAP FUNDING FA5 CILITY.—The term ‘‘qualifying loan or swap funding 

6 facility’’ means a contractual arrangement between a 

7 participating State and a private financial entity 

8 under which— 

9 (A) the participating State delivers funds 

10 to the entity as collateral; 

11 (B) the entity provides funding from the 

12 arrangement back to the participating State; 

13 and 

14 (C) the full amount of resulting funding 

15 from the arrangement, less any fees and other 

16 costs of the arrangement, is contributed to, or 

17 for the account of, an approved State program. 

18 (8) RESERVE FUND.—The term ‘‘reserve fund’’ 

19 means a fund, established by a participating State, 

20 dedicated to a particular financial institution lender, 

21 for the purposes of— 

22 (A) depositing all required premium 

23 charges paid by the financial institution lender 

24 and by each borrower receiving a loan under an 


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1 approved State program from that financial in2 stitution lender; 

3 (B) depositing contributions made by the 

4 participating State, including State contribu5 tions made with Federal contributions; and 

6 (C) covering losses on enrolled loans by 

7 disbursing accumulated funds. 

8 (9) STATE.—The term ‘‘State’’ means— 

9 (A) a State of the United States; 

10 (B) the District of Columbia, the Common11 wealth of Puerto Rico, the Commonwealth of 

12 Northern Mariana Islands, Guam, American 

13 Samoa, and the United States Virgin Islands; 

14 (C) when designated by a State of the 

15 United States, a political subdivision of that 

16 State that the Secretary determines has the ca17 pacity to participate in the Program; and 

18 (D) under the circumstances described in 

19 section 204(d), a municipality of a State of the 

20 United States to which the Secretary has given 

21 a special permission under section 204(d). 

22 (10) STATE CAPITAL ACCESS PROGRAM.—The 

23 term ‘‘State capital access program’’ means a pro24 gram of a State that— 


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1 (A) uses public resources to promote pri2 vate access to credit; and 

3 (B) meets the eligibility criteria in section 

4 205(c). 

5 (11) STATE OTHER CREDIT SUPPORT PRO6 GRAM.—The term ‘‘State other credit support pro7 gram’’— 

8 (A) means a program of a State that— 

9 (i) uses public resources to promote 

10 private access to credit; 

11 (ii) is not a State capital access pro12 gram; and 

13 (iii) meets the eligibility criteria in 

14 section 206(c); and 

15 (B) includes, collateral support programs, 

16 loan participation programs, State-run venture 

17 capital fund programs, and credit guarantee 

18 programs. 

19 (12) STATE PROGRAM.—The term ‘‘State pro20 gram’’ means a State capital access program or a 

21 State other credit support program. 

22 (13) SECRETARY.—The term ‘‘Secretary’’ 

23 means the Secretary of the Treasury. 


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1 SEC. 203. FEDERAL FUNDS ALLOCATED TO STATES. 

2 (a) PROGRAM ESTABLISHED; PURPOSE.—There is 

3 established the State Small Business Credit Initiative 

4 (hereinafter in this title referred to as the ‘‘Program’’), 

5 to be administered by the Secretary. Under the Program, 

6 the Secretary shall allocate Federal funds to participating 

7 States and make the allocated funds available to the par8 ticipating States as provided in this section for the uses 

9 described in this section. 

10 (b) ALLOCATION FORMULA.— 

11 (1) IN GENERAL.—Not later than 30 days after 

12 the date of enactment of this title, the Secretary 

13 shall allocate Federal funds to participating States 

14 so that each State is eligible to receive an amount 

15 equal to the average of the respective amounts that 

16 the State— 

17 (A) would receive under the 2009 alloca18 tion, as determined under paragraph (2); and 

19 (B) would receive under the 2010 alloca20 tion, as determined under paragraph (3). 

21 (2) 2009 ALLOCATION FORMULA.— 

22 (A) IN GENERAL.—The Secretary shall de23 termine the 2009 allocation by allocating Fed24 eral funds among the States in the proportion 

25 that each such State’s 2008 State employment 


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1 decline bears to the aggregate of the 2008 

2 State employment declines for all States. 

3 (B) MINIMUM ALLOCATION.—The Sec4 retary shall adjust the allocations under sub5 paragraph (A) for each State to the extent nec6 essary to ensure that no State receives less than 

7 0.9 percent of the Federal funds. 

8 (C) 2008 STATE EMPLOYMENT DECLINE

9 DEFINED.—For purposes of this paragraph and 

10 with respect to a State, the term ‘‘2008 State 

11 employment decline’’ means the excess (if any) 

12 of— 

13 (i) the number of individuals em14 ployed in such State determined for De15 cember 2007; over 

16 (ii) the number of individuals em17 ployed in such State determined for De18 cember 2008. 

19 (3) 2010 ALLOCATION FORMULA.— 

20 (A) IN GENERAL.—The Secretary shall de21 termine the 2010 allocation by allocating Fed22 eral funds among the States in the proportion 

23 that each such State’s 2009 unemployment 

24 number bears to the aggregate of the 2009 un25 employment numbers for all of the States. 


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1 (B) MINIMUM ALLOCATION.—The Sec2 retary shall adjust the allocations under sub3 paragraph (A) for each State to the extent nec4 essary to ensure that no State receives less than 

5 0.9 percent of the Federal funds. 

6 (C) 2009 UNEMPLOYMENT NUMBER DE7 FINED.—For purposes of this paragraph and 

8 with respect to a State, the term ‘‘2009 unem9 ployment number’’ means the number of indi10 viduals within such State who were determined 

11 to be unemployed by the Bureau of Labor Sta12 tistics for December 2009. 

13 (c) AVAILABILITY OF ALLOCATED AMOUNT.—The 

14 amount allocated by the Secretary to each participating 

15 State under subsection (b) shall be made available to the 

16 State as follows: 

17 (1) ALLOCATED AMOUNT GENERALLY TO BE

18 AVAILABLE TO STATE IN ONE-THIRDS.— 

19 (A) IN GENERAL.—The Secretary shall— 

20 (i) apportion the participating State’s 

21 allocated amount into one-thirds; 

22 (ii) transfer to the participating State 

23 the first one-third when the Secretary ap24 proves the State for participation under 

25 section 204; and 


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1 (iii) transfer to the participating State 

2 each successive one-third when the State 

3 has certified to the Secretary that it has 

4 expended, transferred, or obligated 80 per5 cent of the last transferred one-third for 

6 Federal contributions to, or for the ac7 count of, State programs. 

8 (B) AUTHORITY TO WITHHOLD PENDING

9 AUDIT.—The Secretary may withhold the trans10 fer of any successive one-third pending results 

11 of a financial audit. 

12 (C) TRANSFERS CONTINGENT ON INSPEC13 TOR GENERAL AUDITS.— 

14 (i) IN GENERAL.—Before a transfer 

15 to a participating State of the second one16 third or the last one-third, the Inspector 

17 General of the Department of the Treasury 

18 shall carry out an audit of the partici19 pating State’s use of amounts already re20 ceived. 

21 (ii) PENALTY FOR MISSTATEMENT.— 

22 Any participating State that is found to 

23 have intentionally misstated any report 

24 issued to the Secretary under the Program 

25 shall be ineligible to receive any additional 


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1 funds under the Program. Funds that had 

2 been allocated or that would otherwise 

3 have been allocated to such participating 

4 State shall be paid into the general fund of 

5 the Treasury for reduction of the public 

6 debt. 

7 (iii) MUNICIPALITIES.—For purposes 

8 of this subparagraph, the term ‘‘partici9 pating State’’ shall include a municipality 

10 given special permission to participate in 

11 the Program, pursuant to section 204(d). 

12 (D) EXCEPTION.— 

13 (i) IN GENERAL.—The Secretary may, 

14 in the Secretary’s discretion, transfer the 

15 full amount of the participating State’s al16 located amount to the State in a single 

17 transfer if the participating State applies 

18 to the Secretary for approval to use the 

19 full amount of the allocation as collateral 

20 for a qualifying loan or swap funding facil21 ity. 

22 (ii) RECOUPMENT TRIGGERED BY IN23 TENTIONAL MISSTATEMENT.—If, in any 

24 audit of a report issued by a participating 

25 State that receives a single transfer pursuVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00057 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 ant to clause (i), the Secretary or the In2 spector General of the Department of the 

3 Treasury determines that such State inten4 tionally misstated information in such re5 port, the participating State shall be re6 quired to fully repay all amounts received 

7 by the State under the Program, and such 

8 amounts shall be paid into the general 

9 fund of the Treasury for reduction of the 

10 public debt. 

11 (2) TRANSFERRED AMOUNTS.—Each amount 

12 transferred to a participating State under this sec13 tion shall remain available to the State until used by 

14 the State as permitted under paragraph (3). 

15 (3) USE OF TRANSFERRED FUNDS.—Each par16 ticipating State may use funds transferred to it 

17 under this section only— 

18 (A) for making Federal contributions to, or 

19 for the account of, an approved State program; 

20 (B) as collateral for a qualifying loan or 

21 swap funding facility; 

22 (C) in the case of the first one-third trans23 ferred, for paying administrative costs incurred 

24 by the State in implementing an approved State 


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1 program in an amount not to exceed 5 percent 

2 of that first one-third; or 

3 (D) in the case of each successive one-third 

4 transferred, for paying administrative costs in5 curred by the State in implementing an ap6 proved State program in an amount not to ex7 ceed 3 percent of that successive one-third. 

8 (4) TERMINATION OF AVAILABILITY OF

9 AMOUNTS NOT TRANSFERRED WITHIN 2 YEARS OF

10 PARTICIPATION.—Any portion of a participating 

11 State’s allocated amount that has not been trans12 ferred to the State under this section by the end of 

13 the 2-year period beginning on the date that the 

14 Secretary approves the State for participation may 

15 be deemed by the Secretary to be no longer allocated 

16 to the State and no longer available to the State and 

17 shall be returned to the General Fund of the Treas18 ury. 

