Small Business Access to Capital Act of 2016

To help small businesses access capital and create jobs by reauthorizing the successful State Small Business Credit Initiative. 1. Short title This Act may be cited as the Small Business Access to Capital Act of 2016 2. New tranches of capital for successful State programs Section 3003 of the Small Business Jobs Act of 2010 ( 12 U.S.C. 5702 (d) Additional allocation and competitive awards (1) Definitions In this subsection— (A) the term eligible participating State 1/3 (B) the term unused funds (i) amounts made available to the Secretary under clause (i)(II) or (ii)(II) of paragraph (2)(E); and (ii) amounts made available to the Secretary under paragraph (4)(B)(ii). (2) Allocation for 2010 participating States (A) Allocation Of the amount made available under paragraph (6)(D), the Secretary shall allocate a total of $500,000,000 among eligible participating States in the same ratio as funds were allocated under the 2010 allocation under subsection (b)(1) among participating States. (B) Application An eligible participating State desiring to receive funds allocated under this paragraph shall submit an application— (i) not later than the date that is 6 months after the date of enactment of the Small Business Access to Capital Act of 2016; and (ii) in such manner and containing such information as the Secretary may require. (C) Availability of allocated amount Notwithstanding subsection (c)(1), after an eligible participating State approved by the Secretary to receive an allocation under this paragraph has certified to the Secretary that the eligible participating State has expended, transferred, or obligated not less than 80 percent of the last 1/3 (D) Use of transferred funds An eligible participating State may use funds transferred under this paragraph for any purpose authorized under subparagraph (A) or (B) of subsection (c)(3). (E) Termination of availability of amounts (i) In general If an eligible participating State has not certified to the Secretary that the State has expended, transferred, or obligated not less than 80 percent of the last 1/3 (I) may not be transferred to the eligible participating State under this paragraph; and (II) shall be available to the Secretary to make awards under paragraph (4). (ii) Other amounts Effective on the date that is 2 years after the date of enactment of the Small Business Access to Capital Act of 2016 (I) may not be transferred to an eligible participating State under this paragraph; and (II) shall be available to the Secretary to make awards under paragraph (4). (3) Competitive funding (A) In general Of the amount made available under paragraph (6)(D), the Secretary may award, on a competitive basis, not more than a total of $1,000,000,000 to participating States and consortiums of participating States for use for any purpose authorized under subparagraph (A) or (B) of subsection (c)(3). (B) Application (i) In general A participating State or consortium of participating States desiring to receive an award under this paragraph shall submit an application— (I) not later than the date established by the Secretary, which shall be not later than the date that is 1 year after the date of enactment of the Small Business Access to Capital Act of 2016 (II) in such manner and containing such information as the Secretary may require. (ii) Number of applications A participating State may submit not more than 1 application on behalf of the participating State and not more than 1 application as part of a consortium of participating States. (iii) States that did not participate A State that is not a participating State may apply to the Secretary for approval to be a participating State for purposes of this paragraph and paragraph (4), in accordance with section 3004. (C) Factors In determining whether to make an award to a participating State or consortium of participating States under this paragraph, the Secretary shall consider— (i) how the participating State or consortium of participating States plan to use amounts provided under the award under the approved State program to— (I) leverage private sector capital; (II) create and retain jobs during the 2-year period beginning on the date of the award; (III) serve small businesses that have been incorporated or in operation for not more than 5 years; (IV) serve low- or moderate-income communities; and (V) serve minority- and women-owned small businesses; (ii) the extent to which the participating State or consortium of participating States will establish or continue a robust self-evaluation of the activities of the participating State or consortium of participating States using amounts made available under this title; (iii) the extent to which the participating State or consortium of participating States will provide non-Federal funds in excess of the amount required under subparagraph (E); and (iv) the extent to which the participating State expended, obligated, or transferred the 2010 allocation to the State. (D) Award of funds (i) First tranche Notwithstanding subsection (c)(1), and not later than 30 days after making an award under this paragraph to a participating State or consortium of participating States, the Secretary shall transfer 50 percent of the amount of the award to the participating State or consortium of participating States. (ii) Second tranche After a participating State or consortium of participating States has certified to the Secretary that the participating State or consortium of participating