111TH CONGRESS 
2D SESSION 
H. R. 5297 
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 incen-
tives for small business job creation, and for other pur-
poses.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This title may be cited as the 
‘‘Small Business Jobs and Credit Act of 2010’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
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.
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 ex-
cluded 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.
TITLE I—SMALL BUSINESS 
LENDING FUND 
SEC. 101. PURPOSE. 
The purpose of this title is to address the ongoing 
effects of the financial crisis on small businesses by pro-
viding temporary authority to the Secretary of the Treas-
ury to make capital investments in eligible institutions in 
order to increase the availability of credit for small busi-
nesses. 
SEC. 102. DEFINITIONS. 
For purposes of this title: 
(1) 
APPROPRIATE
COMMITTEES
OF
CON-
GRESS.—The term ‘‘appropriate committees of Con-
gress’’ means— 
(A) the Committee on Small Business and 
Entrepreneurship, the Committee on Agri-
culture, Nutrition, and Forestry, the Committee 
on Banking, Housing, and Urban Affairs, the 
Committee on Finance, the Committee on the 
Budget, and the Committee on Appropriations 
of the Senate; and 
(B) the Committee on Small Business, the 
Committee on Agriculture, the Committee on 
Financial Services, the Committee on Ways and 
Means, the Committee on the Budget, and the
Committee on Appropriations of the House of 
Representatives. 
(2) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’ has the meaning given such term under section 
3(q) of the Federal Deposit Insurance Act (12 
U.S.C. 1813(q)). 
(3) BANK
HOLDING
COMPANY.—The term 
‘‘bank holding company’’ has the meaning given 
such term under section 2(a)(1) of the Bank Hold-
ing 
Company 
Act 
of 
1956 
(12 
U.S.C. 
1841(2)(a)(1)). 
(4) CALL
REPORT.—The term ‘‘call report’’ 
means— 
(A) reports of Condition and Income sub-
mitted to the Office of the Comptroller of the 
Currency, the Board of Governors of the Fed-
eral Reserve System, and the Federal Deposit 
Insurance Corporation; 
(B) the Office of Thrift Supervision Thrift 
Financial Report; 
(C) any report that is designated by the 
Office of the Comptroller of the Currency, the 
Board of Governors of the Federal Reserve Sys-
tem, the Federal Deposit Insurance Corpora-
tion, or the Office of Thrift Supervision, as ap-
plicable, as a successor to any report referred to 
in subparagraph (A) or (B); 
(D) standard reports of Condition and In-
come submitted by Community Development 
Financial Institution loan funds to the Commu-
nity Development Financial Institutions Fund; 
and 
(E) with respect to an eligible institution 
for which no report exists that is described 
under subparagraph (A), (B), or (C), such 
other report or set of information as the Sec-
retary, in consultation with the Administrator 
of the Small Business Administration, may pre-
scribe. 
(5) CDCI.—The term ‘‘CDCI’’ means the Com-
munity Development Capital Initiative created by 
the Secretary under the Troubled Asset Relief Pro-
gram established by the Emergency Economic Sta-
bilization Act of 2008. 
(6) CDCI INVESTMENT.—The term ‘‘CDCI in-
vestment’’ means, with respect to any eligible insti-
tution, the principal amount of any investment made 
by the Secretary in such eligible institution under 
the CDCI that has not been repaid.
(7) CPP.—The term ‘‘CPP’’ means the Capital 
Purchase Program created by the Secretary under 
the Troubled Asset Relief Program established by 
the Emergency Economic Stabilization Act of 2008. 
(8) CPP INVESTMENT.—The term ‘‘CPP in-
vestment’’ means, with respect to any eligible insti-
tution, the principal amount of any investment made 
by the Secretary in such eligible institution under 
the CPP that has not been repaid. 
(9) ELIGIBLE INSTITUTION.—The term ‘‘eligi-
ble institution’’ means— 
(A) any insured depository institution, 
which— 
(i) is not controlled by a bank holding 
company or savings and loan holding com-
pany that is also an eligible institution; 
(ii) has total assets of equal to or less 
than $10,000,000,000, as reported in the 
call report as of the end of the fourth 
quarter of calendar year 2009; and 
(iii) is not directly or indirectly con-
trolled by any company or other entity that 
has total consolidated assets of more than 
$10,000,000,000, as so reported;
(B) any bank holding company which has 
total consolidated assets of equal to or less than 
$10,000,000,000; 
(C) any savings and loan holding company 
which has total consolidated assets of equal to 
or less than $10,000,000,000; 
(D) any community development financial 
institution loan fund which has total assets of 
equal to or less than $10,000,000,000; and 
(E) any small business lending company 
that has total assets of equal to or less than 
$10,000,000,000. 
(10) FUND.—The term ‘‘Fund’’ means the 
Small Business Lending Fund established by section 
4(a)(1) of this title. 
(11) INSURED DEPOSITORY INSTITUTION.—The 
term ‘‘insured depository institution’’ has the mean-
ing given such term under section 3(c)(2) of the 
Federal 
Deposit 
Insurance 
Act 
(12 
U.S.C. 
1813(c)(2)). 
(12) PROGRAM.—The term ‘‘Program’’ means 
the Small Business Lending Fund Program author-
ized by section 4(a)(2) of this title. 
(13) SAVINGS AND LOAN HOLDING COMPANY.— 
The term ‘‘savings and loan holding company’’ has
the meaning given such term under section 
10(a)(1)(D) of the Home Owners’ Loan Act (12 
U.S.C. 1467a(a)(1)(D)). 
(14) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of the Treasury. 
(15) SMALL BUSINESS LENDING.— 
(A) IN GENERAL.—The term ‘‘small busi-
ness lending’’ means small business lending, as 
defined by and reported in an eligible institu-
tion’s quarterly call report, where each loan 
comprising such lending is made to a small 
business and is one of the following types: 
(i) Commercial and industrial loans. 
(ii) Owner-occupied nonfarm, nonresi-
dential real estate loans. 
(iii) Loans to finance agricultural pro-
duction and other loans to farmers. 
(iv) Loans secured by farmland. 
(v) 
Nonowner-occupied 
commercial 
real estate loans. 
(vi) CONSTRUCTION, LAND DEVELOP-
MENT, AND OTHER LAND LOANS.— 
(I) IN GENERAL.—Loans secured 
by real estate—
(aa) that are made to fi-
nance— 
(AA) land development 
that is preparatory to erect-
ing new structures, includ-
ing improving land, laying 
sewers, and laying water 
pipes; or 
(BB) the on-site con-
struction of industrial, com-
mercial, residential, or farm 
buildings; 
(bb) that is vacant land, ex-
cept land known to be used or 
usable for agricultural purposes, 
such as crop and livestock pro-
duction; 
(cc) the proceeds of which 
are to be used to acquire and im-
prove developed or undeveloped 
property; or 
(dd) that are made under 
title I or title X of the National 
Housing Act.
(II) CONSTRUCTION
INDUSTRY 
REQUIREMENT.—Subclause (I) shall 
only apply to loans that are extended 
to small business concerns in the con-
struction industry, as such term is de-
fined by the Secretary in consultation 
with the Administrator of the Small 
Business Administration. 
(III) CONSTRUCTION DEFINED.— 
For purposes of this clause, the term 
‘‘construction’’ includes the construc-
tion of new structures, additions or al-
terations to existing structures, and 
the demolition of existing structures 
to make way for new structures. 