19 (5) TRANSFERRED AMOUNTS NOT ASSIST20 ANCE.—The amounts transferred to a participating 

21 State under this section shall not be considered ‘‘as22 sistance’’ for purposes of subtitle V of title 31, 

23 United States Code. 

24 (6) DEFINITIONS.—For purposes of this sec25 tion— 


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1 (A) the term ‘‘allocated amount’’ means 

2 the total amount of Federal funds allocated by 

3 the Secretary under subsection (b) to the par4 ticipating State; and 

5 (B) the term ‘‘one-third’’ means— 

6 (i) in the case of the first and second 

7 one-thirds, an amount equal to 33 percent 

8 of a participating State’s allocated amount; 

9 and 

10 (ii) in the case of the last one-third, 

11 an amount equal to 34 percent of a partici12 pating State’s allocated amount. 

13 SEC. 204. APPROVING STATES FOR PARTICIPATION. 

14 (a) APPLICATION.—Any State may apply to the Sec15 retary for approval to be a participating State under the 

16 Program and to be eligible for an allocation of Federal 

17 funds under the Program. 

18 (b) GENERAL APPROVAL CRITERIA.—The Secretary 

19 shall approve a State to be a participating State, if— 

20 (1) a specific department, agency, or political 

21 subdivision of the State has been designated to im22 plement a State program and participate in the Pro23 gram; 

24 (2) all legal actions necessary to enable such 

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1 sion to implement a State program and participate 

2 in the Program have been accomplished; 

3 (3) the State has filed an application with the 

4 Secretary for approval of a State capital access pro5 gram under section 205 or approval as a State other 

6 credit support program under section 206, in each 

7 case within the time period provided in the respec8 tive section; and 

9 (4) the State and the Secretary have executed 

10 an allocation agreement that— 

11 (A) conforms to the requirements of this 

12 title; 

13 (B) ensures that the State program com14 plies with such national standards as are estab15 lished by the Secretary under section 209(a)(2); 

16 (C) sets forth internal control, compliance, 

17 and reporting requirements as established by 

18 the Secretary, and such other terms and condi19 tions necessary to carry out the purposes of this 

20 title, including an agreement by the State to 

21 allow the Secretary to audit State programs; 

22 (D) requires that the State program be 

23 fully positioned, within 90 days of the State’s 

24 execution of the allocation agreement with the 

25 Secretary, to act on providing the kind of credit 


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1 support that the State program was established 

2 to provide; and 

3 (E) includes an agreement by the State to 

4 deliver to the Secretary, and update annually, a 

5 schedule describing how the State intends to 

6 apportion among its State programs the Fed7 eral funds allocated to the State. 

8 (c) CONTRACTUAL ARRANGEMENTS FOR IMPLEMEN9 TATION OF STATE PROGRAMS.—A State may be approved 

10 to be a participating State, and be eligible for an allocation 

11 of Federal funds under the Program, if the State has con12 tractual arrangements for the implementation and admin13 istration of its State program with— 

14 (1) an existing, approved State program admin15 istered by another State; or 

16 (2) an authorized agent of, or entity supervised 

17 by, the State, including for-profit and not-for-profit 

18 entities. 

19 (d) SPECIAL PERMISSION.— 

20 (1) CIRCUMSTANCES WHEN A MUNICIPALITY

21 MAY APPLY DIRECTLY.—If a State does not, within 

22 60 days after the date of enactment of this title, file 

23 with the Secretary a notice of its intent to apply for 

24 approval by the Secretary of a State program or 

25 within 9 months after the date of enactment of this 


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1 title, file with the Secretary a complete application 

2 for approval of a State program, the Secretary may 

3 grant to municipalities of that State a special per4 mission that will allow them to apply directly to the 

5 Secretary without the State for approval to be par6 ticipating municipalities. 

7 (2) TIMING REQUIREMENTS APPLICABLE TO

8 MUNICIPALITIES APPLYING DIRECTLY.—To qualify 

9 for the special permission, a municipality of a State 

10 must, within 12 months after the date of enactment 

11 of this title, file with the Secretary a complete appli12 cation for approval by the Secretary of a State pro13 gram. 

14 (3) NOTICES OF INTENT AND APPLICATIONS

15 FROM MORE THAN 1 MUNICIPALITY.—A municipality 

16 of a State may combine with 1 or more other mu17 nicipalities of that State to file a joint notice of in18 tent to file and a joint application. 

19 (4) APPROVAL CRITERIA.—The general ap20 proval criteria in paragraphs (2) and (4) shall apply. 

21 (5) ALLOCATION TO MUNICIPALITIES.— 

22 (A) IF MORE THAN 3.—If more than 3 mu23 nicipalities, or combination of municipalities as 

24 provided in paragraph (3), of a State apply for 

25 approval by the Secretary to be participating 


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1 municipalities under this subsection, and the 

2 applications meet the approval criteria in para3 graph (4), the Secretary shall allocate Federal 

4 funds to the 3 municipalities with the largest 

5 populations. 

6 (B) IF 3 OR FEWER.—If 3 or fewer mu7 nicipalities, or combination of municipalities as 

8 provided in paragraph (3), of a State apply for 

9 approval by the Secretary to be participating 

10 municipalities under this subsection, and the 

11 applications meet the approval criteria in para12 graph (4), the Secretary shall allocate Federal 

13 funds to each applicant municipality or com14 bination of municipalities. 

15 (6) APPORTIONMENT OF ALLOCATED AMOUNT

16 AMONG PARTICIPATING MUNICIPALITIES.—If the 

17 Secretary approves municipalities to be participating 

18 municipalities under this subsection, the Secretary 

19 shall apportion the full amount of the Federal funds 

20 that are allocated to that State to municipalities 

21 that are approved under this subsection in amounts 

22 proportionate to the population of those municipali23 ties, based on the most recent available decennial 

24 census. 


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1 (7) APPROVING STATE PROGRAMS FOR MUNICI2 PALITIES.—If the Secretary approves municipalities 

3 to be participating municipalities under this sub4 section, the Secretary shall take into account the ad5 ditional considerations in section 206(d) in making 

6 the determination under section 205 or 206 that the 

7 State program or programs to be implemented by 

8 the participating municipalities, including a State 

9 capital access program, is eligible for Federal con10 tributions to, or for the account of, the State pro11 gram. 

12 SEC. 205. APPROVING STATE CAPITAL ACCESS PROGRAMS. 

13 (a) APPLICATION.—A participating State that estab14 lishes a new, or has an existing, State capital access pro15 gram that meets the eligibility criteria in subsection (c) 

16 may apply to Secretary to have the State capital access 

17 program approved as eligible for Federal contributions to 

18 the reserve fund. 

19 (b) APPROVAL.—The Secretary shall approve such 

20 State capital access program as eligible for Federal con21 tributions to the reserve fund if— 

22 (1) within 60 days after the date of enactment 

23 of this title, the State has filed with the Secretary 

24 a notice of intent to apply for approval by the Sec25 retary of a State capital access program; 


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1 (2) within 9 months after the date of enactment 

2 of this title, the State has filed with the Secretary 

3 a complete application for approval by the Secretary 

4 of a capital access program; 

5 (3) the State satisfies the requirements of sub6 sections (a) and (b) of section 204; and 

7 (4) the State capital access program meets the 

8 eligibility criteria in subsection (c). 

9 (c) ELIGIBILITY CRITERIA FOR STATE CAPITAL AC10 CESS PROGRAMS.—For a State capital access program to 

11 be approved under this section, it must be a program of 

12 the State that— 

13 (1) provides portfolio insurance for business 

14 loans based on a separate loan-loss reserve fund for 

15 each financial institution; 

16 (2) requires insurance premiums to be paid by 

17 the financial institution lenders and by the business 

18 borrowers to the reserve fund to have their loans en19 rolled in the reserve fund; 

20 (3) provides for contributions to be made by the 

21 State to the reserve fund in amounts at least equal 

22 to the sum of the amount of the insurance premium 

23 charges paid by the borrower and the financial insti24 tution to the reserve fund for any newly enrolled 

25 loan; and 


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1 (4) provides its portfolio insurance solely for 

2 loans that meet both the following requirements: 

3 (A) The borrower has 500 employees or 

4 less at the time that the loan is enrolled in the 

5 Program. 

6 (B) The loan amount does not exceed 

7 $5,000,000. 

8 (d) FEDERAL CONTRIBUTIONS TO APPROVED STATE

9 CAPITAL ACCESS PROGRAMS.—A State capital access pro10 gram approved under this section will be eligible for receiv11 ing Federal contributions to the reserve fund in an 

12 amount equal to the sum of the amount of the insurance 

13 premium charges paid by the borrowers and by the finan14 cial institution to the reserve fund for loans that meet the 

15 requirements in subsection (c)(4). A participating State 

16 may use the Federal contribution to make its contribution 

17 to the reserve fund of an approved State capital access 

18 program. 

19 (e) MINIMUM PROGRAM REQUIREMENTS FOR STATE

20 CAPITAL ACCESS PROGRAMS.—The Secretary shall, by 

21 regulation or other guidance, prescribe Program require22 ments that meet the following minimum requirements: 

23 (1) EXPERIENCE AND CAPACITY.—The partici24 pating State shall determine for each financial insti25 tution that participates in the State capital access 


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1 program, after consultation with the appropriate 

2 Federal banking agency or, in the case of a financial 

3 institution that is a non depository community devel4 opment financial institution, the Community Devel5 opment Financial Institution Fund, that the finan6 cial institution has sufficient commercial lending ex7 perience and financial and managerial capacity to 

8 participate in the approved State capital access pro9 gram. The determination by the State shall not be 

10 reviewable by the Secretary. 

