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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5302 Introduced in House (IH)]

111th CONGRESS
  2d Session
                                H. R. 5302

To establish the State Small Business Credit Initiative, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              May 13, 2010

   Mr. Peters (for himself, Mr. Levin, Mr. Dingell, Mr. Maffei, Mr. 
Sarbanes, Mr. Reyes, Ms. Norton, Mr. Schauer, Mr. Pascrell, Mr. Stupak, 
 Ms. Tsongas, Mr. Watt, Mr. Tonko, Mr. Etheridge, Ms. Linda T. Sanchez 
  of California, Mr. Adler of New Jersey, Mr. Kanjorski, Mr. Moore of 
 Kansas, Mr. Michaud, Ms. Sutton, Ms. Bean, Mr. Lipinski, Ms. Moore of 
Wisconsin, Mr. Loebsack, Mr. Kildee, and Mr. Miller of North Carolina) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

_______________________________________________________________________

                                 A BILL

 
To establish the State Small Business Credit Initiative, and for other 
                               purposes.

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

SECTION 1. SHORT TITLE.

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

SEC. 2. DEFINITIONS.

    For purposes of this Act, the following definitions shall apply:
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency''--
                    (A) has the same meaning as in section 3 of the 
                Federal Deposit Insurance Act; and
                    (B) includes the National Credit Union 
                Administration Board in the case of any credit union 
                the deposits of which are insured in accordance with 
                the Federal Credit Union Act.
            (2) Enrolled loan.--The term ``enrolled loan'' means a loan 
        made by a financial institution lender that is enrolled by a 
        participating State in an approved State capital access program 
        in accordance with this Act.
            (3) Federal contribution.--The term ``Federal 
        contribution'' means the portion of the contribution made by a 
        participating State to, or for the account of, an approved 
        State program that is made with Federal funds allocated to the 
        State by the Secretary under section 3.
            (4) Financial institution.--The term ``financial 
        institution'' means any insured depository institution, insured 
        credit union, or community development financial institution, 
        as those terms are each defined in section 103 of the Riegle 
        Community Development and Regulatory Improvement Act of 1994.
            (5) Participating state.--The term ``participating State'' 
        means any State that has been approved for participation in the 
        Program under section 4.
            (6) Program.--The term ``Program'' means the State Small 
        Business Credit Initiative established under this Act.
            (7) Qualifying loan or swap funding facility.--The term 
        ``qualifying loan or swap funding facility'' means a 
        contractual arrangement between a participating State and a 
        private financial entity under which--
                    (A) the participating State delivers funds to the 
                entity as collateral;
                    (B) the entity provides funding from the 
                arrangement back to the participating State; and
                    (C) the full amount of resulting funding from the 
                arrangement, less any fees and other costs of the 
                arrangement, is contributed to, or for the account of, 
                an approved State program.
            (8) Reserve fund.--The term ``reserve fund'' means a fund, 
        established by a participating State, dedicated to a particular 
        financial institution lender, for the purposes of--
                    (A) depositing all required premium charges paid by 
                the financial institution lender and by each borrower 
                receiving a loan under an approved State program from 
                that financial institution lender;
                    (B) depositing contributions made by the 
                participating State, including State contributions made 
                with Federal contributions; and
                    (C) covering losses on enrolled loans by disbursing 
                accumulated funds.
            (9) State.--The term ``State'' means--
                    (A) a State of the United States;
                    (B) the District of Columbia;
                    (C) when designated by a State of the United 
                States, a political subdivision of that State that the 
                Secretary determines has the capacity to participate in 
                the Program; and
                    (D) under the circumstances described in section 
                4(d), a municipality of a State of the United States to 
                which the Secretary has given a special permission 
                under section 4(d).
            (10) State capital access program.--The term ``State 
        capital access program'' means a program of a State that--
                    (A) uses public resources to promote private access 
                to credit; and
                    (B) meets the eligibility criteria in section 5(c).
            (11) State other credit support program.--The term ``State 
        other credit support program''--
                    (A) means a program of a State that--
                            (i) uses public resources to promote 
                        private access to credit;
                            (ii) is not a State capital access program; 
                        and
                            (iii) meets the eligibility criteria in 
                        section 6(c); and
                    (B) includes, collateral support programs, loan 
                participation programs, and credit guarantee programs.
            (12) State program.--The term ``State program'' means a 
        State capital access program or a State other credit support 
        program.
            (13) Secretary.--The term ``Secretary'' means the Secretary 
        of the Treasury.