(B) TREATMENT
OF
HOLDING
COMPA-
NIES.—In the case of eligible institutions that 
are bank holding companies or savings and loan 
holding companies having one or more insured 
depository institution subsidiaries, small busi-
ness lending shall be measured based on the 
combined small business lending reported in the 
call report of the insured depository institution 
subsidiaries.
(16) MINORITY-OWNED
AND
WOMEN-OWNED 
BUSINESS.—The terms ‘‘minority-owned business’’ 
and ‘‘women-owned business’’ shall have the mean-
ing given the terms ‘‘minority-owned business’’ and 
‘‘women’s business’’, respectively, under section 
21A(r)(4) of the Federal Home Loan Bank Act (12 
U.S.C. 1441A(r)(4)). 
(17) CDFI; COMMUNITY DEVELOPMENT FINAN-
CIAL INSTITUTION.—The terms ‘‘CDFI’’ and ‘‘com-
munity development financial institution’’ have the 
meaning given the term ‘‘community development fi-
nancial institution’’ under the Riegle Community 
Development and Regulatory Improvement Act of 
1994. 
(18) CDLF; COMMUNITY DEVELOPMENT LOAN 
FUND.—The terms ‘‘CDLF’’ and ‘‘community devel-
opment loan fund’’ mean any entity that— 
(A) is certified by the Department of the 
Treasury as a community development financial 
institution loan fund; 
(B) is exempt from taxation under the In-
ternal Revenue Code of 1986; and 
(C) has assets under $10,000,000,000 as 
of the fourth quarter of calendar year 2009.
(19) SMALL BUSINESS.—The term ‘‘small busi-
ness’’ has the meaning given the term ‘‘small busi-
ness concern’’ under section 3 of the Small Business 
Act (15 U.S.C. 632). 
(20) SMALL
BUSINESS
LENDING
COMPANY.— 
The term ‘‘small business lending company’’ has the 
meaning given such term under section 3(r)(1) of 
the Small Business Act (15 U.S.C. 632(r)(1)). 
(21) VETERAN-OWNED BUSINESS.— 
(A) The term ‘‘veteran-owned business’’ 
means a business— 
(i) more than 50 percent of the own-
ership or control of which is held by 1 or 
more veterans; 
(ii) more than 50 percent of the net 
profit or loss of which accrues to 1 or more 
veterans; and 
(iii) a significant percentage of senior 
management positions of which are held by 
veterans. 
(B) For purposes of this paragraph, the 
term ‘‘veteran’’ has the meaning given such 
term in section 101(2) of title 38, United 
States Code.
SEC. 103. SMALL BUSINESS LENDING FUND. 
(a) FUND AND PROGRAM.— 
(1) FUND ESTABLISHED.—There is established 
in the Treasury of the United States a fund to be 
known as the ‘‘Small Business Lending Fund’’, 
which shall be administered by the Secretary. 
(2) PROGRAMS AUTHORIZED.—The Secretary is 
authorized to establish the Small Business Lending 
Fund Program for using the Fund consistent with 
this title. 
(b) USE OF FUND.— 
(1) IN GENERAL.—Subject to paragraph (2), 
the Fund shall be available to the Secretary, without 
further appropriation or fiscal year limitation, for 
the costs of purchases (including commitments to 
purchase), and modifications of such purchases, of 
preferred stock and other financial instruments from 
eligible institutions on such terms and conditions as 
are determined by the Secretary in accordance with 
this title. For purposes of this paragraph and with 
respect to an eligible institution, the term ‘‘other fi-
nancial instruments’’ shall include only debt instru-
ments for which such eligible institution is fully lia-
ble or equity equivalent capital of the eligible institu-
tion. Such debt instruments may be subordinated to
the claims of other creditors of the eligible institu-
tion. 
(2) MAXIMUM
PURCHASE
LIMIT.—The aggre-
gate amount of purchases (and commitments to pur-
chase) made pursuant to paragraph (1) may not ex-
ceed $30,000,000,000. 
(3) PROCEEDS
USED
TO
PAY
DOWN
PUBLIC 
DEBT.—All funds received by the Secretary in con-
nection with purchases made pursuant to paragraph 
(1), including interest payments, dividend payments, 
and proceeds from the sale of any financial instru-
ment, shall be paid into the general fund of the 
Treasury for reduction of the public debt. 
(4) 
LIMITATION
ON
PURCHASES
FROM 
CDLFS.— 
(A) IN GENERAL.—Not more than 1 per-
cent of the value of purchases made by the Sec-
retary in carrying out the Program may be 
used to make purchases from community devel-
opment loan funds. 
(B) ELIGIBILITY
STANDARDS.—The Sec-
retary, in consultation with the Community De-
velopment Financial Institutions Fund, shall 
develop eligibility criteria to determine the fi-
nancial ability of a CDLF to participate in the
sured depository institution subsidiaries as of 
the end of the fourth quarter of calendar year 
2009 and risk-weighted assets shall be meas-
ured based on the combined risk-weighted as-
sets of the insured depository institution sub-
sidiaries as reported in the call report imme-
diately preceding the date of application. 
(D) TREATMENT
OF
APPLICANTS
THAT 
ARE INSTITUTIONS CONTROLLED BY HOLDING 
COMPANIES.—If an eligible institution that ap-
plies to receive a capital investment under the 
Program is under the control of a bank holding 
company or a savings and loan holding com-
pany, then the Secretary may use the Fund to 
purchase preferred stock or other financial in-
struments from the top-tier bank holding com-
pany or savings and loan holding company of 
such eligible institution, as applicable. For pur-
poses of this paragraph, the term ‘‘control’’ 
with respect to a bank holding company shall 
have the same meaning as in section 2(a)(2) of 
the Bank Holding Company Act of 1956 (12 
U.S.C. 1841(2)(a)(2)). For purposes of this 
paragraph, the term ‘‘control’’ with respect to a 
savings and loan holding company shall have
the same meaning as in 10(a)(2) of the Home 
Owners’ Loan Act (12 U.S.C. 1467a(a)(2)). 
(E) REQUIREMENT TO PROVIDE A SMALL 
BUSINESS LENDING PLAN.—At the time that an 
applicant submits an application to the Sec-
retary for a capital investment under the Pro-
gram, the applicant shall deliver to the appro-
priate Federal banking agency and, for appli-
cants that are State-chartered banks, to the ap-
propriate State banking regulator, a small busi-
ness lending plan describing how the applicant’s 
business strategy and operating goals will allow 
it to address the needs of small businesses in 
the areas it serves, as well as a plan to provide 
linguistically and culturally appropriate out-
reach, where appropriate. This plan shall be 
confidential supervisory information. 
(F) TREATMENT
OF
APPLICANTS
THAT 
ARE
COMMUNITY
DEVELOPMENT
LOAN 
FUNDS.—Eligible institutions that are commu-
nity development loan funds may apply to re-
ceive a capital investment from the Fund in an 
amount not exceeding 10 percent of total as-
sets, as reported in the call report immediately 
preceding the date of application.
(G) ELECTION TO INCLUDE OTHER NON-
FARM, NONRESIDENTIAL REAL ESTATE LOANS 
IN AMOUNT OF SMALL BUSINESS LENDING.—At 
the time that an applicant submits an applica-
tion to the Secretary for a capital investment 
under the Program, the applicant may notify 
the Secretary that it elects to have included in 
the determination of the amount of its small 
business lending, for purposes of the computa-
tions made under paragraph (4), the amount of 
lending reported as other nonfarm, nonresiden-
tial real estate loans in its quarterly call report, 
but for purposes of this subparagraph, other 
nonfarm, nonresidential real estate loans shall 
not include a loan having an original amount 
greater than $10,000,000. If an applicant 
makes the election under this subparagraph, the 
amount of lending reported as other nonfarm, 
nonresidential real estate loans shall be in-
cluded in the determination of the amount of its 
small business lending for purposes of the com-
putations made under paragraph (4). 
