H. R. 5297—47 
(ii) by striking clause (ii); and 
(2) in section 29(c) (15 U.S.C. 656(c))— 
(A) in paragraph (1), by striking ‘‘Subject to paragraph 
(5), as’’ and inserting ‘‘As’’; and 
(B) by striking paragraph (5). 
SEC. 1402. GRANTS FOR SBDCS. 
(a) IN GENERAL.—The Administrator may make grants to small 
business development centers under section 21 of the Small Busi-
ness Act (15 U.S.C. 648) to provide targeted technical assistance 
to small business concerns seeking access to capital or credit, Fed-
eral procurement opportunities, energy efficiency audits to reduce 
energy bills, opportunities to export products or provide services 
to foreign customers, adopting, making innovations in, and using 
broadband technologies, or other assistance. 
(b) ALLOCATION.— 
(1) IN GENERAL.—Subject to paragraph (2), and notwith-
standing the requirements of section 21(a)(4)(C)(iii) of the Small 
Business Act (15 U.S.C. 648(a)(4)(C)(iii)), the amount appro-
priated to carry out this section shall be allocated under the 
formula under section 21(a)(4)(C)(i) of that Act. 
(2) MINIMUM FUNDING.—The amount made available under 
this section to each State shall be not less than $325,000. 
(3) TYPES OF USES.—Of the total amount of the grants 
awarded by the Administrator under this section— 
(A) not less than 80 percent shall be used for counseling 
of small business concerns; and 
(B) not more than 20 percent may be used for classes 
or seminars. 
(c) NO NON-FEDERAL SHARE REQUIRED.—Notwithstanding sec-
tion 21(a)(4)(A) of the Small Business Act (15 U.S.C. 648(a)(4)(A)), 
the recipient of a grant made under this section shall not be 
required to provide non-Federal matching funds. 
(d) DISTRIBUTION.—Not later than 30 days after the date on 
which amounts are appropriated to carry out this section, the 
Administrator shall disburse the total amount appropriated. 
(e) AUTHORIZATION OF APPROPRIATIONS.—There is authorized 
to be appropriated to the Administrator $50,000,000 to carry out 
this section. 
Subtitle E—Disaster Loan Improvement 
SEC. 1501. AQUACULTURE BUSINESS DISASTER ASSISTANCE. 
Section 3 of the Small Business Act (15 U.S.C. 632), as amended 
by section 1343, is amended by adding at the end the following: 
‘‘(z) AQUACULTURE BUSINESS DISASTER ASSISTANCE.—Subject 
to section 18(a) and notwithstanding section 18(b)(1), the Adminis-
trator may provide disaster assistance under section 7(b)(2) to aqua-
culture enterprises that are small businesses.’’.
H. R. 5297—48 
Subtitle F—Small Business Regulatory 
Relief 
SEC. 1601. REQUIREMENTS PROVIDING FOR MORE DETAILED ANAL-
YSES. 
Section 604(a) of title 5, United States Code, is amended— 
(1) in paragraph (1), by striking ‘‘succinct’’; 
(2) in paragraph (2), by striking ‘‘summary’’ each place 
it appears and inserting ‘‘statement’’; 
(3) by redesignating paragraphs (3), (4), and (5) as para-
graphs (4), (5), and (6), respectively; and 
(4) by inserting after paragraph (2) the following: 
‘‘(3) the response of the agency to any comments filed 
by the Chief Counsel for Advocacy of the Small Business 
Administration in response to the proposed rule, and a detailed 
statement of any change made to the proposed rule in the 
final rule as a result of the comments;’’. 
SEC. 1602. OFFICE OF ADVOCACY. 
(a) IN GENERAL.—Section 203 of Public Law 94–305 (15 U.S.C. 
634c) is amended— 
(1) in paragraph (4), by striking ‘‘and’’ at the end; 
(2) in paragraph (5), by striking the period and inserting 
‘‘; and’’; and 
(3) by adding at the end the following: 
‘‘(6) carry out the responsibilities of the Office of Advocacy 
under chapter 6 of title 5, United States Code.’’. 
(b) BUDGETARY LINE ITEM AND AUTHORIZATION OF APPROPRIA-
TIONS.—Title II of Public Law 94–305 (15 U.S.C. 634a et seq.) 
is amended by striking section 207 and inserting the following: 
‘‘SEC. 207. BUDGETARY LINE ITEM AND AUTHORIZATION OF APPRO-
PRIATIONS. 
‘‘(a) APPROPRIATION REQUESTS.—Each budget of the United 
States Government submitted by the President under section 1105 
of title 31, United States Code, shall include a separate statement 
of the amount of appropriations requested for the Office of Advocacy 
of the Small Business Administration, which shall be designated 
in a separate account in the General Fund of the Treasury. 
‘‘(b) ADMINISTRATIVE OPERATIONS.—The Administrator of the 
Small Business Administration shall provide the Office of Advocacy 
with appropriate and adequate office space at central and field 
office locations, together with such equipment, operating budget, 
and communications facilities and services as may be necessary, 
and shall provide necessary maintenance services for such offices 
and the equipment and facilities located in such offices. 
‘‘(c) AUTHORIZATION OF APPROPRIATIONS.—There are authorized 
to be appropriated such sums as are necessary to carry out this 
title. Any amount appropriated under this subsection shall remain 
available, without fiscal year limitation, until expended.’’.
H. R. 5297—49 
Subtitle G—Appropriations Provisions 
SEC. 1701. SALARIES AND EXPENSES. 
(a) APPROPRIATION.—There is appropriated, out of any money 
in the Treasury not otherwise appropriated, for the fiscal year 
ending September 30, 2010, $150,000,000, to remain available until 
September 30, 2012, for an additional amount for the appropriations 
account appropriated under the heading ‘‘SALARIES AND EXPENSES’’ 
under the heading ‘‘SMALL BUSINESS ADMINISTRATION’’, of which— 
(1) $50,000,000 is for grants to small business development 
centers authorized under section 1402; 
(2) $1,000,000 is for the costs of administering grants 
authorized under section 1402; 
(3) $30,000,000 is for grants to States for fiscal year 2011 
to carry out export programs that assist small business concerns 
authorized under section 1207; 
(4) $30,000,000 is for grants to States for fiscal year 2012 
to carry out export programs that assist small business concerns 
authorized under section 1207; 
(5) $2,500,000 is for the costs of administering grants 
authorized under section 1207; 
(6) $5,000,000 is for grants for fiscal year 2011 under 
the Small Business Teaming Pilot Program under section 1314; 
and 
(7) $5,000,000 is for grants for fiscal year 2012 under 
the Small Business Teaming Pilot Program under section 1314. 
(b) REPORT.—Not later than 60 days after the date of enactment 
of this Act, the Administrator shall submit to the Committee on 
Appropriations of the Senate and the Committee on Appropriations 
of the House of Representatives a detailed expenditure plan for 
using the funds provided under subsection (a). 
SEC. 1702. BUSINESS LOANS PROGRAM ACCOUNT. 
(a) IN GENERAL.—There is appropriated, out of any money 
in the Treasury not otherwise appropriated, for the fiscal year 
ending September 30, 2010, for an additional amount for the appro-
priations account appropriated under the heading ‘‘BUSINESS LOANS 
PROGRAM ACCOUNT’’ under the heading ‘‘SMALL BUSINESS ADMINIS-
TRATION’’— 
(1) $8,000,000, to remain available until September 30, 
2012, for fiscal year 2011 for the cost of direct loans authorized 
under section 7(l) of the Small Business Act, as added by 
section 1131 of this title, including the cost of modifying the 
loans; 
(2) $8,000,000, to remain available until September 30, 
2012, for fiscal year 2012 for the cost of direct loans authorized 
under section 7(l) of the Small Business Act, as added by 
section 1131 of this title, including the cost of modifying the 
loans; 
(3) $6,500,000, to remain available until September 30, 
2012, for administrative expenses to carry out the direct loan 
program authorized under section 7(l) of the Small Business 
Act, as added by section 1131 of this title, which may be 
transferred to and merged with the appropriations account 
appropriated under the heading ‘‘SALARIES
AND
EXPENSES’’ 
under the heading ‘‘SMALL BUSINESS ADMINISTRATION’’; and
H. R. 5297—50 
(4) $15,000,000, to remain available until September 30, 
2011, for the cost of guaranteed loans as authorized under 
section 7(a) of the Small Business Act, including the cost of 
modifying the loans. 
(b) DEFINITION.—In this section, the term ‘‘cost’’ has the 
meaning given that term in section 502 of the Congressional Budget 
Act of 1974. 
SEC. 1703. COMMUNITY DEVELOPMENT FINANCIAL INSTITUTIONS 
FUND PROGRAM ACCOUNT. 
There is appropriated, out of any money in the Treasury not 
otherwise appropriated, for the fiscal year ending September 30, 
2010, for an additional amount for the appropriations account appro-
priated under the heading ‘‘COMMUNITY DEVELOPMENT FINANCIAL 
INSTITUTIONS
FUND
PROGRAM
ACCOUNT’’ under the heading 
‘‘DEPARTMENT OF THE TREASURY’’, $13,500,000, to remain 
available until September 30, 2012, for the costs of administering 
guarantees for bonds and notes as authorized under section 114A 
of the Riegle Community Development and Regulatory Improvement 
Act of 1994, as added by section 1134 of this Act. 
SEC. 1704. SMALL BUSINESS LOAN GUARANTEE ENHANCEMENT EXTEN-
SIONS. 
(a) EXTENSION OF PROGRAMS.— 
(1) IN GENERAL.—There is appropriated, out of any funds 
in the Treasury not otherwise appropriated, for an additional 
amount for ‘‘Small Business Administration—Business Loans 
Program Account’’, $505,000,000, to remain available through 
December 31, 2010, for the cost of— 
(A) fee reductions and eliminations under section 501 
of division A of the American Recovery and Reinvestment 
Act of 2009 (Public Law 111–5; 123 Stat. 151), as amended 
by this Act; and 
(B) loan guarantees under section 502 of division A 
of the American Recovery and Reinvestment Act of 2009 
(Public Law 111–5; 123 Stat. 152), as amended by this 
Act. 
(2) COST.—For purposes of this subsection, the term ‘‘cost’’ 
has the same meaning as in section 502 of the Congressional 
Budget Act of 1974 (2 U.S.C. 661a). 
(b) ADMINISTRATIVE EXPENSES.—There is appropriated for an 
additional amount, out of any funds in the Treasury not otherwise 
appropriated, for administrative expenses to carry out sections 501 
and 502 of division A of the American Recovery and Reinvestment 
Act of 2009 (Public Law 111–5), $5,000,000, to remain available 
until expended, which may be transferred and merged with the 
appropriation for ‘‘Small Business Administration—Salaries and 
Expenses’’. 
TITLE II—TAX PROVISIONS 
SEC. 2001. SHORT TITLE. 
This title may be cited as the ‘‘Creating Small Business Jobs 
Act of 2010’’.
H. R. 5297—51 
Subtitle A—Small Business Relief 
PART I—PROVIDING ACCESS TO CAPITAL 
SEC. 2011. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON CER-
TAIN SMALL BUSINESS STOCK. 