States has expended, transferred, or obligated not less than 80 percent of the amount transferred under clause (i), the Secretary shall transfer to the participating State or consortium of participating States the remaining amount of the award. (E) State share The State share of the cost of the activities, excluding administrative expenses, carried out using an award under this paragraph shall be not less than 10 percent. The Secretary may determine what contributions by a State qualify as part of the State share of the cost for purposes of this subparagraph. (4) Award of unused funds (A) In general The Secretary may award, on a competitive basis, unused funds to participating States for use for any purpose authorized under subparagraph (A) or (B) of subsection (c)(3). (B) Unused 2010 funds (i) In general The Secretary shall determine whether any amounts allocated to a participating State under subsection (b) shall be deemed no longer allocated and no longer available if a participating State has not certified to the Secretary that the State has expended, transferred, or obligated 80 percent of the second 1/3 (ii) Availability Effective on the date of the determination under clause (i), any amounts identified in the determination that were deemed no longer allocated and no longer available to the participating State shall be available to the Secretary to make awards under this paragraph. (C) Application A participating State desiring to receive an award under this paragraph shall submit an application— (i) not later than 3 months after the date on which funds are deemed no longer allocated and no longer available to any participating State; and (ii) in such manner and containing such information as the Secretary may require. (D) Factors In determining whether to make an award to a participating State under this paragraph, the Secretary shall consider the factors described in paragraph (3)(C). (E) Minimum amount The Secretary may not make an award of less than $5,000,000 under this paragraph. (5) Extension of compliance and reporting Notwithstanding section 3007(d), a participating State that receives funds under paragraph (2), (3), or (4) shall submit quarterly and annual reports containing the information described in section 3007 until the end of the 8-year period beginning on the date of enactment of the Small Business Access to Capital Act of 2016 (6) Administration and implementation (A) Administrative expenses for participating States A participating State may use not more than 3 percent of the amount made available to the participating State under paragraph (2), (3), or (4) for administrative expenses incurred by the participating State in implementing an approved State program. (B) Contracting During the 1-year period beginning on the date of enactment of the Small Business Access to Capital Act of 2016 (C) Amounts not assistance Any amounts transferred to a participating State under paragraph (2), (3), or (4) shall not be considered assistance for purposes of subtitle V of title 31, United States Code. (D) Appropriation There are appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, $1,500,000,000 to carry out this subsection, including to pay reasonable costs of administering the programs under this subsection, to remain available until expended. (E) Termination of secretary’s program administration functions The authorities and duties of the Secretary to implement and administer the program under this subsection shall terminate at the end of the 8-year period beginning on the date of enactment of the Small Business Access to Capital Act of 2016 . 3. Improvements to the State Small Business Credit Initiative The State Small Business Credit Initiative Act of 2010 ( 12 U.S.C. 5701 et seq. (1) in section 3002, by adding at the end the following: (15) Depository institution The term depository institution (A) a depository institution, as defined under section 3 of the Federal Deposit Insurance Act; and (B) a State credit union and a Federal credit union, as such terms are defined, respectively, under section 101 of the Federal Credit Union Act. (16) Minority The term minority (17) Minority-owned small business The term minority-owned small business (A) more than 50 percent of the ownership or control of which is held by one or more minority individuals; and (B) more than 50 percent of the net profit or loss of which accrues to one or more minority individuals. (18) Minority-owned depository institution The term minority-owned depository institution (A) in the case of a privately owned institution, 51 percent or more of such institution is owned by one or more socially and economically disadvantaged individuals; (B) in the case of a publicly owned institution, 51 percent or more of the stock of such institution is owned by one or more socially and economically disadvantaged individuals; and (C) in the case of a mutual institution— (i) the board of directors and account holders of such institution are predominantly minority; and (ii) the community which the institution services is predominantly minority. (19) Women-owned small business The term women-owned small business (A) more than 50 percent of the ownership or control of which is held by one or more women; and (B) more than 50 percent of the net profit or loss of which accrues to one or more women. ; (2) in section 3005(e)(8)— (A) by striking , including and (B) by adding at the end the following: The Secretary may not approve any State capital access program that fails to include a