11 (2) INVESTMENT AUTHORITY.—Subject to ap12 plicable State law, the participating State may in13 vest, or cause to be invested, funds held in a reserve 

14 fund by establishing a deposit account at the finan15 cial institution lender in the name of the partici16 pating State. In the event that funds in the reserve 

17 fund are not deposited in such an account, such 

18 funds shall be invested in a form that the partici19 pating State determines is safe and liquid. 

20 (3) LOAN TERMS AND CONDITIONS TO BE DE21 TERMINED BY AGREEMENT.—A loan to be filed for 

22 enrollment in an approved State capital access pro23 gram may be made with such interest rate, fees, and 

24 other terms and conditions, and the loan may be en25 rolled in the approved State capital access program 


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1 and claims may be filed and paid, as agreed upon 

2 by the financial institution lender and the borrower, 

3 consistent with applicable law. 

4 (4) LENDER CAPITAL AT-RISK.—A loan to be 

5 filed for enrollment in the State capital access pro6 gram must require the financial institution lender to 

7 have a meaningful amount of its own capital re8 sources at risk in the loan. 

9 (5) PREMIUM CHARGES MINIMUM AND MAX10 IMUM AMOUNTS.—The insurance premium charges 

11 payable to the reserve fund by the borrower and the 

12 financial institution lender shall be prescribed by the 

13 financial institution lender, within minimum and 

14 maximum limits that require that the sum of the in15 surance premium charges paid in connection with a 

16 loan by the borrower and the financial institution 

17 lender may not be less than 2 percent nor more than 

18 7 percent of the amount of the loan enrolled in the 

19 approved State capital access program. 

20 (6) STATE CONTRIBUTIONS.—In enrolling a 

21 loan in an approved State capital access program, 

22 the participating State may make a contribution to 

23 the reserve fund to supplement Federal contribu24 tions made under this Program. 

25 (7) LOAN PURPOSE.— 


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1 (A) PARTICULAR LOAN PURPOSE REQUIRE2 MENTS AND PROHIBITIONS.—In connection 

3 with the filing of a loan for enrollment in an 

4 approved State capital access program, the fi5 nancial institution lender— 

6 (i) shall obtain an assurance from 

7 each borrower that— 

8 (I) the proceeds of the loan will 

9 be used for a business purpose; 

10 (II) the loan will not be used to 

11 finance such business activities as the 

12 Secretary, by regulation, may pro13 scribe as prohibited loan purposes for 

14 enrollment in an approved State cap15 ital access program; and 

16 (III) the borrower is not— 

17 (aa) an executive officer, di18 rector, or principal shareholder of 

19 the financial institution lender; 

20 (bb) a member of the imme21 diate family of an executive offi22 cer, director, or principal share23 holder of the financial institution 

24 lender; or 


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1 (cc) a related interest of any 

2 such executive officer, director, 

3 principal shareholder, or member 

4 of the immediate family; 

5 (ii) shall provide assurances to the 

6 participating State that the loan has not 

7 been made in order to place under the pro8 tection of the approved State capital access 

9 program prior debt that is not covered 

10 under the approved State capital access 

11 program and that is or was owed by the 

12 borrower to the financial institution lender 

13 or to an affiliate of the financial institution 

14 lender; 

15 (iii) shall not allow the enrollment of 

16 a loan to a borrower that is a refinancing 

17 of a loan previously made to that borrower 

18 by the financial institution lender or an af19 filiate of the financial institution lender; 

20 and 

21 (iv) may include additional restric22 tions on the eligibility of loans or bor23 rowers that are not inconsistent with the 

24 provisions and purposes of this title, in25 cluding compliance with all applicable FedVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00071 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 eral and State laws, regulations, ordi2 nances, and Executive orders. 

3 (B) DEFINITIONS.—For purposes of this 

4 subsection, the terms ‘‘executive officer’’, ‘‘di5 rector’’, ‘‘principal shareholder’’, ‘‘immediate 

6 family’’, and ‘‘related interest’’ refer to the 

7 same relationship to a financial institution lend8 er as the relationship described in part 215 of 

9 title 12 of the Code of Federal Regulations, or 

10 any successor to such part. 

11 (8) CAPITAL ACCESS FOR SMALL BUSINESSES

12 IN UNDERSERVED COMMUNITIES.—At the time that 

13 a State applies to the Secretary to have the State 

14 capital access program approved as eligible for Fed15 eral contributions, the State shall deliver to the Sec16 retary a report stating how the State plans to use 

17 the Federal contributions to the reserve fund to pro18 vide access to capital for small businesses in low19 and moderate-income, minority, and other under20 served communities, including women- and minority21 owned small businesses. 


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1 SEC. 206. APPROVING COLLATERAL SUPPORT AND OTHER 

2 INNOVATIVE CREDIT ACCESS AND GUAR3 ANTEE INITIATIVES FOR SMALL BUSINESSES 

4 AND MANUFACTURERS. 

5 (a) APPLICATION.—A participating State that estab6 lishes a new, or has an existing, credit support program 

7 that meets the eligibility criteria in subsection (c) may 

8 apply to the Secretary to have the State other credit sup9 port program approved as eligible for Federal contribu10 tions to, or for the account of, the State program. 

11 (b) APPROVAL.—The Secretary shall approve such 

12 State other credit support program as eligible for Federal 

13 contributions to, or for the account of, the program if— 

14 (1) the Secretary determines that the State sat15 isfies the requirements of paragraphs (1) through 

16 (3) of section 205(b); 

17 (2) the Secretary determines that the State 

18 other credit support program meets the eligibility 

19 criteria in subsection (c); 

20 (3) the Secretary determines the State other 

21 credit support program to be eligible based on the 

22 additional considerations in subsection (d); and 

23 (4) within 9 months after the date of enactment 

24 of this title, the State has filed with Treasury a 

25 complete application for Treasury approval. 


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1 (c) ELIGIBILITY CRITERIA FOR STATE OTHER CRED2 IT SUPPORT PROGRAMS.—For a State other credit sup3 port program to be approved under this section, it must 

4 be a program of the State that— 

5 (1) can demonstrate that, at a minimum, 1 dol6 lar of public investment by the State program will 

7 cause and result in 1 dollar of new private credit; 

8 (2) can demonstrate a reasonable expectation 

9 that, when considered with all other State programs 

10 of the State, such State programs together have the 

11 ability to use amounts of new Federal contributions 

12 to, or for the account of, all such programs in the 

13 State to cause and result in amounts of new small 

14 business lending at least 10 times the new Federal 

15 contribution amount; 

16 (3) for those State other credit support pro17 grams that provide their credit support through 1 or 

18 more financial institution lenders, requires the finan19 cial institution lenders to have a meaningful amount 

20 of their own capital resources at risk in their small 

21 business lending; and 

22 (4) uses Federal funds allocated under this title 

23 to extend credit support that— 

24 (A) targets an average borrower size of 

25 500 employees or less; 


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1 (B) does not extend credit support to bor2 rowers that have more than 750 employees; 

3 (C) targets support towards loans with an 

4 average principal amount of $5,000,000 or less; 

5 and 

6 (D) does not extend credit support to loans 

7 that exceed a principal amount of $20,000,000. 

8 (d) ADDITIONAL CONSIDERATIONS.—In making a de9 termination that a State other credit support program is 

10 eligible for Federal contributions to, or for the account 

11 of, the State program, the Secretary shall take into ac12 count the following additional considerations: 

13 (1) The anticipated benefits to the State, its 

14 businesses, and its residents to be derived from the 

15 Federal contributions to, or for the account of, the 

16 approved State other credit support program, includ17 ing the extent to which resulting small business 

18 lending will expand economic opportunities. 

19 (2) The operational capacity, skills, and experi20 ence of the management team of the State other 

21 credit support program. 

22 (3) The capacity of the State other credit sup23 port program to manage increases in the volume of 

24 its small business lending. 


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1 (4) The internal accounting and administrative 

2 controls systems of the State other credit support 

3 program, and the extent to which they can provide 

4 reasonable assurance that funds of the State pro5 gram are safeguarded against waste, loss, unauthor6 ized use, or misappropriation. 

7 (5) The soundness of the program design and 

8 implementation plan of the State other credit sup9 port program. 

10 (e) FEDERAL CONTRIBUTIONS TO APPROVED STATE

11 OTHER CREDIT SUPPORT PROGRAMS.—A State other 

12 credit support program approved under this section will 

13 be eligible for receiving Federal contributions to, or for 

14 the account of, the State program in an amount consistent 

15 with the schedule describing the apportionment of allo16 cated Federal funds among State programs delivered by 

17 the State to the Secretary under the allocation agreement. 

18 (f) MINIMUM PROGRAM REQUIREMENTS FOR STATE

19 OTHER CREDIT SUPPORT PROGRAMS.— 

20 (1) FUND TO PRESCRIBE.—The Secretary shall, 

21 by regulation or other guidance, prescribe Program 

22 requirements for approved State other credit support 

23 programs. 

24 (2) CONSIDERATIONS FOR FUND.—In pre25 scribing minimum Program requirements for apVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 proved State other credit support programs, the Sec2 retary shall take into consideration, to the extent the 

3 Secretary determines applicable and appropriate, the 

4 minimum Program requirements for approved State 

5 capital access programs in section 205(e). 

6 SEC. 207. REPORTS. 

7 (a) QUARTERLY USE-OF-FUNDS REPORT.— 

8 (1) IN GENERAL.—Not later than 30 days after 

9 the beginning of each calendar quarter, beginning 

10 after the first full calendar quarter to occur after 

11 the date the Secretary approves a State for partici12 pation, the participating State shall submit to the 

13 Secretary a report on the use of Federal funding by 

14 the participating State during the previous calendar 

15 quarter. 