(a) IN GENERAL.—Subsection (a) of section 1202 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following 
new paragraph: 
‘‘(4) 100 PERCENT EXCLUSION FOR STOCK ACQUIRED DURING 
CERTAIN PERIODS IN 2010.—In the case of qualified small busi-
ness stock acquired after the date of the enactment of the 
Creating Small Business Jobs Act of 2010 and before January 
1, 2011— 
‘‘(A) paragraph (1) shall be applied by substituting 
‘100 percent’ for ‘50 percent’, 
‘‘(B) paragraph (2) shall not apply, and 
‘‘(C) paragraph (7) of section 57(a) shall not apply.’’. 
(b) CONFORMING AMENDMENT.—Paragraph (3) of section 1202(a) 
of the Internal Revenue Code of 1986 is amended— 
(1) by inserting ‘‘CERTAIN PERIODS IN’’ before ‘‘2010’’ in the 
heading, and 
(2) by striking ‘‘before January 1, 2011’’ and inserting ‘‘on 
or before the date of the enactment of the Creating Small 
Business Jobs Act of 2010’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to stock acquired after the date of the enactment of 
this Act. 
SEC. 
2012. 
GENERAL 
BUSINESS 
CREDITS 
OF 
ELIGIBLE 
SMALL 
BUSINESSES FOR 2010 CARRIED BACK 5 YEARS. 
(a) IN GENERAL.—Section 39(a) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new para-
graph: 
‘‘(4) 5-YEAR
CARRYBACK
FOR
ELIGIBLE
SMALL
BUSINESS 
CREDITS.— 
‘‘(A) IN GENERAL.—Notwithstanding subsection (d), in 
the case of eligible small business credits determined in 
the first taxable year of the taxpayer beginning in 2010— 
‘‘(i) paragraph (1) shall be applied by substituting 
‘each of the 5 taxable years’ for ‘the taxable year’ 
in subparagraph (A) thereof, and 
‘‘(ii) paragraph (2) shall be applied— 
‘‘(I) by substituting ‘25 taxable years’ for ‘21 
taxable years’ in subparagraph (A) thereof, and 
‘‘(II) by substituting ‘24 taxable years’ for ‘20 
taxable years’ in subparagraph (B) thereof. 
‘‘(B) ELIGIBLE SMALL BUSINESS CREDITS.—For purposes 
of this subsection, the term ‘eligible small business credits’ 
has the meaning given such term by section 38(c)(5)(B).’’. 
(b) CONFORMING
AMENDMENT.—Section 39(a)(3)(A) of the 
Internal Revenue Code of 1986 is amended by inserting ‘‘or the 
eligible small business credits’’ after ‘‘credit)’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to credits determined in taxable years beginning after 
December 31, 2009.
H. R. 5297—52 
SEC. 
2013. 
GENERAL 
BUSINESS 
CREDITS 
OF 
ELIGIBLE 
SMALL 
BUSINESSES IN 2010 NOT SUBJECT TO ALTERNATIVE MIN-
IMUM TAX. 
(a) IN GENERAL.—Section 38(c) of the Internal Revenue Code 
of 1986 is amended by redesignating paragraph (5) as paragraph 
(6) and by inserting after paragraph (4) the following new para-
graph: 
‘‘(5) SPECIAL RULES FOR ELIGIBLE SMALL BUSINESS CREDITS 
IN 2010.— 
‘‘(A) IN GENERAL.—In the case of eligible small business 
credits determined in taxable years beginning in 2010— 
‘‘(i) this section and section 39 shall be applied 
separately with respect to such credits, and 
‘‘(ii) in applying paragraph (1) to such credits— 
‘‘(I) the tentative minimum tax shall be treated 
as being zero, and 
‘‘(II) the limitation under paragraph (1) (as 
modified by subclause (I)) shall be reduced by the 
credit allowed under subsection (a) for the taxable 
year (other than the eligible small business 
credits). 
‘‘(B) ELIGIBLE SMALL BUSINESS CREDITS.—For purposes 
of this subsection, the term ‘eligible small business credits’ 
means the sum of the credits listed in subsection (b) which 
are determined for the taxable year with respect to an 
eligible small business. Such credits shall not be taken 
into account under paragraph (2), (3), or (4). 
‘‘(C) ELIGIBLE SMALL BUSINESS.—For purposes of this 
subsection, the term ‘eligible small business’ means, with 
respect to any taxable year— 
‘‘(i) a corporation the stock of which is not publicly 
traded, 
‘‘(ii) a partnership, or 
‘‘(iii) a sole proprietorship, 
if the average annual gross receipts of such corporation, 
partnership, or sole proprietorship for the 3-taxable-year 
period preceding such taxable year does not exceed 
$50,000,000. For purposes of applying the test under the 
preceding sentence, rules similar to the rules of paragraphs 
(2) and (3) of section 448(c) shall apply. 
‘‘(D) TREATMENT
OF
PARTNERS
AND
S
CORPORATION 
SHAREHOLDERS.—Credits determined with respect to a part-
nership or S corporation shall not be treated as eligible 
small business credits by any partner or shareholder unless 
such partner or shareholder meets the gross receipts test 
under subparagraph (C) for the taxable year in which such 
credits are treated as current year business credits.’’. 
(b) TECHNICAL AMENDMENT.—Section 55(e)(5) of the Internal 
Revenue Code of 1986 is amended by striking ‘‘38(c)(3)(B)’’ and 
inserting ‘‘38(c)(6)(B)’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Subclause (II) of section 38(c)(2)(A)(ii) of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘the eligible 
small business credits,’’ after ‘‘the New York Liberty Zone busi-
ness employee credit,’’.
H. R. 5297—53 
(2) Subclause (II) of section 38(c)(3)(A)(ii) of such Code 
is amended by inserting ‘‘, the eligible small business credits,’’ 
after ‘‘the New York Liberty Zone business employee credit’’. 
(3) Subclause (II) of section 38(c)(4)(A)(ii) of such Code 
is amended by inserting ‘‘the eligible small business credits 
and’’ before ‘‘the specified credits’’. 
(d) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to credits determined in taxable years beginning 
after December 31, 2009, and to carrybacks of such credits. 
SEC. 2014. TEMPORARY REDUCTION IN RECOGNITION PERIOD FOR 
BUILT-IN GAINS TAX. 
(a) IN GENERAL.—Subparagraph (B) of section 1374(d)(7) of 
the Internal Revenue Code of 1986 is amended to read as follows: 
‘‘(B) SPECIAL RULES FOR 2009, 2010, AND 2011.—No tax 
shall be imposed on the net recognized built-in gain of 
an S corporation— 
‘‘(i) in the case of any taxable year beginning in 
2009 or 2010, if the 7th taxable year in the recognition 
period preceded such taxable year, or 
‘‘(ii) in the case of any taxable year beginning 
in 2011, if the 5th year in the recognition period pre-
ceded such taxable year. 
The preceding sentence shall be applied separately with 
respect to any asset to which paragraph (8) applies.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2010. 
PART II—ENCOURAGING INVESTMENT 
SEC. 2021. INCREASED EXPENSING LIMITATIONS FOR 2010 AND 2011; 
CERTAIN REAL PROPERTY TREATED AS SECTION 179 
PROPERTY. 
(a) INCREASED LIMITATIONS.—Subsection (b) of section 179 of 
the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘shall not exceed’’ and all that follows in 
paragraph (1) and inserting ‘‘shall not exceed— 
‘‘(A) $250,000 in the case of taxable years beginning 
after 2007 and before 2010, 
‘‘(B) $500,000 in the case of taxable years beginning 
in 2010 or 2011, and 
‘‘(C) $25,000 in the case of taxable years beginning 
after 2011.’’, and 
(2) by striking ‘‘exceeds’’ and all that follows in paragraph 
(2) and inserting ‘‘exceeds— 
‘‘(A) $800,000 in the case of taxable years beginning 
after 2007 and before 2010, 
‘‘(B) $2,000,000 in the case of taxable years beginning 
in 2010 or 2011, and 
‘‘(C) $200,000 in the case of taxable years beginning 
after 2011.’’. 
(b) INCLUSION OF CERTAIN REAL PROPERTY.—Section 179 of 
the Internal Revenue Code of 1986 is amended by adding at the 
end the following new subsection: 
‘‘(f) SPECIAL RULES FOR QUALIFIED REAL PROPERTY.— 
‘‘(1) IN GENERAL.—If a taxpayer elects the application of 
this subsection for any taxable year beginning in 2010 or 2011,
H. R. 5297—54 
the term ‘section 179 property’ shall include any qualified real 
property which is— 
‘‘(A) of a character subject to an allowance for deprecia-
tion, 
‘‘(B) acquired by purchase for use in the active conduct 
of a trade or business, and 
‘‘(C) not described in the last sentence of subsection 
(d)(1). 
‘‘(2) QUALIFIED REAL PROPERTY.—For purposes of this sub-
section, the term ‘qualified real property’ means— 
‘‘(A) 
qualified 
leasehold 
improvement 
property 
described in section 168(e)(6), 
‘‘(B) qualified restaurant property described in section 
168(e)(7) (without regard to the dates specified in subpara-
graph (A)(i) thereof), and 
‘‘(C) qualified retail improvement property described 
in section 168(e)(8) (without regard to subparagraph (E) 
thereof). 
‘‘(3) LIMITATION.—For purposes of applying the limitation 
under subsection (b)(1)(B), not more than $250,000 of the aggre-
gate cost which is taken into account under subsection (a) 
for any taxable year may be attributable to qualified real prop-
erty. 
‘‘(4) CARRYOVER LIMITATION.— 
‘‘(A) 
IN
GENERAL.—Notwithstanding 
subsection 
(b)(3)(B), no amount attributable to qualified real property 
may be carried over to a taxable year beginning after 
2011. 
‘‘(B) TREATMENT OF DISALLOWED AMOUNTS.—Except as 
provided in subparagraph (C), to the extent that any 
amount is not allowed to be carried over to a taxable 
year beginning after 2011 by reason of subparagraph (A), 
this title shall be applied as if no election under this 
section had been made with respect to such amount. 
‘‘(C) AMOUNTS CARRIED OVER FROM 2010.—If subpara-
graph (B) applies to any amount (or portion of an amount) 
which is carried over from a taxable year other than the 
taxpayer’s last taxable year beginning in 2011, such 
amount (or portion of an amount) shall be treated for 
purposes of this title as attributable to property placed 
in service on the first day of the taxpayer’s last taxable 
year beginning in 2011. 
‘‘(D) ALLOCATION
OF
AMOUNTS.—For purposes of 
applying this paragraph and subsection (b)(3)(B) to any 
taxable year, the amount which is disallowed under sub-
section (b)(3)(A) for such taxable year which is attributed 
to qualified real property shall be the amount which bears 
the same ratio to the total amount so disallowed as— 
‘‘(i) the aggregate amount attributable to qualified 
real property placed in service during such taxable 
year, increased by the portion of any amount carried 
over to such taxable year from a prior taxable year 
which is attributable to such property, bears to 
‘‘(ii) the total amount of section 179 property placed 
in service during such taxable year, increased by the 
aggregate amount carried over to such taxable year 
from any prior taxable year.
H. R. 5297—55 
For purposes of the preceding sentence, only section 179 
property with respect to which an election was made under 
subsection (c)(1) (determined without regard to subpara-
graph (B) of this paragraph) shall be taken into account.’’. 
(c) REVOCABILITY OF ELECTION.—Paragraph (2) of section 179(c) 
of the Internal Revenue Code of 1986 is amended by striking 
‘‘2011’’ and inserting ‘‘2012’’. 
(d) COMPUTER SOFTWARE TREATED AS 179 PROPERTY.—Clause 
(ii) of section 179(d)(1)(A) is amended by striking ‘‘2011’’ and 
inserting ‘‘2012’’. 