(2) CONSULTATION
WITH
REGULATORS.—For 
each eligible institution that applies to receive a cap-
ital investment under the Program, the Secretary 
shall— 
(A) consult with the appropriate Federal 
banking agency or, in the case of an eligible in-
stitution that is a non-depository community 
development financial institution, the Commu-
nity Development Financial Institution Fund, 
for the eligible institution to determine whether 
the eligible institution may receive such capital 
investment; 
(B) in the case of an eligible institution 
that is a State-chartered bank, consider any 
views received from the State banking regulator 
of the State of the eligible institution regarding 
the financial condition of the eligible institution; 
and 
(C) in the case of a community develop-
ment financial institution loan fund, consult 
with the Community Development Financial In-
stitution Fund. 
(3) INELIGIBILITY OF INSTITUTIONS ON FDIC 
PROBLEM BANK LIST.— 
(A) IN GENERAL.—An eligible institution 
may not receive any capital investment under 
the Program if—
(i) such institution is on the FDIC 
problem bank list; or 
(ii) such institution has been removed 
from the FDIC problem bank list for less 
than 90 days. 
(B) CONSTRUCTION.—Nothing in subpara-
graph (A) shall be construed as limiting the dis-
cretion of the Secretary to deny the application 
of an eligible institution that is not on the 
FDIC problem bank list. 
(C) FDIC 
PROBLEM
BANK
LIST
DE-
FINED.—For purposes of this subparagraph, 
the term ‘‘FDIC problem bank list’’ means the 
list of institutions with a current rating of 4 or 
5 under the Uniform Financial Institutions 
Rating System, or such other list designated by 
the Federal Deposit Insurance Corporation. 
(4) INCENTIVES TO LEND.— 
(A) 
REQUIREMENTS
ON
PREFERRED 
STOCK
AND
OTHER
FINANCIAL
INSTRU-
MENTS.—Any preferred stock or other financial 
instrument issued to Treasury by an eligible in-
stitution receiving a capital investment under 
the Program shall provide that—
(i) the rate at which dividends or in-
terest are payable shall be 5 percent per 
annum initially; 
(ii) within the first 2 years after the 
date of the capital investment under the 
Program, the rate may be adjusted based 
on the amount of an eligible institution’s 
small business lending. Changes in the 
amount of small business lending shall be 
measured against the average amount of 
small business lending reported by the eli-
gible institution in its call reports for the 
4 full quarters immediately preceding the 
enactment of this title, minus adjustments 
from each quarterly balance in respect 
of— 
(I) net loan charge offs with re-
spect to small business lending; and 
(II) gains realized by the eligible 
institution resulting from mergers, ac-
quisitions or purchases of loans after 
origination and syndication; which ad-
justments shall be determined in ac-
cordance with guidance promulgated 
by the Secretary; and
(iii) during any calendar quarter dur-
ing the initial 2-year period referred to in 
clause (ii), an institution’s rate shall be ad-
justed to reflect the following schedule, 
based on that institution’s change in the 
amount of small business lending relative 
to the baseline— 
(I) if the amount of small busi-
ness lending has increased by less 
than 2.5 percent, the dividend or in-
terest rate shall be 5 percent; 
(II) if the amount of small busi-
ness lending has increased by 2.5 per-
cent or greater, but by less than 5.0 
percent, the dividend or interest rate 
shall be 4 percent; 
(III) if the amount of small busi-
ness lending has increased by 5.0 per-
cent or greater, but by less than 7.5 
percent, the dividend or interest rate 
shall be 3 percent; 
(IV) if the amount of small busi-
ness lending has increased by 7.5 per-
cent or greater, and but by less than
10.0 percent, the dividend or interest 
rate shall be 2 percent; or 
(V) if the amount of small busi-
ness lending has increased by 10 per-
cent or greater, the dividend or inter-
est rate shall be 1 percent. 
(B) BASIS OF INITIAL RATE.—The initial 
dividend or interest rate shall be based on call 
report data published in the quarter imme-
diately preceding the date of the capital invest-
ment under the Program. 
(C) TIMING OF RATE ADJUSTMENTS.—Any 
rate adjustment shall occur in the calendar 
quarter following the publication of call report 
data, such that the rate based on call report 
data from any one calendar quarter, which is 
published in the first following calendar quar-
ter, shall be adjusted in that first following cal-
endar quarter and payable in the second fol-
lowing quarter. 
(D) RATE FOLLOWING INITIAL 2-YEAR PE-
RIOD.—Generally, the rate based on call report 
data from the eighth calendar quarter after the 
date of the capital investment under the Pro-
gram shall be payable until the expiration of
the 41⁄2-year period that begins on the date of 
the investment. In the case where the amount 
of small business lending has remained the 
same or decreased relative to the institution’s 
baseline in the eighth quarter after the date of 
the capital investment under the Program, the 
rate shall be 7 percent until the expiration of 
the 41⁄2-year period that begins on the date of 
the investment. 
(E) RATE
FOLLOWING
INITIAL
41⁄2-YEAR 
PERIOD.—The dividend or interest rate paid on 
any preferred stock or other financial instru-
ment issued by an eligible institution that re-
ceives a capital investment under the Program 
shall increase to 9 percent at the end of the 
41⁄2-year period that begins on the date of the 
capital investment under the Program. 
(F) LIMITATION
ON
RATE
REDUCTIONS 
WITH RESPECT TO CERTAIN AMOUNT.—The re-
duction in the dividend or interest rate payable 
to Treasury by any eligible institution shall be 
limited such that the rate reduction shall not 
apply to a dollar amount of the investment 
made by Treasury that is greater than the dol-
lar amount increase in the amount of small
business lending realized under this program. 
The Secretary may issue guidelines that will 
apply to new capital investments limiting the 
amount of capital available to eligible institu-
tions consistent with this limitation. 
(G) RATE ADJUSTMENTS FOR S CORPORA-
TION.—Before making a capital investment in 
an eligible institution that is an S corporation 
or a corporation organized on a mutual basis, 
the Secretary may adjust the dividend or inter-
est rate on the financial instrument to be issued 
to the Secretary, from the dividend or interest 
rate that would apply under subparagraphs (A) 
through (F), to take into account any differen-
tial tax treatment of securities issued by such 
eligible institution. For purpose of this subpara-
graph, the term ‘‘S corporation’’ has the same 
meaning as in section 1361(a) of the Internal 
Revenue Code of 1986. 
(H) REPAYMENT DEADLINE.—The capital 
investment received by an eligible institution 
under the Program shall be evidenced by pre-
ferred stock or other financial instrument 
that—
(i) includes, as a term and condition, 
that the capital investment will— 
(I) be repaid not later than the 
end of the 10-year period beginning 
on the date of the capital investment 
under the Program; or 
(II) at the end of such 10-year 
period, be subject to such additional 
terms as the Secretary shall prescribe, 
which shall include a requirement that 
the stock or instrument shall carry 
the highest dividend or interest rate 
payable; and 
(ii) provides that the term and condi-
tion described under clause (i) shall not 
apply if the application of that term and 
condition would adversely affect the capital 
treatment of the stock or financial instru-
ment under current or successor applicable 
capital provisions compared to a capital in-
strument with identical terms other than 
the term and condition described under 
clause (i). 