16 (2) REPORT CONTENTS.—The report shall— 

17 (A) indicate the total amount of Federal 

18 funding used by the participating State; 

19 (B) include a certification by the partici20 pating State that— 

21 (i) the information provided in accord22 ance with subparagraph (A) is accurate; 

23 (ii) funds continue to be available and 

24 legally committed to contributions by the 

25 State to, or for the account of, approved 


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1 State programs, less any amount that has 

2 been contributed by the State to, or for the 

3 account of, approved State programs sub4 sequent to the State being approved for 

5 participation in the Program; and 

6 (iii) the participating State is imple7 menting its approved State program or 

8 programs in accordance with this title and 

9 regulations issued pursuant to section 210. 

10 (b) ANNUAL REPORT.—Not later than March 31 of 

11 each year, beginning March 31, 2011, each participating 

12 State shall submit to the Secretary an annual report that 

13 shall include the following information: 

14 (1) The number of borrowers that received new 

15 loans originated under the approved State program 

16 or programs after the State program was approved 

17 as eligible for Federal contributions. 

18 (2) The total amount of such new loans. 

19 (3) Breakdowns by industry type, loan size, an20 nual sales, and number of employees of the bor21 rowers that received such new loans. 

22 (4) The zip code of each borrower that received 

23 such a new loan. 


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1 (5) Such other data as the Secretary, in the 

2 Secretary’s sole discretion, may require to carry out 

3 the purposes of the Program. 

4 (c) FORM.—The reports and data filed pursuant to 

5 subsections (a) and (b) shall be in such form as the Sec6 retary, in the Secretary’s sole discretion, may require. 

7 (d) TERMINATION OF REPORTING REQUIRE8 MENTS.—The requirement to submit reports under sub9 sections (a) and (b) shall terminate for a participating 

10 State with the submission of the completed reports due 

11 on the first March 31 to occur after 5 complete 12-month 

12 periods after the State is approved by the Secretary to 

13 be a participating State. 

14 SEC. 208. REMEDIES FOR STATE PROGRAM TERMINATION 

15 OR FAILURES. 

16 (a) REMEDIES.— 

17 (1) IN GENERAL.—If any of the events listed in 

18 paragraph (2) occur, the Secretary, in the Sec19 retary’s discretion, may— 

20 (A) reduce the amount of Federal funds al21 located to the State under the Program; or 

22 (B) terminate any further transfers of allo23 cated amounts that have not yet been trans24 ferred to the State. 


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1 (2) CAUSAL EVENTS.—The events referred to in 

2 paragraph (1) are— 

3 (A) termination by a participating State of 

4 its participation in the Program; 

5 (B) failure on the part of a participating 

6 State to submit complete reports under section 

7 207 on a timely basis; or 

8 (C) noncompliance by the State with the 

9 terms of the allocation agreement between the 

10 Secretary and the State. 

11 (b) DEALLOCATED AMOUNTS TO BE REALLO12 CATED.—If, after 13 months, any portion of the amount 

13 of Federal funds allocated to a participating State is 

14 deemed by the Secretary to be no longer allocated to the 

15 State after actions taken by the Secretary under sub16 section (a)(1), the Secretary shall reallocate that portion 

17 among the participating States, excluding the State whose 

18 allocated funds were deemed to be no longer allocated, as 

19 provided in section 203(b). 

20 SEC. 209. IMPLEMENTATION AND ADMINISTRATION. 

21 (a) GENERAL AUTHORITIES AND DUTIES.—The Sec22 retary shall— 

23 (1) consult with the Administrator of the Small 

24 Business Administration and the appropriate FedVerDate Mar 15 2010 00:43 Jun 22, 2010 Jkt 089200 PO 00000 Frm 00080 Fmt 6652 Sfmt 6201 E:\BILLS\H5297.PCS H5297

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1 eral banking agencies on the administration of the 

2 Program; 

3 (2) establish minimum national standards for 

4 approved State programs; 

5 (3) provide technical assistance to States for 

6 starting State programs and generally disseminate 

7 best practices; 

8 (4) manage, administer, and perform necessary 

9 program integrity functions for the Program; and 

10 (5) ensure adequate oversight of the approved 

11 State programs, including oversight of the cash 

12 flows, performance, and compliance of each approved 

13 State program. 

14 (b) APPROPRIATIONS.—There is hereby appropriated 

15 to the Secretary, out of funds in the Treasury not other16 wise appropriated, $2,000,000,000 to carry out the Pro17 gram, including to pay reasonable costs of administering 

18 the Program. 

19 (c) TERMINATION OF SECRETARY’S PROGRAM AD20 MINISTRATION FUNCTIONS.—The authorities and duties 

21 of the Secretary to implement and administer the Program 

22 shall terminate at the end of the 7-year period beginning 

23 on the date of enactment of this title. 


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1 SEC. 210. REGULATIONS. 

2 The Secretary, in consultation with the Administrator 

3 of the Small Business Administration, shall issue such 

4 regulations and other guidance as the Secretary deter5 mines necessary or appropriate to implement this title in6 cluding, but not limited to, to define terms, to establish 

7 compliance and reporting requirements, and such other 

8 terms and conditions necessary to carry out the purposes 

9 of this title. 

10 SEC. 211. OVERSIGHT AND AUDITS. 

11 (a) INSPECTOR GENERAL OVERSIGHT.—The Inspec12 tor General of the Department of the Treasury shall con13 duct, supervise, and coordinate audits and investigations 

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

15 (b) GAO AUDIT.—The Comptroller General of the 

16 United States shall perform an annual audit of the Pro17 gram and issue a report to the appropriate committees 

18 of Congress, as such term is defined under section 3(1), 

19 containing the results of such audit. 

20 (c) REQUIRED CERTIFICATION.— 

21 (1) FINANCIAL INSTITUTIONS CERTIFI22 CATION.—With respect to funds received by a par23 ticipating State under the Program, any financial in24 stitution that receives a loan, a loan guarantee, or 

25 other financial assistance using such funds after the 

26 date of the enactment of this title must certify that 


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1 such institution is in compliance with the require2 ments of section 103.121 of title 31, Code of Fed3 eral Regulations, a regulation that, at a minimum, 

4 requires financial institutions, as that term is de5 fined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to im6 plement reasonable procedures to verify the identity 

7 of any person seeking to open an account, to the ex8 tent reasonable and practicable, maintain records of 

9 the information used to verify the person’s identity, 

10 and determine whether the person appears on any 

11 lists of known or suspected terrorists or terrorist or12 ganizations provided to the financial institution by 

13 any government agency. 

14 (2) SEX OFFENSE CERTIFICATION.—With re15 spect to funds received by a participating State 

16 under the Program, any private entity that receives 

17 a loan, a loan guarantee, or other financial assist18 ance using such funds after the date of the enact19 ment of this title shall certify to the participating 

20 State that the principals of such entity have not 

21 been convicted of a sex offense against a minor (as 

22 such terms are defined in section 111 of the Sex Of23 fender Registration and Notification Act (42 U.S.C. 

24 16911)). 


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1 (d) PROHIBITION ON PORNOGRAPHY.—None of the 

2 funds made available under this title may be used to pay 

3 the salary of any individual engaged in activities related 

4 to the Program who has been officially disciplined for vio5 lations of subpart G of the Standards of Ethical Conduct 

6 for Employees of the Executive Branch for viewing, 

7 downloading, or exchanging pornography, including child 

8 pornography, on a Federal Government computer or while 

9 performing official Federal Government duties. 

10 TITLE III—SMALL BUSINESS 

11 EARLY-STAGE INVESTMENT 

12 PROGRAM 

13 SEC. 301. SHORT TITLE. 

14 This title may be cited as the ‘‘Small Business Early15 Stage Investment Program Act of 2010’’. 

16 SEC. 302. SMALL BUSINESS EARLY-STAGE INVESTMENT 

17 PROGRAM. 

18 Title III of the Small Business Investment Act of 

19 1958 (15 U.S.C. 681 et seq.) is amended by adding at 

20 the end the following: 

21 ‘‘PART D—SMALL BUSINESS EARLY-STAGE 

22 INVESTMENT PROGRAM 

23 ‘‘SEC. 399A. ESTABLISHMENT OF PROGRAM. 

24 ‘‘The Administrator shall establish and carry out an 

25 early-stage investment program (hereinafter referred to in 


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1 this part as the ‘program’) to provide equity investment 

2 financing to support early-stage small businesses in ac3 cordance with this part. 

4 ‘‘SEC. 399B. ADMINISTRATION OF PROGRAM. 

5 ‘‘The program shall be administered by the Adminis6 trator acting through the Associate Administrator de7 scribed under section 201. 

8 ‘‘SEC. 399C. APPLICATIONS. 

9 ‘‘(a) IN GENERAL.—Any existing or newly formed in10 corporated body, limited liability company, or limited part11 nership organized and chartered or otherwise existing 

12 under Federal or State law for the purpose of performing 

13 the functions and conducting the activities contemplated 

14 under the program and any manager of any small business 

15 investment company may submit to the Administrator an 

16 application to participate in the program. 

17 ‘‘(b) REQUIREMENTS FOR APPLICATION.—An appli18 cation to participate in the program shall include the fol19 lowing: 

20 ‘‘(1) A business plan describing how the appli21 cant intends to make successful venture capital in22 vestments in early-stage small businesses and direct 

23 capital to small business concerns in targeted indus24 tries or other business sectors. 


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1 ‘‘(2) Information regarding the relevant venture 

2 capital investment qualifications and backgrounds of 

3 the individuals responsible for the management of 

4 the applicant. 

5 ‘‘(3) A description of the extent to which the 

6 applicant meets the selection criteria under section 

7 399D. 