(e) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in paragraph (2), the 
amendments made by this section shall apply to property placed 
in service after December 31, 2009, in taxable years beginning 
after such date. 
(2) EXTENSIONS.—The amendments made by subsections 
(c) and (d) shall apply to taxable years beginning after 
December 31, 2010. 
SEC. 2022. ADDITIONAL FIRST-YEAR DEPRECIATION FOR 50 PERCENT 
OF THE BASIS OF CERTAIN QUALIFIED PROPERTY. 
(a) IN GENERAL.—Paragraph (2) of section 168(k) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘January 1, 2011’’ in subparagraph (A)(iv) 
and inserting ‘‘January 1, 2012’’, and 
(2) by striking ‘‘January 1, 2010’’ each place it appears 
and inserting ‘‘January 1, 2011’’. 
(b) CONFORMING AMENDMENTS.— 
(1) The heading for subsection (k) of section 168 of the 
Internal Revenue Code of 1986 is amended by striking 
‘‘JANUARY 1, 2010’’ and inserting ‘‘JANUARY 1, 2011’’. 
(2) The heading for clause (ii) of section 168(k)(2)(B) of 
such Code is amended by striking ‘‘PRE-JANUARY 1, 2010’’ and 
inserting ‘‘PRE-JANUARY 1, 2011’’. 
(3) Subparagraph (D) of section 168(k)(4) of such Code 
is amended by striking ‘‘and’’ at the end of clause (ii), by 
striking the period at the end of clause (iii) and inserting 
a comma, and by adding at the end the following new clauses: 
‘‘(iv) ‘January 1, 2011’ shall be substituted for 
‘January 1, 2012’ in subparagraph (A)(iv) thereof, and 
‘‘(v) ‘January 1, 2010’ shall be substituted for 
‘January 1, 2011’ each place it appears in subpara-
graph (A) thereof.’’. 
(4) Subparagraph (B) of section 168(l)(5) of such Code is 
amended by striking ‘‘January 1, 2010’’ and inserting ‘‘January 
1, 2011’’. 
(5) Subparagraph (C) of section 168(n)(2) of such Code 
is amended by striking ‘‘January 1, 2010’’ and inserting 
‘‘January 1, 2011’’. 
(6) Subparagraph (D) of section 1400L(b)(2) of such Code 
is amended by striking ‘‘January 1, 2010’’ and inserting 
‘‘January 1, 2011’’. 
(7) Subparagraph (B) of section 1400N(d)(3) of such Code 
is amended by striking ‘‘January 1, 2010’’ and inserting 
‘‘January 1, 2011’’.
H. R. 5297—56 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to property placed in service after December 31, 2009, 
in taxable years ending after such date. 
SEC. 2023. SPECIAL RULE FOR LONG-TERM CONTRACT ACCOUNTING. 
(a) IN GENERAL.—Section 460(c) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new para-
graph: 
‘‘(6) SPECIAL RULE FOR ALLOCATION OF BONUS DEPRECIATION 
WITH RESPECT TO CERTAIN PROPERTY.— 
‘‘(A) IN GENERAL.—Solely for purposes of determining 
the percentage of completion under subsection (b)(1)(A), 
the cost of qualified property shall be taken into account 
as a cost allocated to the contract as if subsection (k) 
of section 168 had not been enacted. 
‘‘(B) QUALIFIED PROPERTY.—For purposes of this para-
graph, the term ‘qualified property’ means property 
described in section 168(k)(2) which— 
‘‘(i) has a recovery period of 7 years or less, and 
‘‘(ii) is placed in service after December 31, 2009, 
and before January 1, 2011 (January 1, 2012, in the 
case of property described in section 168(k)(2)(B)).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to property placed in service after December 31, 2009. 
PART III—PROMOTING ENTREPRENEURSHIP 
SEC. 2031. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR 
START-UP EXPENDITURES IN 2010. 
(a) START-UP EXPENDITURES.—Subsection (b) of section 195 of 
the Internal Revenue Code of 1986 is amended by adding at the 
end the following new paragraph: 
‘‘(3) SPECIAL RULE FOR TAXABLE YEARS BEGINNING IN 2010.— 
In the case of a taxable year beginning in 2010, paragraph 
(1)(A)(ii) shall be applied— 
‘‘(A) by substituting ‘$10,000’ for ‘$5,000’, and 
‘‘(B) by substituting ‘$60,000’ for ‘$50,000’.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to amounts paid or incurred in taxable years beginning 
after December 31, 2009. 
SEC. 2032. AUTHORIZATION OF APPROPRIATIONS FOR THE UNITED 
STATES TRADE REPRESENTATIVE TO DEVELOP MARKET 
ACCESS OPPORTUNITIES FOR UNITED STATES SMALL- 
AND MEDIUM-SIZED BUSINESSES AND TO ENFORCE 
TRADE AGREEMENTS. 
(a) IN GENERAL.—There are authorized to be appropriated to 
the Office of the United States Trade Representative $5,230,000, 
to remain available until expended, for— 
(1) analyzing and developing opportunities for businesses 
in the United States to access the markets of foreign countries; 
and 
(2) enforcing trade agreements to which the United States 
is a party. 
(b) REQUIREMENTS.—In obligating and expending the funds 
authorized to be appropriated under subsection (a), the United 
States Trade Representative shall—
H. R. 5297—57 
(1) give preference to those initiatives that the United 
States Trade Representative determines will create or sustain 
the greatest number of jobs in the United States or result 
in the greatest benefit to the economy of the United States; 
and 
(2) consider the needs of small- and medium-sized 
businesses in the United States with respect to— 
(A) accessing the markets of foreign countries; and 
(B) the enforcement of trade agreements to which the 
United States is a party. 
PART IV—PROMOTING SMALL BUSINESS 
FAIRNESS 
SEC. 2041. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE 
REPORTABLE TRANSACTIONS BASED ON RESULTING TAX 
BENEFITS. 
(a) IN GENERAL.—Subsection (b) of section 6707A of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(b) AMOUNT OF PENALTY.— 
‘‘(1) IN GENERAL.—Except as otherwise provided in this 
subsection, the amount of the penalty under subsection (a) 
with respect to any reportable transaction shall be 75 percent 
of the decrease in tax shown on the return as a result of 
such transaction (or which would have resulted from such trans-
action if such transaction were respected for Federal tax pur-
poses). 
‘‘(2) MAXIMUM PENALTY.—The amount of the penalty under 
subsection (a) with respect to any reportable transaction shall 
not exceed— 
‘‘(A) in the case of a listed transaction, $200,000 
($100,000 in the case of a natural person), or 
‘‘(B) in the case of any other reportable transaction, 
$50,000 ($10,000 in the case of a natural person). 
‘‘(3) MINIMUM PENALTY.—The amount of the penalty under 
subsection (a) with respect to any transaction shall not be 
less than $10,000 ($5,000 in the case of a natural person).’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to penalties assessed after December 31, 2006. 
SEC. 2042. DEDUCTION FOR HEALTH INSURANCE COSTS IN COM-
PUTING SELF-EMPLOYMENT TAXES IN 2010. 
(a) IN GENERAL.—Paragraph (4) of section 162(l) of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘for taxable years 
beginning before January 1, 2010, or after December 31, 2010’’ 
before the period. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2009. 
SEC. 2043. REMOVAL OF CELLULAR TELEPHONES AND SIMILAR TELE-
COMMUNICATIONS EQUIPMENT FROM LISTED PROPERTY. 
(a) IN GENERAL.—Subparagraph (A) of section 280F(d)(4) of 
the Internal Revenue Code of 1986 (defining listed property) is 
amended by adding ‘‘ ‘and’ ’’ at the end of clause (iv), by striking 
clause (v), and by redesignating clause (vi) as clause (v). 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to taxable years beginning after December 31, 2009.
H. R. 5297—58 
Subtitle B—Revenue Provisions 
PART I—REDUCING THE TAX GAP 
SEC. 2101. INFORMATION REPORTING FOR RENTAL PROPERTY 
EXPENSE PAYMENTS. 
(a) IN GENERAL.—Section 6041 of the Internal Revenue Code 
of 1986, as amended by section 9006 of the Patient Protection 
and Affordable Care Act, is amended by redesignating subsections 
(h) and (i) as subsections (i) and (j), respectively, and by inserting 
after subsection (g) the following new subsection: 
‘‘(h) TREATMENT OF RENTAL PROPERTY EXPENSE PAYMENTS.— 
‘‘(1) IN
GENERAL.—Solely for purposes of subsection (a) 
and except as provided in paragraph (2), a person receiving 
rental income from real estate shall be considered to be engaged 
in a trade or business of renting property. 
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not apply to— 
‘‘(A) any individual, including any individual who is 
an active member of the uniformed services or an employee 
of the intelligence community (as defined in section 
121(d)(9)(C)(iv)), if substantially all rental income is derived 
from renting the principal residence (within the meaning 
of section 121) of such individual on a temporary basis, 
‘‘(B) any individual who receives rental income of not 
more than the minimal amount, as determined under regu-
lations prescribed by the Secretary, and 
‘‘(C) any other individual for whom the requirements 
of this section would cause hardship, as determined under 
regulations prescribed by the Secretary.’’. 
(b) EFFECTIVE DATE.—The amendments made by subsection 
(a) shall apply to payments made after December 31, 2010. 
SEC. 2102. INCREASE IN INFORMATION RETURN PENALTIES. 
(a) FAILURE TO FILE CORRECT INFORMATION RETURNS.— 
(1) IN GENERAL.—Subsections (a)(1), (b)(1)(A), and (b)(2)(A) 
of section 6721 of the Internal Revenue Code of 1986 are 
each amended by striking ‘‘$50’’ and inserting ‘‘$100’’. 
(2) AGGREGATE
ANNUAL
LIMITATION.—Subsections (a)(1), 
(d)(1)(A), and (e)(3)(A) of section 6721 of such Code are each 
amended by striking ‘‘$250,000’’ and inserting ‘‘$1,500,000’’. 
(b) REDUCTION WHERE CORRECTION WITHIN 30 DAYS.— 
(1) IN GENERAL.—Subparagraph (A) of section 6721(b)(1) 
of the Internal Revenue Code of 1986 is amended by striking 
‘‘$15’’ and inserting ‘‘$30’’. 
(2) AGGREGATE ANNUAL LIMITATION.—Subsections (b)(1)(B) 
and (d)(1)(B) of section 6721 of such Code are each amended 
by striking ‘‘$75,000’’ and inserting ‘‘$250,000’’. 
(c) REDUCTION WHERE CORRECTION
ON
OR BEFORE AUGUST 
1.— 
(1) IN GENERAL.—Subparagraph (A) of section 6721(b)(2) 
of the Internal Revenue Code of 1986 is amended by striking 
‘‘$30’’ and inserting ‘‘$60’’. 
(2) AGGREGATE ANNUAL LIMITATION.—Subsections (b)(2)(B) 
and (d)(1)(C) of section 6721 of such Code are each amended 
by striking ‘‘$150,000’’ and inserting ‘‘$500,000’’. 
(d) AGGREGATE ANNUAL LIMITATIONS FOR PERSONS WITH GROSS 
RECEIPTS OF NOT MORE THAN $5,000,000.—
H. R. 5297—59 
(1) IN GENERAL.—Paragraph (1) of section 6721(d) of the 
Internal Revenue Code of 1986 is amended— 
(A) by striking ‘‘$100,000’’ in subparagraph (A) and 
inserting ‘‘$500,000’’, 
(B) by striking ‘‘$25,000’’ in subparagraph (B) and 
inserting ‘‘$75,000’’, and 
(C) by striking ‘‘$50,000’’ in subparagraph (C) and 
inserting ‘‘$200,000’’. 