(I) REQUIREMENTS
ON
FINANCIAL
IN-
STRUMENTS ISSUED BY A COMMUNITY DEVEL-
OPMENT
FINANCIAL
INSTITUTION
LOAN 
FUND.—Any equity equivalent capital issued to 
the Treasury by a Community Development Fi-
nancial Institution loan fund receiving a capital 
investment under the Program shall provide 
that the rate at which interest is payable shall 
be 2 percent per annum for 8 years. After 8 
years, the rate at which interest is payable shall 
be 9 percent. 
(J) INCENTIVES CONTINGENT ON AN IN-
CREASE IN THE NUMBER OF LOANS MADE.— 
For any quarter during the first 41⁄2-year pe-
riod following the date on which an eligible in-
stitution receives a capital investment under the 
Program, other than the first such quarter, in 
which the institution’s change in the amount of 
small business lending relative to the baseline is 
positive, if the number of loans made by the in-
stitution does not increase by 2.5 percent for 
each 2.5 percent increase of small business 
lending, then the rate at which dividends and 
interest shall be payable during the following 
quarter on preferred stock or other financial in-
struments issued to the Treasury by the eligible 
institution shall be—
(i) 5 percent, if such quarter is within 
the 2-year period following the date on 
which the eligible institution receives the 
capital investment under the Program; or 
(ii) 7 percent, if such quarter is after 
such 2-year period. 
(K) ALTERNATIVE COMPUTATION.—An eli-
gible institution may choose to compute their 
small business lending amount by computing 
the amount of small business lending, as if the 
definition of such term did not require that the 
loans comprising such lending be made to small 
business. Any eligible institution choosing to 
compute their small business lending in this 
manner shall certify that all lending included by 
the institution for purposes of computing the 
increase in lending under this paragraph was 
made to small businesses. 
(5) ADDITIONAL INCENTIVES TO REPAY.—The 
Secretary may, by regulation or guidance issued 
under section 104(8), establish repayment incentives 
in addition to the incentive in paragraph (4)(E) that 
will apply to new capital investments in a manner 
that the Secretary determines to be consistent with 
the purposes of this title.
(6) 
CAPITAL
PURCHASE
PROGRAM
REFI-
NANCE.— 
(A) IN GENERAL.—The Secretary shall, in 
a manner that the Secretary determines to be 
consistent with the purposes of this title, issue 
regulations and other guidance to permit eligi-
ble institutions to refinance securities issued to 
Treasury under the CDCI and the CPP for se-
curities to be issued under the Program. 
(B) PROHIBITION
ON
PARTICIPATION
BY 
NON-PAYING
CPP
PARTICIPANTS.—Subpara-
graph (A) shall not apply to any eligible institu-
tion that has missed more than one dividend 
payment due under the CPP. For purposes of 
this subparagraph, a CPP dividend payment 
that is submitted within 60 days of the due 
date of such payment shall not be considered a 
missed dividend payment. 
(7) OUTREACH TO MINORITIES, WOMEN, AND 
VETERANS.—The Secretary shall require eligible in-
stitutions receiving capital investments under the 
Program to provide linguistically and culturally ap-
propriate outreach and advertising in the applicant 
pool describing the availability and application proc-
ess of receiving loans from the eligible institution
that are made possible by the Program through the 
use of print, radio, television or electronic media out-
lets which target organizations, trade associations, 
and individuals that— 
(A) represent or work within or are mem-
bers of minority communities; 
(B) represent or work with or are women; 
and 
(C) represent or work with or are veterans. 
(8) ADDITIONAL TERMS.—The Secretary may, 
by regulation or guidance issued under section 5(9), 
make modifications that will apply to new capital in-
vestments in order to manage risks associated with 
the administration of the Fund in a manner con-
sistent with the purposes of this title. 
(9) MINIMUM
UNDERWRITING
STANDARDS.— 
The appropriate Federal banking agency for an eli-
gible institution that receives funds under the Pro-
gram shall within 60 days issue guidance regarding 
prudent underwriting standards that must be used 
for loans made by the eligible institution using such 
funds. In the case of a community development fi-
nancial institution loan fund, the Community Devel-
opment Financial Institutions Fund shall within 60 
days issue regulations defining minimum under-
writing standards that must be used for loans made 
by the eligible institution using such funds. 
(10) REPORTING.—Each eligible institution re-
ceiving a capital investment under the Program shall 
issue a quarterly report to the Secretary detailing 
the percentage of new loans to small businesses the 
institution makes that are— 
(A) guaranteed by the Small Business Ad-
ministration; 
(B) made to Small Business Investment 
Companies; 
(C) other loans made to small business 
concerns (as defined under the Small Business 
Act), if the internal reporting of the concern 
distinguishes the size of businesses to which 
loans are made; and 
(D) other loans made to entities that the 
internal reporting of the concern classifies as a 
small business. 
(e) NOTIFICATION TO CUSTOMERS.—Any eligible in-
stitution receiving funds under the Program shall— 
(1) disclose on every applicable loan transaction 
that the loan is being made possible by the Program; 
and
(2) if such institution has an established inter-
net website, such institution shall make available on 
its internet website— 
(A) the written reports made by the Sec-
retary pursuant to paragraphs (1) and (2) of 
section 7; and 
(B) a statement that the institution, as a 
participant in the Program, is seeking to make 
small business loans to qualified borrowers and 
may not discriminate on the basis of any factor 
prohibited under the Equal Credit Opportunity 
Act, including the race, color, religion, national 
origin, sex, marital status, or age. 
SEC. 104. ADDITIONAL AUTHORITIES OF THE SECRETARY. 
The Secretary may take such actions as the Secretary 
deems necessary to carry out the authorities in this title, 
including, without limitation, the following: 
(1) The Secretary may use the services of any 
agency or instrumentality of the United States or 
component thereof on a reimbursable basis, and any 
such agency or instrumentality or component thereof 
is authorized to provide services as requested by the 
Secretary using all authorities vested in or delegated 
to that agency, instrumentality, or component.
(2) The Secretary may designate any bank, sav-
ings association, trust company, security broker or 
dealer, asset manager, or investment adviser as a fi-
nancial agent of the Federal Government and such 
institution shall perform all such reasonable duties 
related to this title as financial agent of the Federal 
Government as may be required. The Secretary shall 
have authority to amend existing agreements with fi-
nancial agents, entered into during the 2-year period 
before the date of enactment of this title, to perform 
reasonable duties related to this title. 
(3) The Secretary may exercise any rights re-
ceived in connection with any preferred stock or 
other financial instruments or assets purchased or 
acquired pursuant to the authorities granted under 
this title. 
(4) Subject to section 4(b)(3), the Secretary 
may manage any assets purchased under this title, 
including revenues and portfolio risks therefrom. 
(5) The Secretary may sell, dispose of, transfer, 
exchange or enter into securities loans, repurchase 
transactions, or other financial transactions in re-
gard to, any preferred stock or other financial in-
strument or asset purchased or acquired under this
title, upon terms and conditions and at a price de-
termined by the Secretary. 
(6) The Secretary may manage or prohibit con-
flicts of interest that may arise in connection with 
the administration and execution of the authorities 
provided under this title. 