SEC. 3. FEDERAL FUNDS ALLOCATED TO STATES.

    (a) Program Established; Purpose.--There is established the State 
Small Business Credit Initiative (Program), to be administered by the 
Secretary. Under the Program, the Secretary shall allocate Federal 
funds to participating States and make the allocated funds available to 
the participating States as provided in this section for the uses 
described in this section.
    (b) Allocation Formula.--
            (1) In general.--Not later than 30 days after the date of 
        enactment of this Act, the Secretary shall allocate Federal 
        funds to participating States so that each State is eligible to 
        receive an amount equal to the average of the respective 
        amounts that the State--
                    (A) would receive under the 2009 Allocation; and
                    (B) would receive under the 2010 Allocation.
            (2) 2009 allocation formula.--
                    (A) In general.--The Secretary shall determine the 
                2009 Allocation by allocating Federal funds among the 
                States in the proportion that each such State's 2008 
                State employment decline bears to the aggregate of the 
                2008 State employment declines for all States.
                    (B) Minimum allocation.--The Secretary shall adjust 
                the allocations under subparagraph (A) for each State 
                to the extent necessary to ensure that no State 
                receives less than 0.9 percent of the Federal funds.
                    (C) 2008 state employment decline defined.--For 
                purposes of this paragraph and with respect to a State, 
                the term ``2008 State employment decline'' means the 
                excess (if any) of--
                            (i) the number of individuals employed in 
                        such State determined for December 2007; over
                            (ii) the number of individuals employed in 
                        such State determined for December 2008.
            (3) 2010 allocation formula.--
                    (A) In general.--The Secretary shall determine the 
                2010 Allocation by allocating Federal funds among the 
                States in the proportion that each such State's 2009 
                unemployment number bears to the aggregate of the 2009 
                unemployment numbers for all of the States.
                    (B) Minimum allocation.--The Secretary shall adjust 
                the allocations under subparagraph (A) for each State 
                to the extent necessary to ensure that no State 
                receives less than 0.9 percent of the Federal funds.
                    (C) 2009 unemployment number defined.--For purposes 
                of this paragraph and with respect to a State, the term 
                ``2009 unemployment number'' means the number of 
                individuals within such State who were determined to be 
                unemployed by the Bureau of Labor Statistics for 
                December 2009.
    (c) Availability of Allocated Amount.--The amount allocated by the 
Secretary to each participating State under subsection (b) shall be 
made available to the State as follows:
            (1) Allocated amount generally to be available to state in 
        one-thirds.--Except as provided in paragraph (2)--
                    (A) the Secretary shall apportion the participating 
                State's allocated amount into one-thirds;
                    (B) the Secretary shall transfer to the 
                participating State the first one-third when the 
                Secretary approves the State for participation under 
                section 4; and
                    (C) the Secretary shall transfer to the 
                participating State each successive one-third when the 
                State has certified to the Secretary that it has 
                expended, transferred, or obligated 80 percent of the 
                last transferred one-third for Federal contributions 
                to, or for the account of, State programs.
        The Secretary may withhold the transfer of any successive one-
        third pending results of a financial audit.
            (2) Exception.--The Secretary may, in the Secretary's 
        discretion, transfer the full amount of the participating 
        State's allocated amount to the State in a single transfer if 
        the participating State applies to the Secretary for approval 
        to use the full amount of the allocation as collateral for a 
        qualifying loan or swap funding facility.
            (3) Transferred amounts.--Each amount transferred to a 
        participating State under this section shall remain available 
        to the State until used by the State as permitted under 
        paragraph (4).
            (4) Use of transferred funds.--Each participating State may 
        use funds transferred to it under this section only--
                    (A) for making Federal contributions to, or for the 
                account of, an approved State program;
                    (B) as collateral for a qualifying loan or swap 
                funding facility;
                    (C) in the case of the first one-third transferred, 
                for paying administrative costs incurred by the State 
                in implementing an approved State program in an amount 
                not to exceed 5 percent of that first one-third; or
                    (D) in the case of each successive one-third 
                transferred, for paying administrative costs incurred 
                by the State in implementing an approved State program 
                in an amount not to exceed 3 percent of that successive 
                one-third.
            (5) Termination of availability of amounts not transferred 
        within 2 years of participation.--Any portion of a 
        participating State's allocated amount that has not been 
        transferred to the State under this section by the end of the 
        2-year period beginning on the date that the Secretary approves 
        the State for participation may be deemed by the Secretary to 
        be no longer allocated to the State and no longer available to 
        the State and shall be returned to the General Fund.
            (6) Definitions.--For purposes of this section--
                    (A) the term ``allocated amount'' means the total 
                amount of Federal funds allocated by the Secretary 
                under subsection (b) to the participating State; and
                    (B) the term ``one-third'' means--
                            (i) in the case of the first and second 
                        one-thirds, an amount equal to 33 percent of a 
                        participating State's allocated amount; and
                            (ii) in the case of the last one-third, an 
                        amount equal to 34 percent of a participating 
                        State's allocated amount.