(2) TECHNICAL
AMENDMENT.—Paragraph (1) of section 
6721(d) of such Code is amended by striking ‘‘such taxable 
year’’ and inserting ‘‘such calendar year’’. 
(e) PENALTY IN CASE OF INTENTIONAL DISREGARD.—Paragraph 
(2) of section 6721(e) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘$100’’ and inserting ‘‘$250’’. 
(f) ADJUSTMENT FOR INFLATION.—Section 6721 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following 
new subsection: 
‘‘(f) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—For each fifth calendar year beginning 
after 2012, each of the dollar amounts under subsections (a), 
(b), (d) (other than paragraph (2)(A) thereof), and (e) shall 
be increased by such dollar amount multiplied by the cost- 
of-living adjustment determined under section 1(f)(3) deter-
mined by substituting ‘calendar year 2011’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
‘‘(2) ROUNDING.—If any amount adjusted under paragraph 
(1)— 
‘‘(A) is not less than $75,000 and is not a multiple 
of $500, such amount shall be rounded to the next lowest 
multiple of $500, and 
‘‘(B) is not described in subparagraph (A) and is not 
a multiple of $10, such amount shall be rounded to the 
next lowest multiple of $10.’’. 
(g) FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.—Section 
6722 of the Internal Revenue Code of 1986 is amended to read 
as follows: 
‘‘SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS. 
‘‘(a) IMPOSITION OF PENALTY.— 
‘‘(1) GENERAL RULE.—In the case of each failure described 
in paragraph (2) by any person with respect to a payee state-
ment, such person shall pay a penalty of $100 for each state-
ment with respect to which such a failure occurs, but the 
total amount imposed on such person for all such failures 
during any calendar year shall not exceed $1,500,000. 
‘‘(2) FAILURES SUBJECT TO PENALTY.—For purposes of para-
graph (1), the failures described in this paragraph are— 
‘‘(A) any failure to furnish a payee statement on or 
before the date prescribed therefor to the person to whom 
such statement is required to be furnished, and 
‘‘(B) any failure to include all of the information 
required to be shown on a payee statement or the inclusion 
of incorrect information. 
‘‘(b) REDUCTION WHERE CORRECTION IN SPECIFIED PERIOD.— 
‘‘(1) CORRECTION WITHIN 30 DAYS.—If any failure described 
in subsection (a)(2) is corrected on or before the day 30 days 
after the required filing date—
H. R. 5297—60 
‘‘(A) the penalty imposed by subsection (a) shall be 
$30 in lieu of $100, and 
‘‘(B) the total amount imposed on the person for all 
such failures during any calendar year which are so cor-
rected shall not exceed $250,000. 
‘‘(2) FAILURES
CORRECTED
ON
OR
BEFORE
AUGUST
1.—If 
any failure described in subsection (a)(2) is corrected after 
the 30th day referred to in paragraph (1) but on or before 
August 1 of the calendar year in which the required filing 
date occurs— 
‘‘(A) the penalty imposed by subsection (a) shall be 
$60 in lieu of $100, and 
‘‘(B) the total amount imposed on the person for all 
such failures during the calendar year which are so cor-
rected shall not exceed $500,000. 
‘‘(c) EXCEPTION FOR DE MINIMIS FAILURES.— 
‘‘(1) IN GENERAL.—If— 
‘‘(A) a payee statement is furnished to the person to 
whom such statement is required to be furnished, 
‘‘(B) there is a failure described in subsection (a)(2)(B) 
(determined after the application of section 6724(a)) with 
respect to such statement, and 
‘‘(C) such failure is corrected on or before August 1 
of the calendar year in which the required filing date 
occurs, 
for purposes of this section, such statement shall be treated 
as having been furnished with all of the correct required 
information. 
‘‘(2) LIMITATION.—The number of payee statements to 
which paragraph (1) applies for any calendar year shall not 
exceed the greater of— 
‘‘(A) 10, or 
‘‘(B) one-half of 1 percent of the total number of payee 
statements required to be filed by the person during the 
calendar year. 
‘‘(d) LOWER LIMITATIONS FOR PERSONS WITH GROSS RECEIPTS 
OF NOT MORE THAN $5,000,000.— 
‘‘(1) IN GENERAL.—If any person meets the gross receipts 
test of paragraph (2) with respect to any calendar year, with 
respect to failures during such calendar year— 
‘‘(A) subsection (a)(1) shall be applied by substituting 
‘$500,000’ for ‘$1,500,000’, 
‘‘(B) subsection (b)(1)(B) shall be applied by sub-
stituting ‘$75,000’ for ‘$250,000’, and 
‘‘(C) subsection (b)(2)(B) shall be applied by sub-
stituting ‘$200,000’ for ‘$500,000’. 
‘‘(2) GROSS
RECEIPTS
TEST.—A person meets the gross 
receipts test of this paragraph if such person meets the gross 
receipts test of section 6721(d)(2). 
‘‘(e) PENALTY IN CASE OF INTENTIONAL DISREGARD.—If 1 or 
more failures to which subsection (a) applies are due to intentional 
disregard of the requirement to furnish a payee statement (or 
the correct information reporting requirement), then, with respect 
to each such failure— 
‘‘(1) subsections (b), (c), and (d) shall not apply, 
‘‘(2) the penalty imposed under subsection (a)(1) shall be 
$250, or, if greater—
H. R. 5297—61 
‘‘(A) in the case of a payee statement other than a 
statement required under section 6045(b), 6041A(e) (in 
respect of a return required under section 6041A(b)), 
6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of 
the aggregate amount of the items required to be reported 
correctly, or 
‘‘(B) in the case of a payee statement required under 
section 6045(b), 6050K(b), or 6050L(c), 5 percent of the 
aggregate amount of the items required to be reported 
correctly, and 
‘‘(3) in the case of any penalty determined under paragraph 
(2)— 
‘‘(A) the $1,500,000 limitation under subsection (a) 
shall not apply, and 
‘‘(B) such penalty shall not be taken into account in 
applying such limitation to penalties not determined under 
paragraph (2). 
‘‘(f) ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—For each fifth calendar year beginning 
after 2012, each of the dollar amounts under subsections (a), 
(b), (d)(1), and (e) shall be increased by such dollar amount 
multiplied by the cost-of-living adjustment determined under 
section 1(f)(3) determined by substituting ‘calendar year 2011’ 
for ‘calendar year 1992’ in subparagraph (B) thereof. 
‘‘(2) ROUNDING.—If any amount adjusted under paragraph 
(1)— 
‘‘(A) is not less than $75,000 and is not a multiple 
of $500, such amount shall be rounded to the next lowest 
multiple of $500, and 
‘‘(B) is not described in subparagraph (A) and is not 
a multiple of $10, such amount shall be rounded to the 
next lowest multiple of $10.’’. 
(h) EFFECTIVE DATE.—The amendments made by this section 
shall apply with respect to information returns required to be 
filed on or after January 1, 2011. 
SEC. 2103. REPORT ON TAX SHELTER PENALTIES AND CERTAIN OTHER 
ENFORCEMENT ACTIONS. 
(a) IN GENERAL.—The Commissioner of Internal Revenue, in 
consultation with the Secretary of the Treasury, shall submit to 
the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate an annual report 
on the penalties assessed by the Internal Revenue Service during 
the preceding year under each of the following provisions of the 
Internal Revenue Code of 1986: 
(1) Section 6662A (relating to accuracy-related penalty on 
understatements with respect to reportable transactions). 
(2) Section 6700(a) (relating to promoting abusive tax shel-
ters). 
(3) Section 6707 (relating to failure to furnish information 
regarding reportable transactions). 
(4) Section 6707A (relating to failure to include reportable 
transaction information with return). 
(5) Section 6708 (relating to failure to maintain lists of 
advisees with respect to reportable transactions).
H. R. 5297—62 
(b) ADDITIONAL INFORMATION.—The report required under sub-
section (a) shall also include information on the following with 
respect to each year: 
(1) Any action taken under section 330(b) of title 31, United 
States Code, with respect to any reportable transaction (as 
defined in section 6707A(c) of the Internal Revenue Code of 
1986). 
(2) Any extension of the time for assessment of tax enforced, 
or assessment of any amount under such an extension, under 
paragraph (10) of section 6501(c) of the Internal Revenue Code 
of 1986. 
(c) DATE OF REPORT.—The first report required under sub-
section (a) shall be submitted not later than December 31, 2010. 
SEC. 2104. APPLICATION OF CONTINUOUS LEVY TO TAX LIABILITIES 
OF CERTAIN FEDERAL CONTRACTORS. 
(a) IN GENERAL.—Subsection (f) of section 6330 of the Internal 
Revenue Code of 1986 is amended by striking ‘‘or’’ at the end 
of paragraph (2), by inserting ‘‘or’’ at the end of paragraph (3), 
and by inserting after paragraph (3) the following new paragraph: 
‘‘(4) the Secretary has served a Federal contractor levy,’’. 
(b) FEDERAL CONTRACTOR LEVY.—Subsection (h) of section 6330 
of the Internal Revenue Code of 1986 is amended— 
(1) by striking all that precedes ‘‘any levy in connection 
with the collection’’ and inserting the following: 
‘‘(h) DEFINITIONS RELATED TO EXCEPTIONS.—For purposes of 
subsection (f)— 
‘‘(1) DISQUALIFIED EMPLOYMENT TAX LEVY.—A disqualified 
employment tax levy is’’; and 
(2) by adding at the end the following new paragraph: 
‘‘(2) FEDERAL CONTRACTOR LEVY.—A Federal contractor levy 
is any levy if the person whose property is subject to the 
levy (or any predecessor thereof) is a Federal contractor.’’. 
(c) CONFORMING AMENDMENT.—The heading of subsection (f) 
of section 6330 of the Internal Revenue Code of 1986 is amended 
by striking ‘‘JEOPARDY
AND
STATE
REFUND
COLLECTION’’ and 
inserting ‘‘EXCEPTIONS’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to levies issued after the date of the enactment of 
this Act. 
PART II—PROMOTING RETIREMENT 
PREPARATION 
SEC. 2111. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS 
ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH 
CONTRIBUTIONS. 
(a) IN GENERAL.—Section 402A(e)(1) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the end of subpara-
graph (A), by striking the period at the end of subparagraph (B) 
and inserting ‘‘, and’’, and by adding at the end the following: 
‘‘(C) an eligible deferred compensation plan (as defined 
in section 457(b)) of an eligible employer described in sec-
tion 457(e)(1)(A).’’. 
(b) ELECTIVE DEFERRALS.—Section 402A(e)(2) of the Internal 
Revenue Code of 1986 is amended to read as follows:
H. R. 5297—63 
‘‘(2) ELECTIVE
DEFERRAL.—The term ‘elective deferral’ 
means— 
‘‘(A) any elective deferral described in subparagraph 
(A) or (C) of section 402(g)(3), and 
‘‘(B) any elective deferral of compensation by an indi-
vidual under an eligible deferred compensation plan (as 
defined in section 457(b)) of an eligible employer described 
in section 457(e)(1)(A).’’. 
(c) EFFECTIVE DATE.—The amendments made by this section 
shall apply to taxable years beginning after December 31, 2010. 