(7) The Secretary may establish and use vehi-
cles, subject to supervision by the Secretary, to pur-
chase, hold, and sell preferred stock or other finan-
cial instruments and issue obligations. 
(8) The Secretary may, in consultation with the 
Administrator of the Small Business Administration, 
issue such regulations and other guidance as may be 
necessary or appropriate to define terms or carry 
out the authorities or purposes of this title. 
SEC. 105. CONSIDERATIONS. 
In exercising the authorities granted in this title, the 
Secretary shall take into consideration— 
(1) increasing the availability of credit for small 
businesses; 
(2) providing funding to minority-owned eligible 
institutions and other eligible institutions that serve 
small businesses that are minority-, veteran-, and 
women-owned and that also serve low- and mod-
erate-income, minority, and other underserved or 
rural communities; 
(3) protecting and increasing American jobs; 
(4) increasing the opportunity for small busi-
ness development in areas with high unemployment 
rates that exceed the national average; 
(5) ensuring that all eligible institutions may 
apply to participate in the program established 
under this title, without discrimination based on ge-
ography; 
(6) providing transparency with respect to use 
of funds provided under this title; 
(7) minimizing the cost to taxpayers of exer-
cising the authorities; 
(8) promoting and engaging in financial edu-
cation to would-be borrowers; and 
(9) providing funding to eligible institutions 
that serve small businesses directly affected by the 
discharge of oil arising from the explosion on and 
sinking of the mobile offshore drilling unit Deep-
water Horizon and small businesses in communities 
that have suffered negative economic effects as a re-
sult of that discharge with particular consideration 
to States along the coast of the Gulf of Mexico.
SEC. 106. REPORTS. 
The Secretary shall provide to the appropriate com-
mittees of Congress— 
(1) within 7 days of the end of each month 
commencing with the first month in which trans-
actions are made under the Program, a written re-
port describing all of the transactions made during 
the reporting period pursuant to the authorities 
granted under this title; 
(2) after the end of March and the end of Sep-
tember, commencing September 30, 2010, a written 
report on all projected costs and liabilities, all oper-
ating expenses, including compensation for financial 
agents, and all transactions made by the Fund, 
which shall include participating institutions and 
amounts each institution has received under the Pro-
gram; and 
(3) within 7 days of the end of each month 
commencing with the first month in which trans-
actions are made under the Program, a written re-
port detailing how eligible institutions participating 
in the Program have used the funds such institu-
tions received under the Program. 
SEC. 107. OVERSIGHT AND AUDITS. 
(a) INSPECTOR GENERAL OVERSIGHT.—The Inspec-
tor General of the Department of the Treasury shall con-
duct, supervise, and coordinate audits and investigations 
of the Program through the Office of Small Business 
Lending Fund Program Oversight established under sub-
section (b). 
(b) OFFICE OF SMALL BUSINESS LENDING FUND 
PROGRAM OVERSIGHT.— 
(1) ESTABLISHMENT.—There is hereby estab-
lished within the Office of the Inspector General of 
the Department of the Treasury a new office to be 
named the ‘‘Office of Small Business Lending Fund 
Program Oversight’’ to provide oversight of the Pro-
gram. 
(2) LEADERSHIP.—The Inspector General shall 
appoint a Special Deputy Inspector General for 
SBLF Program Oversight to lead the Office, with 
commensurate staff, who shall report directly to the 
Inspector General and who shall be responsible for 
the performance of all auditing and investigative ac-
tivities relating to the Program. 
(3) REPORTING.— 
(A) IN GENERAL.—The Inspector General 
shall issue a report no less than two times a 
year to the Congress and the Secretary devoted 
to the oversight provided by the Office, includ-
ing any recommendations for improvements to 
the Program. 
(B) RECOMMENDATIONS.—With respect to 
any deficiencies identified in a report under 
subparagraph (A), the Secretary shall either— 
(i) take actions to address such defi-
ciencies; or 
(ii) certify to the appropriate commit-
tees of Congress that no action is nec-
essary or appropriate. 
(4) COORDINATION.—The Inspector General, in 
maximizing the effectiveness of the Office, shall 
work with other Offices of Inspector General, as ap-
propriate, to minimize duplication of effort and en-
sure comprehensive oversight of the Program. 
(5) TERMINATION.—The Office shall terminate 
at the end of the 6-month period beginning on the 
date on which all capital investments are repaid 
under the Program or the date on which the Sec-
retary determines that any remaining capital invest-
ments will not be repaid. 
(6) DEFINITIONS.—For purposes of this sub-
section: 
(A) OFFICE.—The term ‘‘Office’’ means 
the Office of Small Business Lending Fund
Program Oversight established under paragraph 
(1). 
(B) INSPECTOR GENERAL.—The term ‘‘In-
spector General’’ means the Inspector General 
of the Department of the Treasury. 
(c) GAO AUDIT.—The Comptroller General of the 
United States shall perform an annual audit of the Pro-
gram and issue a report to the appropriate committees 
of Congress containing the results of such audit. 
(d) REQUIRED CERTIFICATIONS.— 
(1) ELIGIBLE INSTITUTION CERTIFICATION.— 
Each eligible institution that participate in the Pro-
gram must certify that such institution is in compli-
ance with the requirements of section 103.121 of 
title 31, Code of Federal Regulations, a regulation 
that, at a minimum, requires financial institutions, 
as that term is defined in 31 U.S.C. 5312(a)(2) and 
(c)(1)(A), to implement reasonable procedures to 
verify the identity of any person seeking to open an 
account, to the extent reasonable and practicable, 
maintain records of the information used to verify 
the person’s identity, and determine whether the 
person appears on any lists of known or suspected 
terrorists or terrorist organizations provided to the 
financial institution by any government agency.
(2) LOAN RECIPIENTS.—With respect to funds 
received by an eligible institution under the Pro-
gram, any business receiving a loan from the eligible 
institution using such funds after the date of the en-
actment of this title shall certify to such eligible in-
stitution that the principals of such business have 
not been convicted of a sex offense against a minor 
(as such terms are defined in section 111 of the Sex 
Offender Registration and Notification Act (42 
U.S.C. 16911)). 
(e) PROHIBITION ON PORNOGRAPHY.—None of the 
funds made available under this title may be used to pay 
the salary of any individual engaged in activities related 
to the Program who has been officially disciplined for vio-
lations of subpart G of the Standards of Ethical Conduct 
for Employees of the Executive Branch for viewing, 
downloading, or exchanging pornography, including child 
pornography, on a Federal Government computer or while 
performing official Federal Government duties. 
SEC. 108. CREDIT REFORM; FUNDING. 
(a) CREDIT REFORM.—The cost of purchases of pre-
ferred stock and other financial instruments made as cap-
ital investments under this title shall be determined as 
provided under the Federal Credit Reform Act of 1990 
(2 U.S.C. 661 et seq.).
(b) FUNDS MADE AVAILABLE.—There are hereby ap-
propriated, out of funds in the Treasury not otherwise ap-
propriated, such sums as may be necessary to pay the 
costs of $30,000,000,000 of capital investments in eligible 
institutions, including the costs of modifying such invest-
ments, and reasonable costs of administering the program 
of making, holding, managing, and selling the capital in-
vestments. 
SEC. 109. TERMINATION AND CONTINUATION OF AUTHORI-
TIES. 
(a) TERMINATION OF INVESTMENT AUTHORITY.— 
The authority to make capital investments in eligible insti-
tutions, including commitments to purchase preferred 
stock or other instruments, provided under this title shall 
terminate 1 year after the date of enactment of this title. 