8 ‘‘(c) APPLICATIONS FROM MANAGERS OF SMALL

9 BUSINESS INVESTMENT COMPANIES.—The Administrator 

10 shall establish an abbreviated application process for ap11 plicants that are managers of small business investment 

12 companies that are licensed under section 301 and that 

13 are applying to participate in the program. Such abbre14 viated process shall incorporate a presumption that such 

15 managers satisfactorily meet the selection criteria under 

16 paragraphs (3) and (5) of section 399D(b). 

17 ‘‘SEC. 399D. SELECTION OF PARTICIPATING INVESTMENT 

18 COMPANIES. 

19 ‘‘(a) IN GENERAL.—Not later than 90 days after the 

20 date on which the Administrator receives an application 

21 from an applicant under section 399C, the Administrator 

22 shall make a determination to conditionally approve or dis23 approve such applicant to participate in the program and 

24 shall transmit such determination to the applicant in writ25 ing. A determination to conditionally approve an applicant 


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1 shall identify all conditions necessary for a final approval 

2 and shall provide a period of not less than one year for 

3 satisfying such conditions. 

4 ‘‘(b) SELECTION CRITERIA.—In making a determina5 tion under subsection (a), the Administrator shall consider 

6 each of the following: 

7 ‘‘(1) The likelihood that the applicant will meet 

8 the goals specified in the business plan of the appli9 cant. 

10 ‘‘(2) The likelihood that the investments of the 

11 applicant will create or preserve jobs, both directly 

12 and indirectly. 

13 ‘‘(3) The character and fitness of the manage14 ment of the applicant. 

15 ‘‘(4) The experience and background of the 

16 management of the applicant. 

17 ‘‘(5) The extent to which the applicant will con18 centrate investment activities on early-stage small 

19 businesses. 

20 ‘‘(6) The likelihood that the applicant will 

21 achieve profitability. 

22 ‘‘(7) The experience of the management of the 

23 applicant with respect to establishing a profitable in24 vestment track record. 


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1 ‘‘(8) The extent to which the applicant will con2 centrate investment activities on small business con3 cerns in targeted industries. 

4 ‘‘(c) FINAL APPROVAL.—For each applicant provided 

5 a conditional approval under subsection (a), the Adminis6 trator shall provide final approval to participate in the 

7 program not later than 90 days after the date the appli8 cant satisfies the conditions specified by the Administrator 

9 under such subsection or, in the case of applicants whose 

10 partnership or management agreements conform to mod11 els approved by the Administrator, the Administrator shall 

12 provide final approval to participate in the program not 

13 later than 30 days after the date the applicant satisfies 

14 the conditions specified under such subsection. If an appli15 cant provided conditional approval under subsection (a) 

16 fails to satisfy the conditions specified by the Adminis17 trator in the time period designated under such sub18 section, the Administrator shall revoke the conditional ap19 proval. 

20 ‘‘SEC. 399E. EQUITY FINANCINGS. 

21 ‘‘(a) IN GENERAL.—The Administrator may make 

22 one or more equity financings to a participating invest23 ment company. 

24 ‘‘(b) EQUITY FINANCING AMOUNTS.— 


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1 ‘‘(1) NON-FEDERAL CAPITAL.—An equity fi2 nancing made to a participating investment company 

3 under the program may not be in an amount that 

4 exceeds the amount of the capital of such company 

5 that is not from a Federal source and that is avail6 able for investment on or before the date on which 

7 an equity financing is drawn upon. Such capital may 

8 include legally binding commitments with respect to 

9 capital for investment. 

10 ‘‘(2) LIMITATION ON AGGREGATE AMOUNT.— 

11 The aggregate amount of all equity financings made 

12 to a participating investment company under the 

13 program may not exceed $100,000,000. 

14 ‘‘(c) EQUITY FINANCING PROCESS.—In making an 

15 equity financing under the program, the Administrator 

16 shall commit an equity financing amount to a partici17 pating investment company and the amount of each such 

18 commitment shall remain available to be drawn upon by 

19 such company— 

20 ‘‘(1) for new-named investments during the 5- 

21 year period beginning on the date on which each 

22 such commitment is first drawn upon; and 

23 ‘‘(2) for follow-on investments and management 

24 fees during the 10-year period beginning on the date 

25 on which each such commitment is first drawn upon, 


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1 with not more than 2 additional 1-year periods avail2 able at the discretion of the Administrator. 

3 ‘‘(d) COMMITMENT OF FUNDS.—The Administrator 

4 shall make commitments for equity financings not later 

5 than 2 years after the date funds are appropriated for the 

6 program. 

7 ‘‘SEC. 399F. INVESTMENTS IN EARLY-STAGE SMALL BUSI8 NESSES. 

9 ‘‘(a) IN GENERAL.—As a condition of receiving an 

10 equity financing under the program, a participating in11 vestment company shall make all of the investments of 

12 such company in small business concerns, of which at least 

13 50 percent shall be early-stage small businesses. 

14 ‘‘(b) EVALUATION OF COMPLIANCE.—With respect to 

15 an equity financing amount committed to a participating 

16 investment company under section 399E, the Adminis17 trator shall evaluate the compliance of such company with 

18 the requirements under this section if such company has 

19 drawn upon 50 percent of such commitment. 

20 ‘‘SEC. 399G. PRO RATA INVESTMENT SHARES. 

21 ‘‘Each investment made by a participating invest22 ment company under the program shall be treated as com23 prised of capital from equity financings under the program 

24 according to the ratio that capital from equity financings 


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1 under the program bears to all capital available to such 

2 company for investment. 

3 ‘‘SEC. 399H. EQUITY FINANCING INTEREST. 

4 ‘‘(a) EQUITY FINANCING INTEREST.— 

5 ‘‘(1) IN GENERAL.—As a condition of receiving 

6 an equity financing under the program, a partici7 pating investment company shall convey an equity fi8 nancing interest to the Administrator in accordance 

9 with paragraph (2). 

10 ‘‘(2) EFFECT OF CONVEYANCE.—The equity fi11 nancing interest conveyed under paragraph (1) shall 

12 have all the rights and attributes of other investors 

13 attributable to their interests in the participating in14 vestment company, but shall not denote control or 

15 voting rights to the Administrator. The equity fi16 nancing interest shall entitle the Administrator to a 

17 pro rata portion of any distributions made by the 

18 participating investment company equal to the per19 centage of capital in the participating investment 

20 company that the equity financing comprises. The 

21 Administrator shall receive distributions from the 

22 participating investment company at the same times 

23 and in the same amounts as any other investor in 

24 the company with a similar interest. The investment 

25 company shall make allocations of income, gain, loss, 


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1 deduction, and credit to the Administrator with re2 spect to the equity financing interest as if the Ad3 ministrator were an investor. 

4 ‘‘(b) MANAGER PROFITS.—As a condition of receiv5 ing an equity financing under the program, the manager 

6 profits interest payable to the managers of a participating 

7 investment company under the program shall not exceed 

8 20 percent of profits, exclusive of any profits that may 

9 accrue as a result of the capital contributions of any such 

10 managers with respect to such company. Any excess of 

11 this amount, less taxes payable thereon, shall be returned 

12 by the managers and paid to the investors and the Admin13 istrator in proportion to the capital contributions and eq14 uity financings paid in. No manager profits interest (other 

15 than a tax distribution) shall be paid prior to the repay16 ment to the investors and the Administrator of all contrib17 uted capital and equity financings made. 

18 ‘‘(c) DISTRIBUTION REQUIREMENTS.—As a condition 

19 of receiving an equity financing under the program, a par20 ticipating investment company shall make all distributions 

21 to all investors in cash and shall make distributions within 

22 a reasonable time after exiting investments, including fol23 lowing a public offering or market sale of underlying in24 vestments. 


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1 ‘‘SEC. 399I. FUND. 

2 ‘‘There is hereby created within the Treasury a sepa3 rate fund for equity financings which shall be available 

4 to the Administrator subject to annual appropriations as 

5 a revolving fund to be used for the purposes of the pro6 gram. All amounts received by the Administrator, includ7 ing any moneys, property, or assets derived by the Admin8 istrator from operations in connection with the program, 

9 shall be deposited in the fund. All expenses and payments, 

10 excluding administrative expenses, pursuant to the oper11 ations of the Administrator under the program shall be 

12 paid from the fund. 

13 ‘‘SEC. 399J. APPLICATION OF OTHER SECTIONS. 

14 ‘‘To the extent not inconsistent with requirements 

15 under this part, the Administrator may apply sections 

16 309, 311, 312, 313, and 314 to activities under this part 

17 and an officer, director, employee, agent, or other partici18 pant in a participating investment company shall be sub19 ject to the requirements under such sections. 

20 ‘‘SEC. 399K. ANNUAL REPORTING. 

21 ‘‘The Administrator shall report on the performance 

22 of the program in the annual performance report of the 

23 Administration. 

24 ‘‘SEC. 399L. DEFINITIONS. 

25 ‘‘In this part, the following definitions apply: 


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1 ‘‘(1) EARLY-STAGE SMALL BUSINESS.—The 

2 term ‘early-stage small business’ means a small busi3 ness concern that— 

4 ‘‘(A) is domiciled in a State; and 

5 ‘‘(B) has not generated gross annual sales 

6 revenues exceeding $15,000,000 in any of the 

7 previous 3 years. 

8 ‘‘(2) PARTICIPATING INVESTMENT COMPANY.— 

9 The term ‘participating investment company’ means 

10 an applicant approved under section 399D to par11 ticipate in the program. 

12 ‘‘(3) TARGETED INDUSTRIES.—The term ‘tar13 geted industries’ means any of the following business 

14 sectors: 

15 ‘‘(A) Agricultural technology. 

16 ‘‘(B) Energy technology. 

17 ‘‘(C) Environmental technology. 

18 ‘‘(D) Life science. 