SEC. 2112. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO DES-
IGNATED ROTH ACCOUNTS. 
(a) IN GENERAL.—Section 402A(c) of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new para-
graph: 
‘‘(4) TAXABLE ROLLOVERS TO DESIGNATED ROTH ACCOUNTS.— 
‘‘(A) IN
GENERAL.—Notwithstanding sections 402(c), 
403(b)(8), and 457(e)(16), in the case of any distribution 
to which this paragraph applies— 
‘‘(i) there shall be included in gross income any 
amount which would be includible were it not part 
of a qualified rollover contribution, 
‘‘(ii) section 72(t) shall not apply, and 
‘‘(iii) unless the taxpayer elects not to have this 
clause apply, any amount required to be included in 
gross income for any taxable year beginning in 2010 
by reason of this paragraph shall be so included ratably 
over the 2-taxable-year period beginning with the first 
taxable year beginning in 2011. 
Any election under clause (iii) for any distributions during 
a taxable year may not be changed after the due date 
for such taxable year. 
‘‘(B) DISTRIBUTIONS TO WHICH PARAGRAPH APPLIES.— 
In the case of an applicable retirement plan which includes 
a qualified Roth contribution program, this paragraph shall 
apply to a distribution from such plan other than from 
a designated Roth account which is contributed in a quali-
fied rollover contribution (within the meaning of section 
408A(e)) to the designated Roth account maintained under 
such plan for the benefit of the individual to whom the 
distribution is made. 
‘‘(C) COORDINATION WITH LIMIT.—Any distribution to 
which this paragraph applies shall not be taken into 
account for purposes of paragraph (1). 
‘‘(D) OTHER RULES.—The rules of subparagraphs (D), 
(E), and (F) of section 408A(d)(3) (as in effect for taxable 
years beginning after 2009) shall apply for purposes of 
this paragraph.’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to distributions after the date of the enactment of 
this Act. 
SEC. 2113. SPECIAL RULES FOR ANNUITIES RECEIVED FROM ONLY 
A PORTION OF A CONTRACT. 
(a) IN GENERAL.—Subsection (a) of section 72 of the Internal 
Revenue Code of 1986 is amended to read as follows: 
‘‘(a) GENERAL RULES FOR ANNUITIES.—
H. R. 5297—64 
‘‘(1) INCOME INCLUSION.—Except as otherwise provided in 
this chapter, gross income includes any amount received as 
an annuity (whether for a period certain or during one or 
more lives) under an annuity, endowment, or life insurance 
contract. 
‘‘(2) PARTIAL ANNUITIZATION.—If any amount is received 
as an annuity for a period of 10 years or more or during 
one or more lives under any portion of an annuity, endowment, 
or life insurance contract— 
‘‘(A) such portion shall be treated as a separate contract 
for purposes of this section, 
‘‘(B) for purposes of applying subsections (b), (c), and 
(e), the investment in the contract shall be allocated pro 
rata between each portion of the contract from which 
amounts are received as an annuity and the portion of 
the contract from which amounts are not received as an 
annuity, and 
‘‘(C) a separate annuity starting date under subsection 
(c)(4) shall be determined with respect to each portion 
of the contract from which amounts are received as an 
annuity.’’. 
(b) EFFECTIVE DATE.—The amendment made by this section 
shall apply to amounts received in taxable years beginning after 
December 31, 2010. 
PART III—CLOSING UNINTENDED LOOPHOLES 
SEC. 2121. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL 
PRODUCER CREDIT. 
(a) IN GENERAL.—Clause (iii) of section 40(b)(6)(E) of the 
Internal Revenue Code of 1986, as added by the Health Care 
and Education Reconciliation Act of 2010, is amended— 
(1) by striking ‘‘or’’ at the end of subclause (I), 
(2) by striking the period at the end of subclause (II) 
and inserting ‘‘, or’’, 
(3) by adding at the end the following new subclause: 
‘‘(III) such fuel has an acid number greater 
than 25.’’, and 
(4) by striking ‘‘UNPROCESSED’’ in the heading and inserting 
‘‘CERTAIN’’. 
(b) EFFECTIVE DATE.—The amendments made by this section 
shall apply to fuels sold or used on or after January 1, 2010. 
SEC. 2122. SOURCE RULES FOR INCOME ON GUARANTEES. 
(a) AMOUNTS SOURCED WITHIN
THE UNITED STATES.—Sub-
section (a) of section 861 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new paragraph: 
‘‘(9) GUARANTEES.—Amounts received, directly or indirectly, 
from— 
‘‘(A) a noncorporate resident or domestic corporation 
for the provision of a guarantee of any indebtedness of 
such resident or corporation, or 
‘‘(B) any foreign person for the provision of a guarantee 
of any indebtedness of such person, if such amount is 
connected with income which is effectively connected (or 
treated as effectively connected) with the conduct of a 
trade or business in the United States.’’.
H. R. 5297—65 
(b) AMOUNTS SOURCED WITHOUT THE UNITED STATES.—Sub-
section (a) of section 862 of the Internal Revenue Code of 1986 
is amended by striking ‘‘and’’ at the end of paragraph (7), by 
striking the period at the end of paragraph (8) and inserting ‘‘; 
and’’, and by adding at the end the following new paragraph: 
‘‘(9) amounts received, directly or indirectly, from a foreign 
person for the provision of a guarantee of indebtedness of 
such person other than amounts which are derived from sources 
within the United States as provided in section 861(a)(9).’’. 
(c) 
CONFORMING
AMENDMENT.—Clause 
(ii) 
of 
section 
864(c)(4)(B) of the Internal Revenue Code of 1986 is amended 
by striking ‘‘dividends or interest’’ and inserting ‘‘dividends, interest, 
or amounts received for the provision of guarantees of indebted-
ness’’. 
(d) EFFECTIVE DATE.—The amendments made by this section 
shall apply to guarantees issued after the date of the enactment 
of this Act. 
PART IV—TIME FOR PAYMENT OF CORPORATE 
ESTIMATED TAXES 
SEC. 2131. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES. 
The percentage under paragraph (2) of section 561 of the Hiring 
Incentives to Restore Employment Act in effect on the date of 
the enactment of this Act is increased by 36 percentage points. 
TITLE III—STATE SMALL BUSINESS 
CREDIT INITIATIVE 
SEC. 3001. SHORT TITLE. 
This title may be cited as the ‘‘State Small Business Credit 
Initiative Act of 2010’’. 
SEC. 3002. DEFINITIONS. 
In this title, the following definitions shall apply: 
(1) APPROPRIATE
COMMITTEES
OF
CONGRESS.—The term 
‘‘appropriate committees of Congress’’ means— 
(A) 
the 
Committee 
on 
Small 
Business 
and 
Entrepreneurship, the Committee on Agriculture, Nutri-
tion, and Forestry, the Committee on Banking, Housing, 
and Urban Affairs, the Committee on Finance, the Com-
mittee on the Budget, and the Committee on Appropria-
tions of the Senate; and 
(B) the Committee on Small Business, the Committee 
on Agriculture, the Committee on Financial Services, the 
Committee on Ways and Means, the Committee on the 
Budget, and the Committee on Appropriations of the House 
of Representatives. 
(2) APPROPRIATE
FEDERAL
BANKING
AGENCY.—The term 
‘‘appropriate Federal banking agency’’— 
(A) has the same meaning as in section 3(q) of the 
Federal Deposit Insurance Act (12 U.S.C. 1813(q)); and 
(B) includes the National Credit Union Administration 
Board in the case of any credit union the deposits of which
H. R. 5297—66 
are insured in accordance with the Federal Credit Union 
Act. 
(3) ENROLLED LOAN.—The term ‘‘enrolled loan’’ means a 
loan made by a financial institution lender that is enrolled 
by a participating State in an approved State capital access 
program in accordance with this title. 
(4) FEDERAL CONTRIBUTION.—The term ‘‘Federal contribu-
tion’’ means the portion of the contribution made by a partici-
pating State to, or for the account of, an approved State pro-
gram that is made with Federal funds allocated to the State 
by the Secretary under section 3003. 
(5) FINANCIAL INSTITUTION.—The term ‘‘financial institu-
tion’’ means any insured depository institution, insured credit 
union, or community development financial institution, as those 
terms are each defined in section 103 of the Riegle Community 
Development and Regulatory Improvement Act of 1994 (12 
U.S.C. 4702). 
(6) PARTICIPATING STATE.—The term ‘‘participating State’’ 
means any State that has been approved for participation in 
the Program under section 3004. 
(7) PROGRAM.—The term ‘‘Program’’ means the State Small 
Business Credit Initiative established under this title. 
(8) QUALIFYING
LOAN
OR
SWAP
FUNDING
FACILITY.—The 
term ‘‘qualifying loan or swap funding facility’’ means a contrac-
tual 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 arrange-
ment, is contributed to, or for the account of, an approved 
State program. 
(9) RESERVE FUND.—The term ‘‘reserve fund’’ means a fund, 
established by a participating State, dedicated to a particular 
financial institution lender, for the purposes of— 
(A) depositing all required premium charges paid by 
the financial institution lender and by each borrower 
receiving a loan under an approved State program from 
that financial institution lender; 
(B) depositing contributions made by the participating 
State, including State contributions made with Federal 
contributions; and 
(C) covering losses on enrolled loans by disbursing 
accumulated funds. 
(10) STATE.—The term ‘‘State’’ means— 
(A) a State of the United States; 
(B) the District of Columbia, the Commonwealth of 
Puerto Rico, the Commonwealth of Northern Mariana 
Islands, Guam, American Samoa, and the United States 
Virgin Islands; 
(C) when designated by a State of the United States, 
a political subdivision of that State that the Secretary 
determines has the capacity to participate in the Program; 
and
H. R. 5297—67 
(D) under the circumstances described in section 
3004(d), a municipality of a State of the United States 
to which the Secretary has given a special permission under 
section 3004(d). 
(11) STATE
CAPITAL
ACCESS
PROGRAM.—The term ‘‘State 
capital access program’’ means a program of a State that— 
(A) uses public resources to promote private access 
to credit; and 
(B) meets the eligibility criteria in section 3005(c). 
(12) STATE OTHER CREDIT SUPPORT PROGRAM.—The term 
‘‘State other credit support program’’— 
(A) means a program of a State that— 
(i) uses public resources to promote private access 
to credit; 
(ii) is not a State capital access program; and 
(iii) meets the eligibility criteria in section 3006(c); 
and 
(B) includes, collateral support programs, loan partici-
pation programs, State-run venture capital fund programs, 
and credit guarantee programs. 
(13) STATE PROGRAM.—The term ‘‘State program’’ means 
a State capital access program or a State other credit support 
program. 
(14) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of the Treasury. 
SEC. 3003. FEDERAL FUNDS ALLOCATED TO STATES. 
(a) PROGRAM ESTABLISHED; PURPOSE.—There is established the 
State Small Business Credit Initiative, to be administered by the 
Secretary. Under the Program, the Secretary shall allocate Federal 
funds to participating States and make the allocated funds available 
to the participating States as provided in this section for the uses 
described in this section. 
(b) ALLOCATION FORMULA.— 
(1) IN GENERAL.—Not later than 30 days after the date 
of enactment of this Act, the Secretary shall allocate Federal 
funds to participating States so that each State is eligible 
to receive an amount equal to the average of the respective 
amounts that the State— 
(A) would receive under the 2009 allocation, as deter-
mined under paragraph (2); and 
(B) would receive under the 2010 allocation, as deter-
mined under paragraph (3). 