(b) CONTINUATION OF OTHER AUTHORITIES.—The 
authorities of the Secretary in section 104 shall not be 
limited by the termination date in subsection (a). 
SEC. 110. PRESERVATION OF AUTHORITY. 
Nothing in this title may be construed to limit the 
authority of the Secretary under any other provision of 
law. 
SEC. 111. ASSURANCES. 
(a) SMALL BUSINESS LENDING FUND SEPARATE 
FROM TARP.—The Small Business Lending Fund Pro-
gram is established as separate and distinct from the 
Troubled Asset Relief Program established by the Emer-
gency Economic Stabilization Act of 2008. An institution 
shall not, by virtue of a capital investment under the Small 
Business Lending Fund Program, be considered a recipi-
ent of the Troubled Asset Relief Program. 
(b) CHANGE IN LAW.—If, after a capital investment 
has been made in an eligible institution under the Pro-
gram, there is a change in law that modifies the terms 
of the investment or program in a materially adverse re-
spect for the eligible institution, the eligible institution 
may, after consultation with the appropriate Federal 
banking agency for the eligible institution, repay the in-
vestment without impediment. 
SEC. 112. STUDY AND REPORT WITH RESPECT TO WOMEN- 
OWNED, VETERAN-OWNED, AND MINORITY- 
OWNED BUSINESSES. 
(a) STUDY.—The Secretary shall conduct a study to 
determine the number of women-owned businesses, vet-
eran-owned businesses, and minority-owned businesses 
that receive assistance as a result of the Program (includ-
ing determining the percentage of the total number of all 
businesses that receive assistance that such number rep-
resents), including—
(1) efforts, including technical assistance and 
outreach that institutions have employed under the 
Program to provide loans to minority-, veteran-, and 
women-owned small businesses; 
(2) loan applications received; 
(3) loan applications approved; and 
(4) and any other relevant data related to such 
transactions to promote the purposes of the Pro-
gram as the Secretary may require. 
(b) REPORT.—Not later than one year after the date 
of enactment of this Act, the Secretary shall submit to 
Congress a report on the results of the study conducted 
pursuant to subsection (a). To the extent possible, the 
Secretary shall disaggregate the results of such study by 
ethnic group and gender. 
(c) INFORMATION PROVIDED TO THE SECRETARY.— 
Eligible institutions that participate in the Program shall 
provide the Secretary with such information as the Sec-
retary may require to carry out the study required by this 
section. 
SEC. 113. TEMPORARY AMORTIZATION AUTHORITY. 
(a) PURPOSE.—The purpose this section is to address 
the ongoing effects of the financial crisis on small busi-
nesses by providing temporary authority to amortize losses
or write-downs in order to increase the availability of cred-
it for small businesses. 
(b) IN GENERAL.—For purposes of capital calcula-
tion under the Financial Institutions Examination Coun-
cil’s Consolidated Reports of Condition, an eligible institu-
tion may choose to amortize any loss or write-down, on 
a quarterly straight line basis over a period determined 
under subsection (c), beginning with the month in which 
such loss or write-down occurs, resulting from the applica-
tion of FASB Statement 114 or 144 to— 
(1) other real estate owned (as defined under 
section 34.81 of title 12, Code of Federal Regula-
tion), or 
(2) an impared loan secured by real estate, 
provided that the institution discloses the difference in the 
amount of the institution’s capital, when calculated taking 
into account the temporary amortization, from the amount 
of the institution’s capital when calculated without taking 
into account the temporary amortization on the Financial 
Institutions Examination Council’s Consolidated Reports 
of Condition. 
(c) AMORTIZATION REQUIREMENTS.—During the ini-
tial 2-year period referred to in section 4(d)(4), an eligible 
institution’s amortization period shall be adjusted to re-
flect the following schedule based on the institution’s
change in the amount of small business lending relative 
to the baseline: 
(1) If the amount of small business lending has 
increased by less than 2.5 percent, the amortization 
period shall be 6 years. 
(2) If the amount of small business lending has 
increased by 2.5 percent or greater, but by less than 
5.0 percent, the amortization period shall be 7 years. 
(3) If the amount of small business lending has 
increased by 5.0 percent or greater, but by less than 
7.5 percent, the amortization period shall be 8 years. 
(4) If the amount of small business lending has 
increased by 7.5 percent or greater, but by less than 
10.0 percent, the amortization period shall be 9 
years. 
(5) If the amount of small business lending has 
increased by 10 percent or greater, the amortization 
period shall be 10 years. 
(d) MINIMUM UNDERWRITING STANDARDS.—The 
appropriate Federal banking agency for an eligible institu-
tion that chooses to amortize any loss or write-down as 
permitted under subsection (b) shall, within 60 days of 
the date of the enactment of this title, issue regulations 
defining minimum underwriting standards that must be 
used for loans made by the eligible institution.
(e) EFFECTIVE DATE.—The provisions of this section 
shall apply to loan origination that occurred on or after 
January 1, 2003, and before January 1, 2008. 
SEC. 114. SENSE OF CONGRESS. 
It is the sense of Congress that the Federal Deposit 
Insurance Corporation and other bank regulators are 
sending mixed messages to banks regarding regulatory 
capital requirements and lending standards, which is a 
contributing cause of decreased small business lending and 
increased regulatory uncertainty at community banks. 
TITLE II—STATE SMALL 
BUSINESS CREDIT INITIATIVE 
SEC. 201. SHORT TITLE. 
This title may be cited as the ‘‘State Small Business 
Credit Initiative Act of 2010’’. 
SEC. 202. DEFINITIONS. 
For purposes of this title, the following definitions 
shall apply: 
(1) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’— 
(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 ac-
cordance with the Federal Credit Union Act. 
(2) ENROLLED
LOAN.—The term ‘‘enrolled 
loan’’ means a loan made by a financial institution 
lender that is enrolled by a participating State in an 
approved State capital access program in accordance 
with this title. 
(3) FEDERAL CONTRIBUTION.—The term ‘‘Fed-
eral contribution’’ means the portion of the contribu-
tion made by a participating State to, or for the ac-
count of, an approved State program that is made 
with Federal funds allocated to the State by the Sec-
retary under section 203. 
(4) FINANCIAL
INSTITUTION.—The term ‘‘fi-
nancial institution’’ means any insured depository 
institution, insured credit union, or community de-
velopment 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 ‘‘partici-
pating State’’ means any State that has been ap-
proved for participation in the Program under sec-
tion 204.
(6) PROGRAM.—The term ‘‘Program’’ means 
the State Small Business Credit Initiative estab-
lished under this title. 
(7) QUALIFYING LOAN OR SWAP FUNDING FA-
CILITY.—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 in-
stitution lender; 
(B) depositing contributions made by the 
participating State, including State contribu-
tions made with Federal contributions; and 
(C) covering losses on enrolled loans by 
disbursing accumulated funds. 
(9) STATE.—The term ‘‘State’’ means— 
(A) a State of the United States; 
(B) the District of Columbia, the Common-
wealth of Puerto Rico, the Commonwealth of 
Northern Mariana Islands, Guam, American 
Samoa, and the United States Virgin Islands; 
(C) when designated by a State of the 
United States, a political subdivision of that 
State that the Secretary determines has the ca-
pacity to participate in the Program; and 
(D) under the circumstances described in 
section 204(d), a municipality of a State of the 
United States to which the Secretary has given 
a special permission under section 204(d). 