SEC. 4. APPROVING STATES FOR PARTICIPATION.

    (a) Application.--Any State may apply to the Secretary for approval 
to be a participating State under the Program and to be eligible for an 
allocation of Federal funds under the Program.
    (b) General Approval Criteria.--The Secretary shall approve a State 
to be a participating State, if--
            (1) a specific department, agency, or political subdivision 
        of the State has been designated to implement a State program 
        and participate in the Program;
            (2) all legal actions necessary to enable such designated 
        department, agency, or political subdivision to implement a 
        State program and participate in the Program have been 
        accomplished;
            (3) the State has filed an application with the Secretary 
        for approval of a State capital access program under section 5 
        or approval as a State other credit support program under 
        section 6, in each case within the time period provided in the 
        respective section; and
            (4) the State and the Secretary have executed an allocation 
        agreement that--
                    (A) conforms to the requirements of this Act;
                    (B) ensures that the State program complies with 
                such national standards as are established by the 
                Secretary under section 9(a)(2);
                    (C) sets forth internal control, compliance, and 
                reporting requirements as established by the Secretary, 
                and such other terms and conditions necessary to carry 
                out the purposes of this Act, including an agreement by 
                the State to allow the Secretary to audit State 
                programs;
                    (D) requires that the State program be fully 
                positioned, within 90 days of the State's execution of 
                the allocation agreement with the Secretary, to act on 
                providing the kind of credit support that the State 
                program was established to provide; and
                    (E) includes an agreement by the State to deliver 
                to the Secretary, and update annually, a schedule 
                describing how the State intends to apportion among its 
                State programs the Federal funds allocated to the 
                State.
    (c) Contractual Arrangements for Implementation of State 
Programs.--A State may be approved to be a participating State, and be 
eligible for an allocation of Federal funds under the Program, if the 
State has contractual arrangements for the implementation and 
administration of its State program with--
            (1) an existing, approved State program administered by 
        another State; or
            (2) an authorized agent of, or entity supervised by, the 
        State, including for-profit and not-for-profit entities.
    (d) Special Permission.--
            (1) Circumstances when a municipality may apply directly.--
        If a State does not, within 60 days after the date of enactment 
        of this Act, file with the Secretary a notice of its intent to 
        apply for approval by the Secretary of a State program or 
        within 9 months after the date of enactment of this Act, file 
        with the Secretary a complete application for approval of a 
        State program, the Secretary may grant to municipalities of 
        that State a special permission that will allow them to apply 
        directly to the Secretary without the State for approval to be 
        participating municipalities.
            (2) Timing requirements applicable to municipalities 
        applying directly.--To qualify for the special permission, a 
        municipality of a State must, within 12 months after the date 
        of enactment of this Act, file with the Secretary a complete 
        application for approval by the Secretary of a State program.
            (3) Notices of intent and applications from more than 1 
        municipality.--A municipality of a State may combine with 1 or 
        more other municipalities of that State to file a joint notice 
        of intent to file and a joint application.
            (4) Approval criteria.--The general approval criteria in 
        paragraphs (2) and (4) of section 4(b) will apply.
            (5) Allocation to municipalities.--
                    (A) If more than 3.--If more than 3 municipalities, 
                or combination of municipalities as provided in 
                paragraph (3), of a State apply for approval by the 
                Secretary to be participating municipalities under this 
                subsection, and the applications meet the approval 
                criteria in paragraph (4), the Secretary shall allocate 
                Federal funds to the 3 municipalities with the largest 
                populations.
                    (B) If 3 or fewer.--If 3 or fewer municipalities, 
                or combination of municipalities as provided in 
                paragraph (3), of a State apply for approval by the 
                Secretary to be participating municipalities under this 
                subsection, and the applications meet the approval 
                criteria in paragraph (4), the Secretary shall allocate 
                Federal funds to each applicant municipality or 
                combination of municipalities.
            (6) Apportionment of allocated amount among participating 
        municipalities.--If the Secretary approves municipalities to be 
        participating municipalities under this subsection, the 
        Secretary shall apportion the full amount of the Federal funds 
        that are allocated to that State to municipalities that are 
        approved under this subsection in amounts proportionate to the 
        population of those municipalities, based on the most recent 
        available decennial Census.
            (7) Approving state programs for municipalities.--If the 
        Secretary approves municipalities to be participating 
        municipalities under this subsection, the Secretary shall take 
        into account the additional considerations in section 6(d) in 
        making the determination under section 5 or 6 that the State 
        program or programs to be implemented by the participating 
        municipalities, including a State capital access program, is 
        eligible for Federal contributions to, or for the account of, 
        the State program.