19 ‘‘(E) Information technology. 

20 ‘‘(F) Digital media. 

21 ‘‘(G) Clean technology. 

22 ‘‘(H) Defense technology. 

23 ‘‘(I) Photonics technology. 


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1 ‘‘SEC. 399M. APPROPRIATION. 

2 ‘‘From funds not otherwise appropriated, there is 

3 hereby appropriated $1,000,000,000 to carry out the pro4 gram. 

5 ‘‘SEC. 399N. CERTIFICATION. 

6 ‘‘(a) IMMIGRATION CERTIFICATION.— 

7 ‘‘(1) PARTICIPATING INVESTMENT COMPA8 NIES.—Each participating investment company that 

9 receives an equity financing under this part after the 

10 date of the enactment of this part must, if applica11 ble, certify that such company is in compliance with 

12 the requirements of section 103.121 of title 31, Code 

13 of Federal Regulations, a regulation that, at a min14 imum, requires financial institutions, as that term is 

15 defined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to 

16 implement reasonable procedures to verify the iden17 tity of any person seeking to open an account, to the 

18 extent reasonable and practicable, maintain records 

19 of the information used to verify the person’s iden20 tity, and determine whether the person appears on 

21 any lists of known or suspected terrorists or ter22 rorist organizations provided to the financial institu23 tion by any government agency. 

24 ‘‘(2) EARLY-STAGE SMALL BUSINESSES.—Each 

25 early-stage small business that receives funds from 

26 a participating investment company that receives an 


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1 equity financing under this part after the date of the 

2 enactment of this part must, if applicable, certify 

3 that such company is in compliance with the require4 ments of section 103.121 of title 31, Code of Fed5 eral Regulations, a regulation that, at a minimum, 

6 requires financial institutions, as that term is de7 fined in 31 U.S.C. 5312(a)(2) and (c)(1)(A), to im8 plement reasonable procedures to verify the identity 

9 of any person seeking to open an account, to the ex10 tent reasonable and practicable, maintain records of 

11 the information used to verify the person’s identity, 

12 and determine whether the person appears on any 

13 lists of known or suspected terrorists or terrorist or14 ganizations provided to the financial institution by 

15 any government agency. 

16 ‘‘(b) SEX OFFENDER CERTIFICATION.— 

17 ‘‘(1) PARTICIPATING INVESTMENT COMPA18 NIES.—Each participating investment company that 

19 receives an equity financing under this part after the 

20 date of the enactment of this part shall certify to the 

21 Administrator that the principals of such company 

22 have not been convicted of a sex offense against a 

23 minor (as such terms are defined in section 111 of 

24 the Sex Offender Registration and Notification Act 

25 (42 U.S.C. 16911)). 


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1 ‘‘(2) EARLY-STAGE SMALL BUSINESSES.—Each 

2 early-stage small business that receives funds from 

3 a participating investment company that receives an 

4 equity financing under this part after the date of the 

5 enactment of this part shall certify to the Adminis6 trator that the principals of such business have not 

7 been convicted of a sex offense against a minor (as 

8 such terms are defined in section 111 of the Sex Of9 fender Registration and Notification Act (42 U.S.C. 

10 16911)). 

11 ‘‘(c) PORNOGRAPHY CERTIFICATION.—None of the 

12 funds made available under this part may be used to pay 

13 the salary of any individual engaged in activities related 

14 to the provisions of this part who has been officially dis15 ciplined for violations of subpart G of the Standards of 

16 Ethical Conduct for Employees of the Executive Branch 

17 for viewing, downloading, or exchanging pornography, in18 cluding child pornography, on a Federal Government com19 puter or while performing official Federal Government du20 ties.’’. 

21 SEC. 303. REGULATIONS. 

22 Not later than 180 days after the date of enactment 

23 of this Act, the Administrator shall issue regulations to 

24 carry out this title and the amendments made by this title. 


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1 SEC. 304. PROHIBITIONS ON EARMARKS. 

2 None of the funds appropriated for the program es3 tablished under part D of title III of the Small Business 

4 Investment Act of 1958, as added by this Act, may be 

5 used for a Congressional earmark as defined in clause 9(e) 

6 of rule XXI of the Rules of the House of Representatives. 

7 TITLE IV—MISCELLANEOUS 

8 SEC. 401. BUDGETARY EFFECTS. 

9 The budgetary effects of this Act, for the purpose of 

10 complying with the Statutory Pay-As-You-Go Act of 2010, 

11 shall be determined by reference to the latest statement 

12 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

13 Act, submitted for printing in the Congressional Record 

14 by the Chairman of the House Budget Committee, pro15 vided that such statement has been submitted prior to the 

16 vote on passage. 

17 TITLE V—TAX PROVISIONS 

18 SEC. 500. SHORT TITLE; ETC. 

19 (a) SHORT TITLE.—This title may be cited as the 

20 ‘‘Small Business Jobs Tax Relief Act of 2010’’. 

21 (b) AMENDMENT OF 1986 CODE.—Except as other22 wise expressly provided, whenever in this title an amend23 ment or repeal is expressed in terms of an amendment 

24 to, or repeal of, a section or other provision, the reference 

25 shall be considered to be made to a section or other provi26 sion of the Internal Revenue Code of 1986. 


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1 Subtitle A—Small Business Tax 

2 Incentives 

3 PART 1—GENERAL PROVISIONS 

4 SEC. 501. TEMPORARY EXCLUSION OF 100 PERCENT OF 

5 GAIN ON CERTAIN SMALL BUSINESS STOCK. 

6 (a) IN GENERAL.—Subsection (a) of section 1202 is 

7 amended by adding at the end the following new para8 graph: 

9 ‘‘(4) SPECIAL 100 PERCENT EXCLUSION.—In 

10 the case of qualified small business stock acquired 

11 after March 15, 2010, and before January 1, 

12 2012— 

13 ‘‘(A) paragraph (1) shall be applied by 

14 substituting ‘100 percent’ for ‘50 percent’, 

15 ‘‘(B) paragraph (2) shall not apply, and 

16 ‘‘(C) paragraph (7) of section 57(a) shall 

17 not apply.’’. 

18 (b) CONFORMING AMENDMENTS.—Paragraph (3) of 

19 section 1202(a) is amended— 

20 (1) by striking ‘‘after the date of the enactment 

21 of this paragraph and before January 1, 2011’’ and 

22 inserting ‘‘after February 17, 2009, and before 

23 March 16, 2010’’; and 


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1 (2) by striking ‘‘SPECIAL RULES FOR 2009 AND

2 2010’’ in the heading and inserting ‘‘SPECIAL 75

3 PERCENT EXCLUSION’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to stock acquired after March 15, 

6 2010. 

7 PART 2—LIMITATIONS AND REPORTING ON 

8 CERTAIN PENALTIES 

9 SEC. 511. LIMITATION ON PENALTY FOR FAILURE TO DIS10 CLOSE CERTAIN INFORMATION. 

11 (a) IN GENERAL.—Subsection (b) of section 6707A 

12 is amended to read as follows: 

13 ‘‘(b) AMOUNT OF PENALTY.— 

14 ‘‘(1) IN GENERAL.—Except as otherwise pro15 vided in this subsection, the amount of the penalty 

16 under subsection (a) with respect to any reportable 

17 transaction shall be 75 percent of the decrease in 

18 tax shown on the return as a result of such trans19 action (or which would have resulted from such 

20 transaction if such transaction were respected for 

21 Federal tax purposes). 

22 ‘‘(2) MAXIMUM PENALTY.—The amount of the 

23 penalty under subsection (a) with respect to any re24 portable transaction for any taxable year shall not 

25 exceed— 


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1 ‘‘(A) in the case of a listed transaction, 

2 $200,000 ($100,000 in the case of a natural 

3 person), or 

4 ‘‘(B) in the case of any other reportable 

5 transaction, $50,000 ($10,000 in the case of a 

6 natural person). 

7 ‘‘(3) MINIMUM PENALTY.—The amount of the 

8 penalty under subsection (a) with respect to any 

9 transaction for any taxable year shall not be less 

10 than $10,000 ($5,000 in the case of a natural per11 son).’’. 

12 (b) EFFECTIVE DATE.—The amendment made by 

13 this section shall apply to penalties assessed after Decem14 ber 31, 2006. 

15 SEC. 512. ANNUAL REPORTS ON PENALTIES AND CERTAIN 

16 OTHER ENFORCEMENT ACTIONS. 

17 (a) IN GENERAL.—The Commissioner of Internal 

18 Revenue, in consultation with the Secretary of the Treas19 ury, shall submit to the Committee on Ways and Means 

20 of the House of Representatives and the Committee on 

21 Finance of the Senate an annual report on the penalties 

22 assessed by the Internal Revenue Service during the pre23 ceding year under each of the following provisions of the 

24 Internal Revenue Code of 1986: 


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1 (1) Section 6662A (relating to accuracy-related 

2 penalty on understatements with respect to report3 able transactions). 

4 (2) Section 6700(a) (relating to promoting abu5 sive tax shelters). 

6 (3) Section 6707 (relating to failure to furnish 

7 information regarding reportable transactions). 

8 (4) Section 6707A (relating to failure to include 

9 reportable transaction information with return). 

10 (5) Section 6708 (relating to failure to main11 tain lists of advisees with respect to reportable 

12 transactions). 

13 (b) ADDITIONAL INFORMATION.—The report re14 quired under subsection (a) shall also include information 

15 on the following with respect to each year: 

16 (1) Any action taken under section 330(b) of 

17 title 31, United States Code, with respect to any re18 portable transaction (as defined in section 6707A(c) 

19 of the Internal Revenue Code of 1986). 

20 (2) Any extension of the time for assessment of 

21 tax enforced, or assessment of any amount under 

22 such an extension, under paragraph (10) of section 

23 6501(c) of the Internal Revenue Code of 1986. 