(2) 2009 ALLOCATION FORMULA.— 
(A) IN GENERAL.—The Secretary shall determine the 
2009 allocation by allocating Federal funds among the 
States in the proportion that each such State’s 2008 State 
employment decline bears to the aggregate of the 2008 
State employment declines for all States. 
(B) MINIMUM ALLOCATION.—The Secretary shall adjust 
the allocations under subparagraph (A) for each State to 
the extent necessary to ensure that no State receives less 
than 0.9 percent of the Federal funds. 
(C) 2008 STATE
EMPLOYMENT
DECLINE
DEFINED.—In 
this paragraph and with respect to a State, the term ‘‘2008 
State employment decline’’ means the excess (if any) of—
H. R. 5297—68 
(i) the number of individuals employed in such 
State determined for December 2007; over 
(ii) the number of individuals employed in such 
State determined for December 2008. 
(3) 2010 ALLOCATION FORMULA.— 
(A) IN GENERAL.—The Secretary shall determine the 
2010 allocation by allocating Federal funds among the 
States in the proportion that each such State’s 2009 
unemployment number bears to the aggregate of the 2009 
unemployment numbers for all of the States. 
(B) MINIMUM ALLOCATION.—The Secretary shall adjust 
the allocations under subparagraph (A) for each State to 
the extent necessary to ensure that no State receives less 
than 0.9 percent of the Federal funds. 
(C) 2009 UNEMPLOYMENT NUMBER DEFINED.—In this 
paragraph and with respect to a State, the term ‘‘2009 
unemployment number’’ means the number of individuals 
within such State who were determined to be unemployed 
by the Bureau of Labor Statistics for December 2009. 
(c) AVAILABILITY OF ALLOCATED AMOUNT.—The amount allo-
cated by the Secretary to each participating State under subsection 
(b) shall be made available to the State as follows: 
(1) ALLOCATED AMOUNT GENERALLY TO BE AVAILABLE TO 
STATE IN ONE-THIRDS.— 
(A) IN GENERAL.—The Secretary shall— 
(i) apportion the participating State’s allocated 
amount into thirds; 
(ii) transfer to the participating State the first 
1⁄3 when the Secretary approves the State for participa-
tion under section 3004; and 
(iii) transfer to the participating State each succes-
sive 1⁄3 when the State has certified to the Secretary 
that it has expended, transferred, or obligated 80 per-
cent of the last transferred 1⁄3 for Federal contributions 
to, or for the account of, State programs. 
(B) AUTHORITY TO WITHHOLD PENDING AUDIT.—The Sec-
retary may withhold the transfer of any successive 1⁄3 
pending results of a financial audit. 
(C) INSPECTOR GENERAL AUDITS.— 
(i) IN
GENERAL.—The Inspector General of the 
Department of the Treasury shall carry out an audit 
of the participating State’s use of allocated Federal 
funds transferred to the State. 
(ii) RECOUPMENT OF MISUSED TRANSFERRED FUNDS 
REQUIRED.—The allocation agreement between the Sec-
retary and the participating State shall provide that 
the Secretary shall recoup any allocated Federal funds 
transferred to the participating State if the results 
of the an audit include a finding that there was an 
intentional or reckless misuse of transferred funds by 
the State. 
(iii) PENALTY
FOR
MISSTATEMENT.—Any partici-
pating State that is found to have intentionally mis-
stated any report issued to the Secretary under the 
Program shall be ineligible to receive any additional 
funds under the Program. Funds that had been allo-
cated or that would otherwise have been allocated to
H. R. 5297—69 
such participating State shall be paid into the general 
fund of the Treasury for reduction of the public debt. 
(iv) MUNICIPALITIES.—In this subparagraph, the 
term ‘‘participating State’’ shall include a municipality 
given special permission to participate in the Program, 
under section 3004(d). 
(D) EXCEPTION.—The Secretary may, in the Secretary’s 
discretion, transfer the full amount of the participating 
State’s allocated amount to the State in a single transfer 
if the participating State applies to the Secretary for 
approval to use the full amount of the allocation as collat-
eral for a qualifying loan or swap funding facility. 
(2) TRANSFERRED AMOUNTS.—Each amount transferred to 
a participating State under this section shall remain available 
to the State until used by the State as permitted under para-
graph (3). 
(3) USE OF TRANSFERRED FUNDS.—Each participating State 
may use funds transferred to it under this section only— 
(A) for making Federal contributions to, or for the 
account of, an approved State program; 
(B) as collateral for a qualifying loan or swap funding 
facility; 
(C) in the case of the first 1⁄3 transferred, for paying 
administrative costs incurred by the State in implementing 
an approved State program in an amount not to exceed 
5 percent of that first 1⁄3; or 
(D) in the case of each successive 1⁄3 transferred, for 
paying administrative costs incurred by the State in imple-
menting an approved State program in an amount not 
to exceed 3 percent of that successive 1⁄3. 
(4) TERMINATION OF AVAILABILITY OF AMOUNTS NOT TRANS-
FERRED 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 Treasury. 
(5) TRANSFERRED AMOUNTS NOT ASSISTANCE.—The amounts 
transferred to a participating State under this section shall 
not be considered assistance for purposes of subtitle V of title 
31, United States Code. 
(6) DEFINITIONS.—In this section— 
(A) the term ‘‘allocated amount’’ means the total 
amount of Federal funds allocated by the Secretary under 
subsection (b) to the participating State; and 
(B) the term ‘‘1⁄3’’ means— 
(i) in the case of the first 1⁄3 and second 1⁄3, an 
amount equal to 33 percent of a participating State’s 
allocated amount; and 
(ii) in the case of the last 1⁄3, an amount equal 
to 34 percent of a participating State’s allocated 
amount.
H. R. 5297—70 
SEC. 3004. APPROVING STATES FOR PARTICIPATION. 
(a) APPLICATION.—Any State may apply to the Secretary for 
approval to be a participating State under the Program and to 
be eligible for an allocation of Federal funds under the Program. 
(b) GENERAL APPROVAL CRITERIA.—The Secretary shall approve 
a State to be a participating State, if— 
(1) a specific department, agency, or political subdivision 
of the State has been designated to implement a State program 
and participate in the Program; 
(2) all legal actions necessary to enable such designated 
department, agency, or political subdivision to implement a 
State program and participate in the Program have been accom-
plished; 
(3) the State has filed an application with the Secretary 
for approval of a State capital access program under section 
3005 or approval as a State other credit support program 
under section 3006, in each case within the time period provided 
in the respective section; and 
(4) the State and the Secretary have executed an allocation 
agreement that— 
(A) conforms to the requirements of this title; 
(B) ensures that the State program complies with such 
national standards as are established by the Secretary 
under section 3009(a)(2); 
(C) sets forth internal control, compliance, and 
reporting requirements as established by the Secretary, 
and such other terms and conditions necessary to carry 
out the purposes of this title, including an agreement by 
the State to allow the Secretary to audit State programs; 
(D) requires that the State program be fully positioned, 
within 90 days of the State’s execution of the allocation 
agreement with the Secretary, to act on providing the 
kind of credit support that the State program was estab-
lished 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 pro-
grams 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 munici-
palities of that State a special permission that will allow them
H. R. 5297—71 
to apply directly to the Secretary without the State for approval 
to be participating municipalities. 
(2) TIMING REQUIREMENTS APPLICABLE TO MUNICIPALITIES 
APPLYING DIRECTLY.—To qualify for the special permission, a 
municipality of a State shall be required, within 12 months 
after the date of enactment of this Act, to file with the Secretary 
a complete application for approval by the Secretary of a State 
program. 
(3) NOTICES OF INTENT AND APPLICATIONS FROM MORE THAN 
1 MUNICIPALITY.—A municipality of a State may combine with 
1 or more other municipalities of that State to file a joint 
notice of intent to file and a joint application. 
(4) APPROVAL CRITERIA.—The general approval criteria in 
paragraphs (2) and (4) shall apply. 
(5) ALLOCATION TO MUNICIPALITIES.— 
(A) IF MORE THAN 3.—If more than 3 municipalities, 
or combination of municipalities as provided in paragraph 
(3), of a State apply for approval by the Secretary to be 
participating municipalities under this subsection, and the 
applications meet the approval criteria in paragraph (4), 
the Secretary shall allocate Federal funds to the 3 munici-
palities 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 PARTICI-
PATING MUNICIPALITIES.—If the Secretary approves municipali-
ties to be participating municipalities under this subsection, 
the Secretary shall apportion the full amount of the Federal 
funds that are allocated to that State to municipalities that 
are approved under this subsection in amounts proportionate 
to the population of those municipalities, based on the most 
recent available decennial census. 
(7) APPROVING STATE PROGRAMS FOR MUNICIPALITIES.—If 
the Secretary approves municipalities to be participating 
municipalities under this subsection, the Secretary shall take 
into account the additional considerations in section 3006(d) 
in making the determination under section 3005 or 3006 that 
the State program or programs to be implemented by the 
participating municipalities, including a State capital access 
program, is eligible for Federal contributions to, or for the 
account of, the State program. 
SEC. 3005. APPROVING STATE CAPITAL ACCESS PROGRAMS. 
(a) APPLICATION.—A participating State that establishes a new, 
or has an existing, State capital access program that meets the 
eligibility criteria in subsection (c) may apply to Secretary to have 
the State capital access program approved as eligible for Federal 
contributions to the reserve fund. 
(b) APPROVAL.—The Secretary shall approve such State capital 
access program as eligible for Federal contributions to the reserve 
fund if—
H. R. 5297—72 
(1) within 60 days after the date of enactment of this 
Act, the State has filed with the Secretary a notice of intent 
to apply for approval by the Secretary of a State capital access 
program; 
(2) within 9 months after the date of enactment of this 
Act, the State has filed with the Secretary a complete applica-
tion for approval by the Secretary of a capital access program; 
(3) the State satisfies the requirements of subsections (a) 
and (b) of section 3004; and 
(4) the State capital access program meets the eligibility 
criteria in subsection (c). 
(c) ELIGIBILITY CRITERIA
FOR STATE CAPITAL ACCESS PRO-
GRAMS.—For a State capital access program to be approved under 
this section, that program shall be required to be a program of 
the State that— 
(1) provides portfolio insurance for business loans based 
on a separate loan-loss reserve fund for each financial institu-
tion; 
(2) requires insurance premiums to be paid by the financial 
institution lenders and by the business borrowers to the reserve 
fund to have their loans enrolled in the reserve fund; 
(3) provides for contributions to be made by the State 
to the reserve fund in amounts at least equal to the sum 
of the amount of the insurance premium charges paid by the 
borrower and the financial institution to the reserve fund for 
any newly enrolled loan; and 
(4) provides its portfolio insurance solely for loans that 
meet both the following requirements: 
(A) The borrower has 500 employees or less at the 
time that the loan is enrolled in the Program. 
(B) The loan amount does not exceed $5,000,000. 
(d) FEDERAL CONTRIBUTIONS
TO APPROVED STATE CAPITAL 
ACCESS PROGRAMS.—A State capital access program approved under 
this section will be eligible for receiving Federal contributions to 
the reserve fund in an amount equal to the sum of the amount 
of the insurance premium charges paid by the borrowers and by 
the financial institution to the reserve fund for loans that meet 
the requirements in subsection (c)(4). A participating State may 
use the Federal contribution to make its contribution to the reserve 
fund of an approved State capital access program. 