SEC. 5. APPROVING STATE CAPITAL ACCESS PROGRAMS.

    (a) Application.--A participating State that establishes a new, or 
has an existing, State capital access program that meets the 
eligibility criteria in subsection (c) may apply to Secretary to have 
the State capital access program approved as eligible for Federal 
contributions to the reserve fund.
    (b) Approval.--The Secretary shall approve such State capital 
access program as eligible for Federal contributions to the reserve 
fund if--
            (1) within 60 days after the date of enactment of this Act, 
        the State has filed with the Secretary a notice of intent to 
        apply for approval by the Secretary of a State capital access 
        program;
            (2) within 9 months after the date of enactment of this 
        Act, the State has filed with the Secretary a complete 
        application for approval by the Secretary of a capital access 
        program;
            (3) the State satisfies the requirements of subsections (a) 
        and (b) of section 4; and
            (4) the State capital access program meets the eligibility 
        criteria in subsection (c).
    (c) Eligibility Criteria for State Capital Access Programs.--For a 
State capital access program to be approved under this section, it must 
be a program of the State that--
            (1) provides portfolio insurance for business loans based 
        on a separate loan-loss reserve fund for each financial 
        institution;
            (2) requires insurance premiums to be paid by the financial 
        institution lenders and by the business borrowers to the 
        reserve fund to have their loans enrolled in the reserve fund;
            (3) provides for contributions to be made by the State to 
        the reserve fund in amounts at least equal to the sum of the 
        amount of the insurance premium charges paid by the borrower 
        and the financial institution to the reserve fund for any newly 
        enrolled loan; and
            (4) provides its portfolio insurance solely for loans that 
        meet the following requirements:
                    (A) the borrower has 500 employees or less at the 
                time that the loan is enrolled in the Program; and
                    (B) the loan amount does not exceed $5,000,000.
    (d) Federal Contributions to Approved State Capital Access 
Programs.--A State capital access program approved under this section 
will be eligible for receiving Federal contributions to the reserve 
fund in an amount equal to the sum of the amount of the insurance 
premium charges paid by the borrowers and by the financial institution 
to the reserve fund for loans that meet the requirements in subsection 
(c)(4). A participating State may use the Federal contribution to make 
its contribution to the reserve fund of an approved State capital 
access program.
    (e) Minimum Program Requirements for State Capital Access 
Programs.--The Secretary shall, by regulation or other guidance, 
prescribe Program requirements that meet the following minimum 
requirements.
            (1) Experience and capacity.--The participating State shall 
        determine for each financial institution that participates in 
        the State capital access program, after consultation with the 
        appropriate Federal banking agency or, in the case of a 
        financial institution that is a non-depository community 
        development financial institution, the Community Development 
        Financial Institution Fund, that the financial institution has 
        sufficient commercial lending experience and financial and 
        managerial capacity to participate in the approved State 
        capital access program. The determination by the State shall 
        not be reviewable by the Secretary.
            (2) Investment authority.--Subject to applicable State law, 
        the participating State may invest, or cause to be invested, 
        funds held in a reserve fund by establishing a deposit account 
        at the financial institution lender in the name of the 
        participating State. In the event that funds in the reserve 
        fund are not deposited in such an account, such funds shall be 
        invested in a form that the participating State determines is 
        safe and liquid.
            (3) Loan terms and conditions to be determined by 
        agreement.--A loan to be filed for enrollment in an approved 
        State capital access program may be made with such interest 
        rate, fees, and other terms and conditions, and the loan may be 
        enrolled in the approved State capital access program and 
        claims may be filed and paid, as agreed upon by the financial 
        institution lender and the borrower, consistent with applicable 
        law.
            (4) Lender capital at-risk.--A loan to be filed for 
        enrollment in the State capital access program must require the 