plan that promotes a fair share of the Federal contributions to be used to strengthen and increase economic opportunities for small businesses in low- and moderate-income, minority, and other underserved communities and women- and minority-owned small businesses. (3) in section 3006(d) is amended by adding at the end the following: (6) The extent to which the State plans to use the Federal contributions to provide access to capital for small businesses in low- and moderate-income, minority, and other underserved communities and to women- and minority-owned small businesses, and the extent to which resulting small business lending will expand economic opportunities for such communities and such businesses. ; (4) in section 3007(b)— (A) in paragraph (4), by striking of each borrower that received such a new loan in which the borrower is headquartered and zip codes in which the borrower maintains significant operations (B) by adding at the end the following: (6) The race, ethnicity, and sex of the principal owners of the borrowers and applicants, the number of applications and the date on which each application was received, the loan or type of investment being applied for, and the number of loans or applications that were approved and the date of such approval. In compiling and reporting the information required under this paragraph, a State may modify data which is or will be available to the public, if the State determines that the deletion or modification of the data is necessary to protect the privacy interest of the borrower or applicant. (7) A summary of the extent to which the approved State program increased economic opportunities for small businesses in low- and moderate-income, minority, and other underserved communities and women- and minority-owned small businesses, consistent with the plan delivered by the State pursuant to section 3005(e)(8). (8) The number of loans or investments by program type made by minority-owned depository institutions. ; (5) in section 3009(a)— (A) by amending paragraph (1) to read as follows: (1) consult with the Director of the Office of Minority and Women Inclusion of the Departmental Offices of the Department of the Treasury, the Administrator of the Small Business Administration, and the head of each of the appropriate Federal banking agencies (who shall each consult with the Director of the Office of Minority and Women Inclusion of their agency), on the administration of the Program; ; and (B) in paragraph (5), by inserting after performance, efforts to expand economic opportunity for minority- and women-owned small businesses, (6) in section 3010— (A) by inserting after in consultation with the Director of the Office of Minority and Women Inclusion of the Departmental Offices of the Department of the Treasury and (B) by adding at the end the following: In issuing such regulations the Secretary shall seek public input from community, civil rights, consumer advocates, small business advocates, and other interested or affected parties.

Summary: Small Business Access to Capital Act of 2016 This bill amends the Small Business Jobs Act of 2010 to extend for an additional eight fiscal years the State Small Business Credit Initiative to assist participating states to give collateral support and other innovative credit access and guarantee initiatives for small business concerns and manufacturers. The bill prescribes allocations of federal funds to participating states. Treasury may award, on a competitive basis, up to a total of $1 billion in two tranches, according to specified criteria, to participating states and consortiums of participating states for use: (1) for making federal contributions to, or for the account of, an approved state program; or (2) as collateral for a qualifying loan or swap funding facility. The State Small Business Credit Initiative Act of 2010 is amended to revise minimum program requirements for state capital access programs. Treasury may not approve any state capital access program that fails to include a plan that promotes a fair share of federal contributions to be used to strengthen and increase economic opportunities for small business concerns in low-and moderate-income, minority, and other underserved communities and women- and minority-owned small business concerns. 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, Treasury shall take into account the extent to which the state plans to use these contributions to provide access to capital for small business concerns in low- and moderate-income, minority, and other underserved communities and to women- and minority-owned small businesses, and the extent to which resulting small business lending will expand economic opportunities for such communities and such concerns. The bill revises the mandatory contents of each participating state's annual report to Treasury on its capital access program. Treasury shall: consult with the Office of Minority and Women Inclusion (OMWI) of the Departmental Offices of Treasury, among others, on the administration of the state capital access program; and ensure adequate oversight of the approved state programs to ensure efforts to expand economic opportunity for minority- and women-owned small business concerns. Treasury shall also: consult with the OMWI in issuing such regulations and other guidance to implement the Act; and in issuing these regulations, seek public input from community, civil rights, consumer advocates, small business advocates, and other interested or affected parties.