(10) STATE CAPITAL ACCESS PROGRAM.—The 
term ‘‘State capital access program’’ means a pro-
gram of a State that—
(A) uses public resources to promote pri-
vate access to credit; and 
(B) meets the eligibility criteria in section 
205(c). 
(11) STATE
OTHER
CREDIT
SUPPORT
PRO-
GRAM.—The term ‘‘State other credit support pro-
gram’’— 
(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 pro-
gram; and 
(iii) meets the eligibility criteria in 
section 206(c); and 
(B) includes, collateral support programs, 
loan participation programs, State-run venture 
capital fund programs, and credit guarantee 
programs. 
(12) STATE PROGRAM.—The term ‘‘State pro-
gram’’ means a State capital access program or a 
State other credit support program. 
(13) 
SECRETARY.—The 
term 
‘‘Secretary’’ 
means the Secretary of the Treasury.
SEC. 203. FEDERAL FUNDS ALLOCATED TO STATES. 
(a) PROGRAM ESTABLISHED; PURPOSE.—There is 
established the State Small Business Credit Initiative 
(hereinafter in this title referred to as the ‘‘Program’’), 
to be administered by the Secretary. Under the Program, 
the Secretary shall allocate Federal funds to participating 
States and make the allocated funds available to the par-
ticipating States as provided in this section for the uses 
described in this section. 
(b) ALLOCATION FORMULA.— 
(1) IN GENERAL.—Not later than 30 days after 
the date of enactment of this title, the Secretary 
shall allocate Federal funds to participating States 
so that each State is eligible to receive an amount 
equal to the average of the respective amounts that 
the State— 
(A) would receive under the 2009 alloca-
tion, as determined under paragraph (2); and 
(B) would receive under the 2010 alloca-
tion, as determined under paragraph (3). 
(2) 2009 ALLOCATION FORMULA.— 
(A) IN GENERAL.—The Secretary shall de-
termine the 2009 allocation by allocating Fed-
eral 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 Sec-
retary shall adjust the allocations under sub-
paragraph (A) for each State to the extent nec-
essary 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 em-
ployed in such State determined for De-
cember 2007; over 
(ii) the number of individuals em-
ployed in such State determined for De-
cember 2008. 
(3) 2010 ALLOCATION FORMULA.— 
(A) IN GENERAL.—The Secretary shall de-
termine the 2010 allocation by allocating Fed-
eral funds among the States in the proportion 
that each such State’s 2009 unemployment 
number bears to the aggregate of the 2009 un-
employment numbers for all of the States.
(B) MINIMUM
ALLOCATION.—The Sec-
retary shall adjust the allocations under sub-
paragraph (A) for each State to the extent nec-
essary to ensure that no State receives less than 
0.9 percent of the Federal funds. 
(C) 2009 UNEMPLOYMENT
NUMBER
DE-
FINED.—For purposes of this paragraph and 
with respect to a State, the term ‘‘2009 unem-
ployment number’’ means the number of indi-
viduals within such State who were determined 
to be unemployed by the Bureau of Labor Sta-
tistics for December 2009. 
(c) AVAILABILITY
OF ALLOCATED AMOUNT.—The 
amount allocated by the Secretary to each participating 
State under subsection (b) shall be made available to the 
State as follows: 
(1) ALLOCATED
AMOUNT
GENERALLY
TO
BE 
AVAILABLE TO STATE IN ONE-THIRDS.— 
(A) IN GENERAL.—The Secretary shall— 
(i) apportion the participating State’s 
allocated amount into one-thirds; 
(ii) transfer to the participating State 
the first one-third when the Secretary ap-
proves the State for participation under 
section 204; and
(iii) transfer to the participating State 
each successive one-third when the State 
has certified to the Secretary that it has 
expended, transferred, or obligated 80 per-
cent of the last transferred one-third for 
Federal contributions to, or for the ac-
count of, State programs. 
(B) AUTHORITY TO WITHHOLD PENDING 
AUDIT.—The Secretary may withhold the trans-
fer of any successive one-third pending results 
of a financial audit. 
(C) TRANSFERS CONTINGENT ON INSPEC-
TOR GENERAL AUDITS.— 
(i) IN GENERAL.—Before a transfer 
to a participating State of the second one- 
third or the last one-third, the Inspector 
General of the Department of the Treasury 
shall carry out an audit of the partici-
pating State’s use of amounts already re-
ceived. 
(ii) PENALTY FOR MISSTATEMENT.— 
Any participating State that is found to 
have intentionally misstated any report 
issued to the Secretary under the Program 
shall be ineligible to receive any additional
funds under the Program. Funds that had 
been allocated or that would otherwise 
have been allocated to such participating 
State shall be paid into the general fund of 
the Treasury for reduction of the public 
debt. 
(iii) MUNICIPALITIES.—For purposes 
of this subparagraph, the term ‘‘partici-
pating State’’ shall include a municipality 
given special permission to participate in 
the Program, pursuant to section 204(d). 
(D) EXCEPTION.— 
(i) IN GENERAL.—The Secretary may, 
in the Secretary’s discretion, transfer the 
full amount of the participating State’s al-
located 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 facil-
ity. 
(ii) RECOUPMENT TRIGGERED BY IN-
TENTIONAL
MISSTATEMENT.—If, in any 
audit of a report issued by a participating 
State that receives a single transfer pursu-
ant to clause (i), the Secretary or the In-
spector General of the Department of the 
Treasury determines that such State inten-
tionally misstated information in such re-
port, the participating State shall be re-
quired to fully repay all amounts received 
by the State under the Program, and such 
amounts shall be paid into the general 
fund of the Treasury for reduction of the 
public debt. 
(2) TRANSFERRED
AMOUNTS.—Each amount 
transferred to a participating State under this sec-
tion shall remain available to the State until used by 
the State as permitted under paragraph (3). 
(3) USE OF TRANSFERRED FUNDS.—Each par-
ticipating 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 trans-
ferred, 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 in-
curred by the State in implementing an ap-
proved State program in an amount not to ex-
ceed 3 percent of that successive one-third. 
(4) 
TERMINATION
OF
AVAILABILITY
OF 
AMOUNTS NOT TRANSFERRED WITHIN 2 YEARS OF 
PARTICIPATION.—Any portion of a participating 
State’s allocated amount that has not been trans-
ferred to the State under this section by the end of 
the 2-year period beginning on the date that the 
Secretary approves the State for participation may 
be deemed by the Secretary to be no longer allocated 
to the State and no longer available to the State and 
shall be returned to the General Fund of the Treas-
ury. 
(5) TRANSFERRED
AMOUNTS
NOT
ASSIST-
ANCE.—The amounts transferred to a participating 
State under this section shall not be considered ‘‘as-
sistance’’ for purposes of subtitle V of title 31, 
United States Code. 
(6) DEFINITIONS.—For purposes of this sec-
tion—
(A) the term ‘‘allocated amount’’ means 
the total amount of Federal funds allocated by 
the Secretary under subsection (b) to the par-
ticipating 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 partici-
pating State’s allocated amount. 
SEC. 204. APPROVING STATES FOR PARTICIPATION. 