        financial institution lender to have a meaningful amount of its 
        own capital resources at risk in the loan.
            (5) Premium charges minimum and maximum amounts.--The 
        insurance premium charges payable to the reserve fund by the 
        borrower and the financial institution lender shall be 
        prescribed by the financial institution lender, within minimum 
        and maximum limits that require that the sum of the insurance 
        premium charges paid in connection with a loan by the borrower 
        and the financial institution lender may not be less than 2 
        percent nor more than 7 percent of the amount of the loan 
        enrolled in the approved State capital access program.
            (6) State contributions.--In enrolling a loan in an 
        approved State capital access program, the participating State 
        may make a contribution to the reserve fund to supplement 
        Federal contributions made under this Program.
            (7) Loan purpose.--
                    (A) Particular loan purpose requirements and 
                prohibitions.--In connection with the filing of a loan 
                for enrollment in an approved State capital access 
                program, the financial institution lender--
                            (i) shall obtain an assurance from each 
                        borrower that--
                                    (I) the proceeds of the loan will 
                                be used for a business purpose;
                                    (II) the loan will not be used to 
                                finance such business activities as the 
                                Secretary, by regulation, may proscribe 
                                as prohibited loan purposes for 
                                enrollment in an approved State capital 
                                access program; and
                                    (III) the borrower is not--
                                            (aa) an executive officer, 
                                        director, or principal 
                                        shareholder of the financial 
                                        institution lender;
                                            (bb) a member of the 
                                        immediate family of an 
                                        executive officer, director, or 
                                        principal shareholder of the 
                                        financial institution lender; 
                                        or
                                            (cc) a related interest of 
                                        any such executive officer, 
                                        director, principal 
                                        shareholder, or member of the 
                                        immediate family;
                            (ii) shall provide assurances to the 
                        participating State that the loan has not been 
                        made in order to place under the protection of 
                        the approved State capital access program prior 
                        debt that is not covered under the approved 
                        State capital access program and that is or was 
                        owed by the borrower to the financial 
                        institution lender or to an affiliate of the 
                        financial institution lender;
                            (iii) shall not allow the enrollment of a 
                        loan to a borrower that is a refinancing of a 
                        loan previously made to that borrower by the 
                        financial institution lender or an affiliate of 
                        the financial institution lender; and
                            (iv) may include additional restrictions on 
                        the eligibility of loans or borrowers that are 
                        not inconsistent with the provisions and 
                        purposes of this Act, including compliance with 
                        all applicable Federal and State laws, 
                        regulations, ordinances, and Executive orders.
                    (B) Definitions.--For purposes of this subsection, 
                the terms ``executive officer'', ``director'', 
                ``principal shareholder'', ``immediate family'', and 
                related interest refer to the same relationship to a 
                financial institution lender as the relationship 
                described in part 215 of title 12 of the Code of 
                Federal Regulations, or any successor to such part.

SEC. 6. APPROVING COLLATERAL SUPPORT AND OTHER INNOVATIVE CREDIT ACCESS 
              AND GUARANTEE INITIATIVES FOR SMALL BUSINESSES AND 
              MANUFACTURERS.