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1 (c) DATE OF REPORT.—The first report required 

2 under subsection (a) shall be submitted not later than De3 cember 31, 2010. 

4 PART 3—OTHER PROVISIONS 

5 SEC. 521. INCREASE IN AMOUNT ALLOWED AS DEDUCTION 

6 FOR START-UP EXPENDITURES. 

7 (a) IN GENERAL.—Subsection (b) of section 195 is 

8 amended by adding at the end the following new para9 graph: 

10 ‘‘(3) INCREASED LIMITATION FOR TAXABLE

11 YEARS BEGINNING IN 2010 OR 2011.—In the case of 

12 any taxable year beginning in 2010 or 2011, para13 graph (1)(A)(ii) shall be applied— 

14 ‘‘(A) by substituting ‘$20,000’ for 

15 ‘$5,000’, and 

16 ‘‘(B) by substituting ‘$75,000’ for 

17 ‘$50,000’.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to taxable years beginning after 

20 December 31, 2009. 


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1 SEC. 522. NONRECOURSE SMALL BUSINESS INVESTMENT 

2 COMPANY LOANS FROM THE SMALL BUSI3 NESS ADMINISTRATION TREATED AS 

4 AMOUNTS AT RISK. 

5 (a) IN GENERAL.—Subparagraph (B) of section 

6 465(b)(6) is amended to read as follows: 

7 ‘‘(B) QUALIFIED NONRECOURSE FINANC8 ING.—For purposes of this paragraph— 

9 ‘‘(i) IN GENERAL.—The term ‘quali10 fied nonrecourse financing’ means any fi11 nancing— 

12 ‘‘(I) which is qualified real prop13 erty financing or qualified SBIC fi14 nancing, 

15 ‘‘(II) except to the extent pro16 vided in regulations, with respect to 

17 which no person is personally liable 

18 for repayment, and 

19 ‘‘(III) which is not convertible 

20 debt. 

21 ‘‘(ii) QUALIFIED REAL PROPERTY FI22 NANCING.—The term ‘qualified real prop23 erty financing’ means any financing 

24 which— 


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1 ‘‘(I) is borrowed by the taxpayer 

2 with respect to the activity of holding 

3 real property, 

4 ‘‘(II) is secured by real property 

5 used in such activity, and 

6 ‘‘(III) is borrowed by the tax7 payer from a qualified person or rep8 resents a loan from any Federal, 

9 State, or local government or instru10 mentality thereof, or is guaranteed by 

11 any Federal, State, or local govern12 ment. 

13 ‘‘(iii) QUALIFIED SBIC FINANCING.— 

14 The term ‘qualified SBIC financing’ means 

15 any financing which— 

16 ‘‘(I) is borrowed by a small busi17 ness investment company (within the 

18 meaning of section 301 of the Small 

19 Business Investment Act of 1958), 

20 and 

21 ‘‘(II) is borrowed from, or guar22 anteed by, the Small Business Admin23 istration under the authority of sec24 tion 303(b) of such Act.’’. 


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1 (b) CONFORMING AMENDMENTS.—Subparagraph (A) 

2 of section 465(b)(6) is amended— 

3 (1) by striking ‘‘in the case of an activity of 

4 holding real property,’’; and 

5 (2) by striking ‘‘which is secured by real prop6 erty used in such activity’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to loans and guarantees made after 

9 the date of the enactment of this Act. 

10 SEC. 523. BENEFITS UNDER THE SMALL BUSINESS BOR11 ROWER ASSISTANCE PROGRAM EXCLUDED 

12 FROM GROSS INCOME. 

13 (a) IN GENERAL.—Part III of subchapter B of chap14 ter 1 is amended by adding at the end the following new 

15 section: 

16 ‘‘SEC. 139F. BENEFITS UNDER THE SMALL BUSINESS BOR17 ROWER ASSISTANCE PROGRAM. 

18 ‘‘(a) IN GENERAL.—Gross income shall not include 

19 any amount paid on behalf of a borrower by the Adminis20 trator of the Small Business Administration under the 

21 Small Business Borrower Assistance program established 

22 under section 402 of the Small Business Assistance Fund 

23 Act of 2010 (as in effect immediately after the date of 

24 the enactment of such Act). 


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1 ‘‘(b) DENIAL OF DOUBLE BENEFIT.—Notwith2 standing any other provision of this subtitle, with respect 

3 to the person for whose benefit a payment described in 

4 subsection (a) is made— 

5 ‘‘(1) INTEREST.—No deduction shall be allowed 

6 for interest to the extent the liability for such inter7 est is covered by such payment. 

8 ‘‘(2) PAYMENTS OF PRINCIPAL.—If any pay9 ment is applied to reduce the principal of the loan 

10 to which such payment relates— 

11 ‘‘(A) ALLOCATION AMONG FINANCED EX12 PENDITURES.—Such payment shall be allocated 

13 pro rata among the expenditures financed with 

14 such loan. 

15 ‘‘(B) CREDITS AND DEDUCTIBLE EX16 PENSES.—No deduction or credit shall be al17 lowed for, or by reason of, any such expenditure 

18 to the extent of the amount of the payment al19 located to such expenditure under subparagraph 

20 (A). 

21 ‘‘(C) ADJUSTMENT OF BASIS.—The ad22 justed basis of any property acquired with such 

23 expenditure shall be reduced to the extent of 

24 the amount of the payment allocated to such 

25 expenditure under subparagraph (A).’’. 


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1 (b) CLERICAL AMENDMENTS.—The table of sections 

2 for part III of subchapter B of chapter 1 is amended by 

3 adding at the end the following new item: 

‘‘Sec. 139F. Benefits under the Small Business Borrower Assistance Program.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to payments made after the date 

6 of the enactment of this Act. 

7 Subtitle B—Revenue Provisions 

8 SEC. 531. REQUIRED MINIMUM 10-YEAR TERM, ETC., FOR 

9 GRANTOR RETAINED ANNUITY TRUSTS. 

10 (a) IN GENERAL.—Subsection (b) of section 2702 is 

11 amended— 

12 (1) by redesignating paragraphs (1), (2) and 

13 (3) as subparagraphs (A), (B), and (C), respectively, 

14 and by moving such subparagraphs (as so redesig15 nated) 2 ems to the right; 

16 (2) by striking ‘‘For purposes of’’ and inserting 

17 the following: 

18 ‘‘(1) IN GENERAL.—For purposes of’’; 

19 (3) by striking ‘‘paragraph (1) or (2)’’ in para20 graph (1)(C) (as so redesignated) and inserting 

21 ‘‘subparagraph (A) or (B)’’; and 

22 (4) by adding at the end the following new 

23 paragraph: 


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1 ‘‘(2) ADDITIONAL REQUIREMENTS WITH RE2 SPECT TO GRANTOR RETAINED ANNUITIES.—For 

3 purposes of subsection (a), in the case of an interest 

4 described in paragraph (1)(A) (determined without 

5 regard to this paragraph) which is retained by the 

6 transferor, such interest shall be treated as de7 scribed in such paragraph only if— 

8 ‘‘(A) the right to receive the fixed amounts 

9 referred to in such paragraph is for a term of 

10 not less than 10 years, 

11 ‘‘(B) such fixed amounts, when determined 

12 on an annual basis, do not decrease relative to 

13 any prior year during the first 10 years of the 

14 term referred to in subparagraph (A), and 

15 ‘‘(C) the remainder interest has a value 

16 greater than zero determined as of the time of 

17 the transfer.’’. 

18 (b) EFFECTIVE DATE.—The amendments made by 

19 this section shall apply to transfers made after the date 

20 of the enactment of this Act. 

21 SEC. 532. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC 

22 BIOFUEL PRODUCER CREDIT. 

23 (a) IN GENERAL.—Clause (iii) of section 40(b)(6)(E) 

24 is amended— 

25 (1) by striking ‘‘or’’ at the end of subclause (I), 


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1 (2) by striking the period at the end of sub2 clause (II) and inserting ‘‘, or’’, 

3 (3) by adding at the end the following new sub4 clause: 

5 ‘‘(III) such fuel has an acid num6 ber greater than 25.’’, and 

7 (4) by striking ‘‘UNPROCESSED’’ in the heading 

8 and inserting ‘‘CERTAIN’’. 

9 (b) EFFECTIVE DATE.—The amendment made by 

10 this section shall apply to fuels sold or used on or after 

11 January 1, 2010. 

12 SEC. 533. TIME FOR PAYMENT OF CORPORATE ESTIMATED 

13 TAXES. 

14 The percentage under paragraph (2) of section 561 

15 of the Hiring Incentives to Restore Employment Act in 

16 effect on the date of the enactment of this Act is increased 

17 by 7.75 percentage points. 

18 TITLE VI—PLAIN WRITING ACT 

19 SEC. 601. SHORT TITLE. 

20 This title may be cited as the ‘‘Plain Writing Act of 

21 2010’’. 

22 SEC. 602. PURPOSE. 

23 The purpose of this title is to improve the effective24 ness and accountability of Federal agencies to the public 


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1 by promoting clear Government communication that the 

2 public can understand and use. 

3 SEC. 603. DEFINITIONS. 

4 In this title: 

5 (1) AGENCY.—The term ‘‘agency’’ means the 

6 Department of the Treasury and the Small Business 

7 Administration. 

8 (2) COVERED DOCUMENT.—The term ‘‘covered 

9 document’’— 

10 (A) means any document that— 

11 (i) is relevant to obtaining any Fed12 eral Government benefit or service pro13 vided under title I, II, or III; 

14 (ii) provides information about any 

15 Federal Government benefit or service pro16 vided under title I, II, or III; or 

17 (iii) explains to the public how to com18 ply with a requirement the Federal Gov19 ernment administers or enforces under title 

20 I, II, or III; 

21 (B) includes (whether in paper or elec22 tronic form) a letter, publication, form, notice, 

23 or instruction; and 

24 (C) does not include a regulation. 