(e) MINIMUM PROGRAM REQUIREMENTS
FOR STATE CAPITAL 
ACCESS PROGRAMS.—The Secretary shall, by regulation or other 
guidance, prescribe Program requirements that meet the following 
minimum requirements: 
(1) EXPERIENCE
AND
CAPACITY.—The participating State 
shall determine for each financial institution that participates 
in the State capital access program, after consultation with 
the appropriate Federal banking agency or, in the case of 
a financial institution that is a nondepository community 
development financial institution, the Community Development 
Financial Institution Fund, that the financial institution has 
sufficient commercial lending experience and financial and 
managerial capacity to participate in the approved State capital 
access program. The determination by the State shall not be 
reviewable by the Secretary. 
(2) INVESTMENT AUTHORITY.—Subject to applicable State 
law, the participating State may invest, or cause to be invested,
H. R. 5297—73 
funds held in a reserve fund by establishing a deposit account 
at the financial institution lender in the name of the 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 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 enroll-
ment in the State capital access program shall require the 
financial institution lender to have a meaningful amount of 
its own capital resources at risk in the loan. 
(5) PREMIUM CHARGES MINIMUM AND MAXIMUM AMOUNTS.— 
The insurance premium charges payable to the reserve fund 
by the borrower and the financial institution lender shall be 
prescribed by the financial institution lender, within minimum 
and maximum limits that require that the sum of the insurance 
premium charges paid in connection with a loan by the borrower 
and the financial institution lender may not be less than 2 
percent nor more than 7 percent of the amount of the loan 
enrolled in the approved State capital access program. 
(6) STATE
CONTRIBUTIONS.—In enrolling a loan in an 
approved State capital access program, the participating State 
may make a contribution to the reserve fund to supplement 
Federal contributions made under this Program. 
(7) LOAN PURPOSE.— 
(A) PARTICULAR
LOAN
PURPOSE
REQUIREMENTS
AND 
PROHIBITIONS.—In connection with the filing of a loan for 
enrollment in an approved State capital access program, 
the financial institution lender— 
(i) shall obtain an assurance from each borrower 
that— 
(I) the proceeds of the loan will be used for 
a business purpose; 
(II) the loan will not be used to finance such 
business activities as the Secretary, by regulation, 
may proscribe as prohibited loan purposes for 
enrollment in an approved State capital access 
program; and 
(III) the borrower is not— 
(aa) an executive officer, director, or prin-
cipal 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 execu-
tive officer, director, principal shareholder, or 
member of the immediate family;
H. R. 5297—74 
(ii) shall provide assurances to the participating 
State that the loan has not been made in order to 
place under the protection of the approved State capital 
access program prior debt that is not covered under 
the approved State capital access program and that 
is or was owed by the borrower to the financial institu-
tion 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 eligi-
bility of loans or borrowers that are not inconsistent 
with the provisions and purposes of this title, including 
compliance with all applicable Federal and State laws, 
regulations, ordinances, and Executive orders. 
(B) DEFINITIONS.—In this paragraph, the terms ‘‘execu-
tive officer’’, ‘‘director’’, ‘‘principal shareholder’’, ‘‘immediate 
family’’, and ‘‘related interest’’ refer to the same relation-
ship to a financial institution lender as the relationship 
described in part 215 of title 12 of the Code of Federal 
Regulations, or any successor to such part. 
(8) CAPITAL ACCESS FOR SMALL BUSINESSES IN UNDERSERVED 
COMMUNITIES.—At the time that a State applies to the Sec-
retary to have the State capital access program approved as 
eligible for Federal contributions, the State shall deliver to 
the Secretary a report stating how the State plans to use 
the Federal contributions to the reserve fund to provide access 
to capital for small businesses in low- and moderate-income, 
minority, and other underserved communities, including 
women- and minority-owned small businesses. 
SEC. 3006. APPROVING COLLATERAL SUPPORT AND OTHER INNOVA-
TIVE CREDIT ACCESS AND GUARANTEE INITIATIVES FOR 
SMALL BUSINESSES AND MANUFACTURERS. 
(a) APPLICATION.—A participating State that establishes a new, 
or has an existing, credit support program that meets the eligibility 
criteria in subsection (c) may apply to the Secretary to have the 
State other credit support program approved as eligible for Federal 
contributions to, or for the account of, the State program. 
(b) APPROVAL.—The Secretary shall approve such State other 
credit support program as eligible for Federal contributions to, 
or for the account of, the program if— 
(1) the Secretary determines that the State satisfies the 
requirements of paragraphs (1) through (3) of section 3005(b); 
(2) the Secretary determines that the State other credit 
support program meets the eligibility criteria in subsection 
(c); 
(3) the Secretary determines the State other credit support 
program to be eligible based on the additional considerations 
in subsection (d); and 
(4) within 9 months after the date of enactment of this 
Act, the State has filed with Treasury a complete application 
for Treasury approval.
H. R. 5297—75 
(c) ELIGIBILITY CRITERIA FOR STATE OTHER CREDIT SUPPORT 
PROGRAMS.—For a State other credit support program to be 
approved under this section, that program shall be required to 
be a program of the State that— 
(1) can demonstrate that, at a minimum, $1 of public 
investment by the State program will cause and result in 
$1 of new private credit; 
(2) can demonstrate a reasonable expectation that, when 
considered with all other State programs of the State, such 
State programs together have the ability to use amounts of 
new Federal contributions to, or for the account of, all such 
programs in the State to cause and result in amounts of new 
small business lending at least 10 times the new Federal con-
tribution amount; 
(3) for those State other credit support programs that pro-
vide their credit support through 1 or more financial institution 
lenders, requires the financial institution lenders to have a 
meaningful amount of their own capital resources at risk in 
their small business lending; and 
(4) uses Federal funds allocated under this title to extend 
credit support that— 
(A) targets an average borrower size of 500 employees 
or less; 
(B) does not extend credit support to borrowers that 
have more than 750 employees; 
(C) targets support towards loans with an average 
principal amount of $5,000,000 or less; and 
(D) does not extend credit support to loans that exceed 
a principal amount of $20,000,000. 
(d) ADDITIONAL CONSIDERATIONS.—In making a determination 
that a State other credit support program is eligible for Federal 
contributions to, or for the account of, the State program, the 
Secretary shall take into account the following additional consider-
ations: 
(1) The anticipated benefits to the State, its businesses, 
and its residents to be derived from the Federal contributions 
to, or for the account of, the approved State other credit support 
program, including the extent to which resulting small business 
lending will expand economic opportunities. 
(2) The operational capacity, skills, and experience of the 
management team of the State other credit support program. 
(3) The capacity of the State other credit support program 
to manage increases in the volume of its small business lending. 
(4) The internal accounting and administrative controls 
systems of the State other credit support program, and the 
extent to which they can provide reasonable assurance that 
funds of the State program are safeguarded against waste, 
loss, unauthorized use, or misappropriation. 
(5) The soundness of the program design and implementa-
tion plan of the State other credit support program. 
(e) FEDERAL CONTRIBUTIONS TO APPROVED STATE OTHER CREDIT 
SUPPORT
PROGRAMS.—A State other credit support program 
approved under this section will be eligible for receiving Federal 
contributions to, or for the account of, the State program in an 
amount consistent with the schedule describing the apportionment 
of allocated Federal funds among State programs delivered by the 
State to the Secretary under the allocation agreement.
H. R. 5297—76 
(f) MINIMUM
PROGRAM
REQUIREMENTS
FOR
STATE
OTHER 
CREDIT SUPPORT PROGRAMS.— 
(1) FUND TO PRESCRIBE.—The Secretary shall, by regulation 
or other guidance, prescribe Program requirements for approved 
State other credit support programs. 
(2) CONSIDERATIONS FOR FUND.—In prescribing minimum 
Program requirements for approved State other credit support 
programs, the Secretary shall take into consideration, to the 
extent the Secretary determines applicable and appropriate, 
the minimum Program requirements for approved State capital 
access programs in section 3005(e). 
SEC. 3007. REPORTS. 
(a) QUARTERLY USE-OF-FUNDS REPORT.— 
(1) IN GENERAL.—Not later than 30 days after the beginning 
of each calendar quarter, beginning after the first full calendar 
quarter to occur after the date the Secretary approves a State 
for participation, the participating State shall submit to the 
Secretary a report on the use of Federal funding by the partici-
pating State during the previous calendar quarter. 
(2) REPORT CONTENTS.—Each report under this subsection 
shall— 
(A) indicate the total amount of Federal funding used 
by the participating State; and 
(B) include a certification by the participating State 
that— 
(i) the information provided in accordance with 
subparagraph (A) is accurate; 
(ii) funds continue to be available and legally com-
mitted 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 Pro-
gram; and 
(iii) the participating State is implementing its 
approved State program or programs in accordance 
with this title and regulations issued under section 
3010. 
(b) ANNUAL REPORT.—Not later than March 31 of each year, 
beginning March 31, 2011, each participating State shall submit 
to the Secretary an annual report that shall include the following 
information: 
(1) The number of borrowers that received new loans origi-
nated under the approved State program or programs after 
the State program was approved as eligible for Federal con-
tributions. 
(2) The total amount of such new loans. 
(3) Breakdowns by industry type, loan size, annual sales, 
and number of employees of the borrowers that received such 
new loans. 
(4) The zip code of each borrower that received such a 
new loan. 
(5) Such other data as the Secretary, in the Secretary’s 
sole discretion, may require to carry out the purposes of the 
Program.
H. R. 5297—77 
(c) FORM.—The reports and data filed under subsections (a) 
and (b) shall be in such form as the Secretary, in the Secretary’s 
sole discretion, may require. 
(d) TERMINATION OF REPORTING REQUIREMENTS.—The require-
ment to submit reports under subsections (a) and (b) shall terminate 
for a participating State with the submission of the completed 
reports due on the first March 31 to occur after 5 complete 12- 
month periods after the State is approved by the Secretary to 
be a participating State. 
SEC. 3008. REMEDIES FOR STATE PROGRAM TERMINATION OR FAIL-
URES. 
(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 participa-
tion in the Program; 
(B) failure on the part of a participating State to submit 
complete reports under section 3007 on a timely basis; 
or 
(C) noncompliance by the State with the terms of the 
allocation agreement between the Secretary and the State. 
(b) DEALLOCATED AMOUNTS TO BE REALLOCATED.—If, after 13 
months, any portion of the amount of Federal funds allocated to 
a participating State is deemed by the Secretary to be no longer 
allocated to the State after actions taken by the Secretary under 
subsection (a)(1), the Secretary shall reallocate that portion among 
the participating States, excluding the State whose allocated funds 
were deemed to be no longer allocated, as provided in section 
3003(b). 
SEC. 3009. IMPLEMENTATION AND ADMINISTRATION. 
(a) GENERAL AUTHORITIES AND DUTIES.—The Secretary shall— 
(1) consult with the Administrator of the Small Business 
Administration and the appropriate Federal banking agencies 
on the administration of the Program; 
(2) establish minimum national standards for approved 
State programs; 
(3) provide technical assistance to States for starting State 
programs and generally disseminate best practices; 
(4) manage, administer, and perform necessary program 
integrity functions for the Program; and 
(5) ensure adequate oversight of the approved State pro-
grams, including oversight of the cash flows, performance, and 
compliance of each approved State program. 
(b) APPROPRIATIONS.—There is hereby appropriated to the Sec-
retary, out of funds in the Treasury not otherwise appropriated, 
$1,500,000,000 to carry out the Program, including to pay reason-
able costs of administering the Program.