    (a) Application.--A participating State that establishes a new, or 
has an existing, credit support program that meets the eligibility 
criteria in subsection (c) may apply to the Secretary to have the State 
other credit support program approved as eligible for Federal 
contributions to, or for the account of, the State program.
    (b) Approval.--The Secretary shall approve such State other credit 
support program as eligible for Federal contributions to, or for the 
account of, the program if--
            (1) the Secretary determines that the State satisfies the 
        requirements of paragraphs (1) through (3) of subsection 5(b);
            (2) the Secretary determines that the State other credit 
        support program meets the eligibility criteria in subsection 
        (c);
            (3) the Secretary determines the State other credit support 
        program to be eligible based on the additional considerations 
        in subsection (d); and
            (4) within 9 months after the date of enactment of this 
        Act, the State has filed with Treasury a complete application 
        for Treasury approval.
    (c) Eligibility Criteria for State Other Credit Support Programs.--
For a State other credit support program to be approved under this 
section, it must be a program of the State that--
            (1) can demonstrate that, at a minimum, 1 dollar of public 
        investment by the State program will cause and result in 1 
        dollar of new private credit;
            (2) can demonstrate a reasonable expectation that, when 
        considered with all other State programs of the State, such 
        State programs together have the ability to use amounts of new 
        Federal contributions to, or for the account of, all such 
        programs in the State to cause and result in amounts of new 
        small business lending at least 10 times the new Federal 
        contribution amount;
            (3) for those State other credit support programs that 
        provide their credit support through 1 or more financial 
        institution lenders, requires the financial institution lenders 
        to have a meaningful amount of their own capital resources at 
        risk in their small business lending; and
            (4) extends credit support that meets the following 
        requirements:
                    (A) targets an average borrower size of 500 
                employees or less;
                    (B) does not extend credit support to borrowers 
                that have more than 750 employees;
                    (C) targets support towards loans with an average 
                principal amount of $5,000,000 or less; and
                    (D) does not extend credit support to loans that 
                exceed a principal amount of $20,000,000.
    (d) Additional Considerations.--In making a determination that a 
State other credit support program is eligible for Federal 
contributions to, or for the account of, the State program, the 
Secretary shall take into account the following additional 
considerations:
            (1) the anticipated benefits to the State, its businesses, 
        and its residents to be derived from the Federal contributions 
        to, or for the account of, the approved State other credit 
        support program, including the extent to which resulting small 
        business lending will expand economic opportunities;
            (2) the operational capacity, skills, and experience of the 
        management team of the State other credit support program;
            (3) the capacity of the State other credit support program 
        to manage increases in the volume of its small business 
        lending;
            (4) the internal accounting and administrative controls 
        systems of the State other credit support program, and the 
        extent to which they can provide reasonable assurance that 
        funds of the State program are safeguarded against waste, loss, 
        unauthorized use, or misappropriation; and
            (5) the soundness of the program design and implementation 
        plan of the State other credit support program.
    (e) Federal Contributions to Approved State Other Credit Support 
Programs.--A State other credit support program approved under this 
section will be eligible for receiving Federal contributions to, or for 
the account of, the State program in an amount consistent with the 
schedule describing the apportionment of allocated Federal funds among 
State programs delivered by the State to the Secretary under the 
allocation agreement.
    (f) Minimum Program Requirements for State Other Credit Support 
Programs.--
            (1) Fund to prescribe.--The Secretary shall, by regulation 
        or other guidance, prescribe Program requirements for approved 
        State other credit support programs.
            (2) Considerations for fund.--In prescribing minimum 
        Program requirements for approved State other credit support 
        programs, the Secretary shall take into consideration, to the 
        extent the Secretary determines applicable and appropriate, the 
        minimum Program requirements for approved State capital access 
        programs in section 5(e).

SEC. 7. REPORTS.