(a) APPLICATION.—Any State may apply to the Sec-
retary 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 im-
plement a State program and participate in the Pro-
gram; 
(2) all legal actions necessary to enable such 
designated department, agency, or political subdivi-
sion 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 pro-
gram under section 205 or approval as a State other 
credit support program under section 206, in each 
case within the time period provided in the respec-
tive section; and 
(4) the State and the Secretary have executed 
an allocation agreement that— 
(A) conforms to the requirements of this 
title; 
(B) ensures that the State program com-
plies with such national standards as are estab-
lished by the Secretary under section 209(a)(2); 
(C) sets forth internal control, compliance, 
and reporting requirements as established by 
the Secretary, and such other terms and condi-
tions necessary to carry out the purposes of this 
title, including an agreement by the State to 
allow the Secretary to audit State programs; 
(D) requires that the State program be 
fully positioned, within 90 days of the State’s 
execution of the allocation agreement with the 
Secretary, to act on providing the kind of credit
support that the State program was established 
to provide; and 
(E) includes an agreement by the State to 
deliver to the Secretary, and update annually, a 
schedule describing how the State intends to 
apportion among its State programs the Fed-
eral funds allocated to the State. 
(c) CONTRACTUAL ARRANGEMENTS FOR IMPLEMEN-
TATION 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 con-
tractual arrangements for the implementation and admin-
istration of its State program with— 
(1) an existing, approved State program admin-
istered by another State; or 
(2) an authorized agent of, or entity supervised 
by, the State, including for-profit and not-for-profit 
entities. 
(d) SPECIAL PERMISSION.— 
(1) CIRCUMSTANCES
WHEN
A
MUNICIPALITY 
MAY APPLY DIRECTLY.—If a State does not, within 
60 days after the date of enactment of this title, file 
with the Secretary a notice of its intent to apply for 
approval by the Secretary of a State program or 
within 9 months after the date of enactment of this
title, file with the Secretary a complete application 
for approval of a State program, the Secretary may 
grant to municipalities of that State a special per-
mission that will allow them to apply directly to the 
Secretary without the State for approval to be par-
ticipating municipalities. 
(2) TIMING
REQUIREMENTS
APPLICABLE
TO 
MUNICIPALITIES
APPLYING
DIRECTLY.—To qualify 
for the special permission, a municipality of a State 
must, within 12 months after the date of enactment 
of this title, file with the Secretary a complete appli-
cation for approval by the Secretary of a State pro-
gram. 
(3) NOTICES
OF
INTENT
AND
APPLICATIONS 
FROM MORE THAN 1 MUNICIPALITY.—A municipality 
of a State may combine with 1 or more other mu-
nicipalities of that State to file a joint notice of in-
tent to file and a joint application. 
(4) APPROVAL
CRITERIA.—The general ap-
proval criteria in paragraphs (2) and (4) shall apply. 
(5) ALLOCATION TO MUNICIPALITIES.— 
(A) IF MORE THAN 3.—If more than 3 mu-
nicipalities, 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 para-
graph (4), the Secretary shall allocate Federal 
funds to the 3 municipalities with the largest 
populations. 
(B) IF 3 OR FEWER.—If 3 or fewer mu-
nicipalities, 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 para-
graph (4), the Secretary shall allocate Federal 
funds to each applicant municipality or com-
bination 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 municipali-
ties, based on the most recent available decennial 
census.
(4) provides its portfolio insurance solely for 
loans that meet both the following requirements: 
(A) The borrower has 500 employees or 
less at the time that the loan is enrolled in the 
Program. 
(B) The loan amount does not exceed 
$5,000,000. 
(d) FEDERAL CONTRIBUTIONS TO APPROVED STATE 
CAPITAL ACCESS PROGRAMS.—A State capital access pro-
gram approved under this section will be eligible for receiv-
ing 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 finan-
cial 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 require-
ments that meet the following minimum requirements: 
(1) EXPERIENCE AND CAPACITY.—The partici-
pating State shall determine for each financial insti-
tution 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 devel-
opment financial institution, the Community Devel-
opment Financial Institution Fund, that the finan-
cial institution has sufficient commercial lending ex-
perience and financial and managerial capacity to 
participate in the approved State capital access pro-
gram. The determination by the State shall not be 
reviewable by the Secretary. 
(2) INVESTMENT AUTHORITY.—Subject to ap-
plicable State law, the participating State may in-
vest, or cause to be invested, funds held in a reserve 
fund by establishing a deposit account at the finan-
cial institution lender in the name of the partici-
pating 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 partici-
pating State determines is safe and liquid. 
(3) LOAN TERMS AND CONDITIONS TO BE DE-
TERMINED BY AGREEMENT.—A loan to be filed for 
enrollment in an approved State capital access pro-
gram may be made with such interest rate, fees, and 
other terms and conditions, and the loan may be en-
rolled 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 pro-
gram must require the financial institution lender to 
have a meaningful amount of its own capital re-
sources at risk in the loan. 
(5) PREMIUM
CHARGES
MINIMUM
AND
MAX-
IMUM 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 in-
surance 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 contribu-
tions made under this Program. 
(7) LOAN PURPOSE.—
(A) PARTICULAR LOAN PURPOSE REQUIRE-
MENTS
AND
PROHIBITIONS.—In connection 
with the filing of a loan for enrollment in an 
approved State capital access program, the fi-
nancial 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 pro-
scribe as prohibited loan purposes for 
enrollment in an approved State cap-
ital access program; and 
(III) the borrower is not— 
(aa) an executive officer, di-
rector, or principal shareholder of 
the financial institution lender; 
(bb) a member of the imme-
diate family of an executive offi-
cer, director, or principal share-
holder 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 pro-
tection 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 af-
filiate of the financial institution lender; 
and 
(iv) may include additional restric-
tions on the eligibility of loans or bor-
rowers that are not inconsistent with the 
provisions and purposes of this title, in-
cluding compliance with all applicable Fed-
eral and State laws, regulations, ordi-
nances, and Executive orders. 
(B) DEFINITIONS.—For purposes of this 
subsection, the terms ‘‘executive officer’’, ‘‘di-
rector’’, ‘‘principal shareholder’’, ‘‘immediate 
family’’, and ‘‘related interest’’ refer to the 
same relationship to a financial institution lend-
er as the relationship described in part 215 of 
title 12 of the Code of Federal Regulations, or 
any successor to such part. 
(8) CAPITAL ACCESS FOR SMALL BUSINESSES 
IN UNDERSERVED COMMUNITIES.—At the time that 
a State applies to the Secretary to have the State 
capital access program approved as eligible for Fed-
eral contributions, the State shall deliver to the Sec-
retary a report stating how the State plans to use 
the Federal contributions to the reserve fund to pro-
vide access to capital for small businesses in low- 
and moderate-income, minority, and other under-
served communities, including women- and minority- 
owned small businesses.
114 
(1) the writing guidelines developed by the 
Plain Language Action and Information Network; or 
(2) guidance provided by the head of the agen-
cy. 
SEC. 605. REPORTS TO CONGRESS. 
(a) INITIAL REPORT.—Not later than 9 months after 
the date of enactment of this title, the head of each agency 
shall publish on the plain writing section of the agency’s 
website a report that describes the agency plan for compli-
ance with the requirements of this title. 
(b) ANNUAL COMPLIANCE REPORT.—Not later than 
18 months after the date of enactment of this title, and 
annually thereafter, the head of each agency shall publish 
on the plain writing section of the agency’s website a re-
port on agency compliance with the requirements of this 
title. 
TITLE VII—SENSE OF CONGRESS 
ON AGRICULTURE AND FARM-
ING SMALL BUSINESS LOANS 
SEC. 701. SENSE OF CONGRESS. 
It is the sense of the Congress that— 
(1) agriculture operations, farms, and rural 
communities should receive equal consideration 
through lending activities for small businesses in