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1 (3) PLAIN WRITING.—The term ‘‘plain writing’’ 

2 means writing that the intended audience can read3 ily understand and use because that writing is clear, 

4 concise, well-organized, and follows other best prac5 tices of plain writing. 

6 SEC. 604. RESPONSIBILITIES OF FEDERAL AGENCIES. 

7 (a) PREPARATION FOR IMPLEMENTATION OF PLAIN

8 WRITING REQUIREMENTS.— 

9 (1) IN GENERAL.—Not later than 9 months 

10 after the date of enactment of this title, the head of 

11 each agency shall— 

12 (A) designate 1 or more senior officials 

13 within the agency to oversee the agency imple14 mentation of this title; 

15 (B) communicate the requirements of this 

16 title to the employees of the agency; 

17 (C) train employees of the agency in plain 

18 writing; 

19 (D) establish a process for overseeing the 

20 ongoing compliance of the agency with the re21 quirements of this title; 

22 (E) create and maintain a plain writing 

23 section of the agency’s website that is accessible 

24 from the homepage of the agency’s website; and 


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1 (F) designate 1 or more agency points-of2 contact to receive and respond to public input 

3 on— 

4 (i) agency implementation of this title; 

5 and 

6 (ii) the agency reports required under 

7 section 605. 

8 (2) WEBSITE.—The plain writing section de9 scribed under paragraph (1)(E) shall— 

10 (A) inform the public of agency compliance 

11 with the requirements of this title; and 

12 (B) provide a mechanism for the agency to 

13 receive and respond to public input on— 

14 (i) agency implementation of this title; 

15 and 

16 (ii) the agency reports required under 

17 section 605. 

18 (b) REQUIREMENT TO USE PLAIN WRITING IN NEW

19 DOCUMENTS.—Beginning not later than 1 year after the 

20 date of enactment of this title, each agency shall use plain 

21 writing in every covered document of the agency that the 

22 agency issues or substantially revises. 

23 (c) GUIDANCE.—In carrying out the provisions of this 

24 title, agencies may follow the guidance of— 


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1 (1) the writing guidelines developed by the 

2 Plain Language Action and Information Network; or 

3 (2) guidance provided by the head of the agen4 cy. 

5 SEC. 605. REPORTS TO CONGRESS. 

6 (a) INITIAL REPORT.—Not later than 9 months after 

7 the date of enactment of this title, the head of each agency 

8 shall publish on the plain writing section of the agency’s 

9 website a report that describes the agency plan for compli10 ance with the requirements of this title. 

11 (b) ANNUAL COMPLIANCE REPORT.—Not later than 

12 18 months after the date of enactment of this title, and 

13 annually thereafter, the head of each agency shall publish 

14 on the plain writing section of the agency’s website a re15 port on agency compliance with the requirements of this 

16 title. 

17 TITLE VII—SENSE OF CONGRESS 

18 ON AGRICULTURE AND FARM19 ING SMALL BUSINESS LOANS 

20 SEC. 701. SENSE OF CONGRESS. 

21 It is the sense of the Congress that— 

22 (1) agriculture operations, farms, and rural 

23 communities should receive equal consideration 

24 through lending activities for small businesses in 


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1 this Act, particularly small- and mid-size farms and 

2 agriculture operations; and 

3 (2) attention should be given to ensuring there 

4 is adequate small business credit and financing 

5 availability under this Act in the agriculture and 

6 farming sectors. 

7 TITLE VIII—SMALL BUSINESS 

8 BORROWER ASSISTANCE PRO9 GRAM 

10 SEC. 801. SHORT TITLE. 

11 This title may be cited as the ‘‘Small Business Assist12 ance Fund Act of 2010’’. 

13 SEC. 802. SMALL BUSINESS BORROWER ASSISTANCE PRO14 GRAM. 

15 (a) IN GENERAL.—The Administrator shall carry out 

16 a program to be called the ‘‘Small Business Borrower As17 sistance Program’’ to provide payments of principal and 

18 interest on qualifying small business loans. 

19 (b) AUTOMATIC ENROLLMENT; COMMITMENT OF

20 FUNDS.— 

21 (1) IN GENERAL.—To the extent funds are 

22 available under the Program, each borrower that re23 ceives a qualifying small business loan after the date 

24 on which the Administrator issues regulations pursu25 ant to subsection (e) shall be automatically enrolled 


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1 in the Program, unless the borrower requests other2 wise, and the Administrator shall commit an amount 

3 to each borrower equal to 6 percent of the principal 

4 disbursed amount of such borrower’s qualifying 

5 small business loan. 

6 (2) ONE YEAR WINDOW FOR PARTICIPATING IN

7 PROGRAM.—Notwithstanding paragraph (1), a bor8 rower may only be enrolled in the Program if the 

9 borrower is approved for a qualifying small business 

10 loan before the end of the 1-year period following 

11 the date on which the Administrator issues final reg12 ulations pursuant to subsection (e). 

13 (3) TERMINATION OF PARTICIPATION IN CER14 TAIN CIRCUMSTANCES.—In any instance in which 

15 the Administrator determines that a borrower par16 ticipating in the Program has committed fraud or 

17 made a material misrepresentation related to such 

18 participation, the Administrator may terminate such 

19 borrower’s participation in the Program and ban 

20 such borrower from any future participation in the 

21 Program. 

22 (c) DISBURSEMENT OF FUNDS.— 

23 (1) IN GENERAL.—A borrower enrolled in the 

24 Program may submit a request for the payment of 


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1 committed funds by a method to be developed by the 

2 Administrator. 

3 (2) MULTIPLE DISBURSEMENTS PERMITTED.— 

4 A borrower enrolled in the Program may request 

5 multiple payments under paragraph (1), as long as 

6 the aggregate amount of such payments does not ex7 ceed the amount committed to such borrower under 

8 subsection (b). 

9 (d) TERMS.— 

10 (1) PAYMENTS ONLY TO LENDER OR

11 SERVICER.—Payments made by the Administrator 

12 under the Program shall only be made to the lender 

13 or servicer of a qualifying small business loan to be 

14 applied against outstanding principal or interest, 

15 and may not be made to the borrower. 

16 (2) PROGRAM PARTICIPATION ONLY PERMITTED

17 DURING FIRST 2 YEARS.— 

18 (A) IN GENERAL.—Payments made by the 

19 Administrator under the Program may only be 

20 made with respect to a payment of interest or 

21 principal due on a qualifying small business 

22 loan within the 2-year period following the date 

23 on which such loan is disbursed. 

24 (B) UNEXPENDED COMMITTED FUNDS.— 


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1 (i) IN GENERAL.—With respect to any 

2 funds committed to a borrower enrolled in 

3 the Program that remain unexpended at 

4 the end of the 2-year period described 

5 under subparagraph (A), such funds shall 

6 be paid to the lender or servicer of the bor7 rower’s loan and applied to the principal of 

8 such loan. 

9 (ii) EXCEPTION.—In any case in 

10 which the amount of committed funds that 

11 remain unexpended is greater than the re12 maining principal of a borrower’s loan, the 

13 amount of any excess shall be returned to 

14 the Treasury. 

15 (e) RULEMAKING.—Not later than 180 days after the 

16 date of the enactment of this section, the Administrator 

17 shall issue regulations necessary to carry out this section. 

18 (f) CONTRACTING WITH AGENTS.—The Adminis19 trator may contract with one or more entities as necessary 

20 to carry out the provisions of the Program. The Secretary 

21 of the Treasury is authorized to designate financial insti22 tutions, including any bank, savings association, or trust 

23 company, as financial agents of the Federal Government 

24 to carry out the authorities of this section, and such insti25 tutions shall perform all such reasonable duties related to 


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1 the Program as financial agents of the Federal Govern2 ment as the Secretary may require. In engaging any such 

3 third parties to carry out the Program, the Administrator 

4 or the Secretary shall seek to involve small businesses in 

5 the provision of the core direct services required under the 

6 engagement. 

7 (g) DEFINITIONS.—For purposes of this section: 

8 (1) ADMINISTRATOR.—The term ‘‘Adminis9 trator’’ means the Administrator of the Small Busi10 ness Administration. 

11 (2) PROGRAM.—The term ‘‘Program’’ means 

12 the Small Business Borrower Assistance Program 

13 established under subsection (a). 

14 (3) QUALIFYING SMALL BUSINESS LOAN.—The 

15 term ‘‘qualifying small business loan’’ means any 

16 loan, up to $300,000, made to a small business con17 cern and guaranteed under section 7(a) of the Small 

18 Business Act (15 U.S.C. 636(a)), other than a loan 

19 made pursuant to section 7(a)(31) of such Act, a re20 volving credit line, or any other revolving loan. 

21 (4) SMALL BUSINESS CONCERN.—The term 

22 ‘‘small business concern’’ has the meaning given 

23 such term under section 3 of the Small Business Act 

24 (15 U.S.C. 632). 


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1 (h) AUTHORIZATION OF APPROPRIATIONS.—There is 

2 hereby authorized to be appropriated to the Administrator 

3 $300,000,000 to carry out this section. 

Passed the House of Representatives June 17, 2010. 

Attest: LORRAINE C. MILLER, 

Clerk. 


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Calendar No. 435 

111TH CONGRESS 

2D SESSION H. R. 5297 

AN ACT 

To create the Small Business Lending Fund Probusiness job creation, and for other purposes. Code of 1986 to provide tax incentives for small small businesses, to amend the Internal Revenue in order to increase the availability of credit for make capital investments in eligible institutions gram to direct the Secretary of the Treasury to 

JUNE 21, 2010 

Read the second time and placed on the calendar 


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