    (a) Quarterly Use-of-Funds Report.--
            (1) In general.--Not later than 30 days after the beginning 
        of each calendar quarter, beginning after the first full 
        calendar quarter to occur after the date the Secretary approves 
        a State for participation, the participating State shall submit 
        to the Secretary a report on the use of Federal funding by the 
        participating State during the previous calendar quarter.
            (2) Report contents.--The report shall--
                    (A) indicate the total amount of Federal funding 
                used by the participating State;
                    (B) include a certification by the participating 
                State that--
                            (i) the information provided in accordance 
                        with subparagraph (A) is accurate;
                            (ii) funds continue to be available and 
                        legally committed to contributions by the State 
                        to, or for the account of, approved State 
                        programs, less any amount that has been 
                        contributed by the State to, or for the account 
                        of, approved State programs subsequent to the 
                        State being approved for participation in the 
                        Program; and
                            (iii) the participating State is 
                        implementing its approved State program or 
                        programs in accordance with this Act and 
                        regulations issued pursuant to section 10.
    (b) Annual Report.--Not later than March 31 of each year, beginning 
March 31, 2011, each participating State shall submit to the Secretary 
an annual report that shall include the following information:
            (1) The number of borrowers that received new loans 
        originated under the approved State program or programs after 
        the State program was approved as eligible for Federal 
        contributions.
            (2) The total amount of such new loans.
            (3) Breakdowns by industry type, loan size, annual sales, 
        and number of employees of the borrowers that received such new 
        loans.
            (4) The zip code of each borrower that received such a new 
        loan.
            (5) Such other data that the Secretary, in the Secretary's 
        sole discretion, may require to carry out the purposes of the 
        Program.
    (c) Form.--The reports and data filed pursuant to subsections (a) 
and (b) shall be in such form as the Secretary, in the Secretary's sole 
discretion, may require.
    (d) Termination of Reporting Requirements.--The requirement to 
submit reports under subsections (a) and (b) shall terminate for a 
participating State with the submission of the completed reports due on 
the first March 31 to occur after 5 complete 12-month periods after the 
State is approved by the Secretary to be a participating State.

SEC. 8. REMEDIES FOR STATE PROGRAM TERMINATION OR FAILURES.

    (a) Remedies.--
            (1) In general.--If any of the events listed in paragraph 
        (2) occur, the Secretary, in the Secretary's discretion, may--
                    (A) reduce the amount of Federal funds allocated to 
                the State under the Program; or
                    (B) terminate any further transfers of allocated 
                amounts that have not yet been transferred to the 
                State.
            (2) Causal events.--The events referred to in paragraph (1) 
        are--
                    (A) termination by a participating State of its 
                participation in the Program;
                    (B) failure on the part of a participating State to 
                submit complete reports under section 7 on a timely 
                basis; or
                    (C) noncompliance by the State with the terms of 
                the allocation agreement between the Secretary and the 
                State.
    (b) De-Allocated Amounts To Be Re-Allocated.--If, after 13 months, 
any portion of the amount of Federal funds allocated to a participating 
State is deemed by the Secretary to be no longer allocated to the State 
after actions taken by the Secretary under subsection (a)(1), the 
Secretary shall re-allocate that portion among the participating 
States, excluding the State whose allocated funds were deemed to be no 
longer allocated, as provided in section 3(b).

SEC. 9. IMPLEMENTATION AND ADMINISTRATION.

    (a) General Authorities and Duties.--The Secretary shall--
            (1) consult with the Administrator of the Small Business 
        Administration and the appropriate Federal banking agencies on 
        the administration of the Program;
            (2) establish minimum national standards for approved State 
        programs;
            (3) provide technical assistance to States for starting 
        State programs and generally disseminate best practices;
            (4) manage, administer, and perform necessary program 
        integrity functions for the Program; and
            (5) ensure adequate oversight of the approved State 
        programs, including oversight of the cash flows, performance, 
        and compliance of each approved State program.
    (b) Funding.--There are hereby appropriated to the Secretary, out 
of funds in the Treasury not otherwise appropriated, $2,000,000,000 to 
carry out the Program, including to pay reasonable costs of 
administering the Program. In administering the Program, the Secretary 
is authorized to use the staff and resources of the Department.
    (c) Expedited Contracting.--During the 1-year period beginning on 
the date of enactment of this Act, the Secretary may enter into 
contracts without regard to any other provision of law regarding public 
contracts, for purposes of carrying out this Act.
    (d) Termination of Secretary's Program Administration Functions.--
The authorities and duties of the Secretary to implement and administer 
the Program shall terminate at the end of the 7-year period beginning 
on the date of enactment of this Act.

SEC. 10. REGULATIONS.

    The Secretary, in consultation with the Administrator of the Small 
Business Administration, shall issue such regulations and other 
guidance as Secretary determines necessary or appropriate to implement 
this Act including, but not limited to, to define terms, to establish 
compliance and reporting requirements, and such other terms and 
conditions necessary to carry out the purposes of this Act.
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