H. R. 5297—78 
(c) TERMINATION
OF SECRETARY’S PROGRAM ADMINISTRATION 
FUNCTIONS.—The authorities and duties of the Secretary to imple-
ment and administer the Program shall terminate at the end of 
the 7-year period beginning on the date of enactment of this Act. 
(d) EXPEDITED CONTRACTING.—During the 1-year period begin-
ning on the date of enactment of this Act, the Secretary may 
enter into contracts without regard to any other provision of law 
regarding public contracts, for purposes of carrying out this title. 
SEC. 3010. REGULATIONS. 
The Secretary, in consultation with the Administrator of the 
Small Business Administration, shall issue such regulations and 
other guidance as the Secretary determines necessary or appro-
priate to implement this title including to define terms, to establish 
compliance and reporting requirements, and such other terms and 
conditions necessary to carry out the purposes of this title. 
SEC. 3011. OVERSIGHT AND AUDITS. 
(a) INSPECTOR GENERAL OVERSIGHT.—The Inspector General 
of the Department of the Treasury shall conduct, supervise, and 
coordinate audits and investigations of the use of funds made avail-
able under the Program. 
(b) GAO AUDIT.—The Comptroller General of the United States 
shall perform an annual audit of the Program and issue a report 
to the appropriate committees of Congress containing the results 
of such audit. 
(c) REQUIRED CERTIFICATION.— 
(1) FINANCIAL INSTITUTIONS CERTIFICATION.—With respect 
to funds received by a participating State under the Program, 
any financial institution that receives a loan, a loan guarantee, 
or other financial assistance using such funds after the date 
of the enactment of this Act shall certify that such institution 
is in compliance with the requirements of section 103.121 of 
title 31, Code of Federal Regulations, a regulation that, at 
a minimum, requires financial institutions, as that term is 
defined in section 5312 (a)(2) and (c)(1)(A) of title 31, United 
States Code, to implement reasonable procedures to verify the 
identity of any person seeking to open an account, to the 
extent reasonable and practicable, maintain records of the 
information used to verify the person’s identity, and determine 
whether the person appears on any lists of known or suspected 
terrorists or terrorist organizations provided to the financial 
institution by any government agency. 
(2) SEX OFFENSE CERTIFICATION.—With respect to funds 
received by a participating State under the Program, any pri-
vate entity that receives a loan, a loan guarantee, or other 
financial assistance using such funds after the date of the 
enactment of this Act shall certify to the participating State 
that the principals of such entity have not been convicted 
of a sex offense against a minor (as such terms are defined 
in section 111 of the Sex Offender Registration and Notification 
Act (42 U.S.C. 16911)). 
(d) PROHIBITION ON PORNOGRAPHY.—None of the funds made 
available under this title may be used to pay the salary of any 
individual engaged in activities related to the Program who has 
been officially disciplined for violations of subpart G of the Stand-
ards of Ethical Conduct for Employees of the Executive Branch 
for viewing, downloading, or exchanging pornography, including
H. R. 5297—79 
child pornography, on a Federal Government computer or while 
performing official Federal Government duties. 
TITLE IV—ADDITIONAL SMALL 
BUSINESS PROVISIONS 
Subtitle A—Small Business Lending Fund 
SEC. 4101. PURPOSE. 
The purpose of this subtitle is to address the ongoing effects 
of the financial crisis on small businesses by providing temporary 
authority to the Secretary of the Treasury to make capital invest-
ments in eligible institutions in order to increase the availability 
of credit for small businesses. 
SEC. 4102. DEFINITIONS. 
For purposes of this subtitle: 
(1) APPROPRIATE
COMMITTEES
OF
CONGRESS.—The term 
‘‘appropriate committees of Congress’’ means— 
(A) 
the 
Committee 
on 
Small 
Business 
and 
Entrepreneurship, the Committee on Agriculture, Nutri-
tion, and Forestry, the Committee on Banking, Housing, 
and Urban Affairs, the Committee on Finance, the Com-
mittee on the Budget, and the Committee on Appropria-
tions of the Senate; and 
(B) the Committee on Small Business, the Committee 
on Agriculture, the Committee on Financial Services, the 
Committee on Ways and Means, the Committee on the 
Budget, and the Committee on Appropriations of the House 
of Representatives. 
(2) APPROPRIATE
FEDERAL
BANKING
AGENCY.—The term 
‘‘appropriate Federal banking agency’’ has the meaning given 
such term under section 3(q) of the Federal Deposit Insurance 
Act (12 U.S.C. 1813(q)). 
(3) BANK HOLDING COMPANY.—The term ‘‘bank holding com-
pany’’ has the meaning given such term under section 2(a)(1) 
of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(2)(a)(1)). 
(4) CALL REPORT.—The term ‘‘call report’’ means— 
(A) reports of Condition and Income submitted to the 
Office of the Comptroller of the Currency, the Board of 
Governors of the Federal Reserve System, and the Federal 
Deposit Insurance Corporation; 
(B) the Office of Thrift Supervision Thrift Financial 
Report; 
(C) any report that is designated by the Office of the 
Comptroller of the Currency, the Board of Governors of 
the Federal Reserve System, the Federal Deposit Insurance 
Corporation, or the Office of Thrift Supervision, as 
applicable, as a successor to any report referred to in 
subparagraph (A) or (B); 
(D) reports of Condition and Income as designated 
through guidance developed by the Secretary, in consulta-
tion with the Director of the Community Development 
Financial Institutions Fund; and
H. R. 5297—80 
(E) with respect to an eligible institution for which 
no report exists that is described under subparagraph (A), 
(B), (C), or (D), such other report or set of information 
as the Secretary, in consultation with the Administrator 
of the Small Business Administration, may prescribe. 
(5) CDCI.—The term ‘‘CDCI’’ means the Community 
Development Capital Initiative created by the Secretary under 
the Troubled Asset Relief Program established by the Emer-
gency Economic Stabilization Act of 2008. 
(6) CDCI INVESTMENT.—The term ‘‘CDCI investment’’ 
means, with respect to any eligible institution, the principal 
amount of any investment made by the Secretary in such 
eligible institution under the CDCI that has not been repaid. 
(7) CDFI; COMMUNITY DEVELOPMENT FINANCIAL INSTITU-
TION.—The terms ‘‘CDFI’’ and ‘‘community development finan-
cial institution’’ have the meaning given the term ‘‘community 
development financial institution’’ under the Riegle Community 
Development and Regulatory Improvement Act of 1994. 
(8) CDLF; COMMUNITY
DEVELOPMENT
LOAN
FUND.—The 
terms ‘‘CDLF’’ and ‘‘community development loan fund’’ mean 
any entity that— 
(A) is certified by the Department of the Treasury 
as a community development financial institution loan 
fund; 
(B) is exempt from taxation under the Internal Rev-
enue Code of 1986; and 
(C) had assets less than or equal to $10,000,000,000 
as of the end of the fourth quarter of calendar year 2009. 
(9) CPP.—The term ‘‘CPP’’ means the Capital Purchase 
Program created by the Secretary under the Troubled Asset 
Relief Program established by the Emergency Economic Sta-
bilization Act of 2008. 
(10) CPP 
INVESTMENT.—The term ‘‘CPP investment’’ 
means, with respect to any eligible institution, the principal 
amount of any investment made by the Secretary in such 
eligible institution under the CPP that has not been repaid. 
(11) ELIGIBLE INSTITUTION.—The term ‘‘eligible institution’’ 
means— 
(A) any insured depository institution, which— 
(i) is not controlled by a bank holding company 
or savings and loan holding company that is also an 
eligible institution; 
(ii) has total assets of equal to or less than 
$10,000,000,000, as reported in the call report of the 
insured depository institution as of the end of the 
fourth quarter of calendar year 2009; and 
(iii) is not directly or indirectly controlled by any 
company or other entity that has total consolidated 
assets of more than $10,000,000,000, as so reported; 
(B) any bank holding company which has total consoli-
dated assets of equal to or less than $10,000,000,000, as 
reported in the call report of the bank holding company 
as of the end of the fourth quarter of calendar year 2009; 
(C) any savings and loan holding company which has 
total consolidated assets of equal to or less than 
$10,000,000,000, as reported in the call report of the
H. R. 5297—81 
savings and loan holding company as of the end of the 
fourth quarter of calendar year 2009; and 
(D) any community development financial institution 
loan fund which has total assets of equal to or less than 
$10,000,000,000, as reported in audited financial state-
ments for the fiscal year of the community development 
financial institution loan fund that ends in calendar year 
2009. 
(12) FUND.—The term ‘‘Fund’’ means the Small Business 
Lending Fund established under section 4103(a)(1). 
(13) INSURED DEPOSITORY INSTITUTION.—The term ‘‘insured 
depository institution’’ has the meaning given such term under 
section 3(c)(2) of the Federal Deposit Insurance Act (12 U.S.C. 
1813(c)(2)). 
(14) MINORITY-OWNED AND WOMEN-OWNED BUSINESS.—The 
terms ‘‘minority-owned business’’ and ‘‘women-owned business’’ 
shall have the meaning given the terms ‘‘minority-owned busi-
ness’’ and ‘‘women’s business’’, respectively, under section 
21A(r)(4) of the Federal Home Loan Bank Act (12 U.S.C. 
1441A(r)(4)). 
(15) PROGRAM.—The term ‘‘Program’’ means the Small 
Business Lending Fund Program authorized under section 
4103(a)(2). 
(16) SAVINGS
AND
LOAN
HOLDING
COMPANY.—The term 
‘‘savings and loan holding company’’ has the meaning given 
such term under section 10(a)(1)(D) of the Home Owners’ Loan 
Act (12 U.S.C. 1467a(a)(1)(D)). 
(17) SECRETARY.—The term ‘‘Secretary’’ means the Sec-
retary of the Treasury. 
(18) SMALL BUSINESS LENDING.— 
(A) IN GENERAL.—The term ‘‘small business lending’’ 
means lending, as defined by and reported in an eligible 
institutions’ quarterly call report, where each loan com-
prising such lending is one of the following types: 
(i) Commercial and industrial loans. 
(ii) Owner-occupied nonfarm, nonresidential real 
estate loans. 
(iii) Loans to finance agricultural production and 
other loans to farmers. 
(iv) Loans secured by farmland. 
(B) EXCLUSION.—No loan that has an original amount 
greater than $10,000,000 or that goes to a business with 
more than $50,000,000 in revenues shall be included in 
the measure. 
(C) TREATMENT OF HOLDING COMPANIES.—In the case 
of eligible institutions that are bank holding companies 
or savings and loan holding companies having one or more 
insured depository institution subsidiaries, small business 
lending shall be measured based on the combined small 
business lending reported in the call report of the insured 
depository institution subsidiaries. 
(19) VETERAN-OWNED BUSINESS.— 
(A) The term ‘‘veteran-owned business’’ means a busi-
ness— 
(i) more than 50 percent of the ownership or control 
of which is held by 1 or more veterans;
H. R. 5297—82 
(ii) more than 50 percent of the net profit or loss 
of which accrues to 1 or more veterans; and 
(iii) a significant percentage of senior management 
positions of which are held by veterans. 
(B) For purposes of this paragraph, the term ‘‘veteran’’ 
has the meaning given such term in section 101(2) of 
title 38, United States Code. 
SEC. 4103. SMALL BUSINESS LENDING FUND. 
(a) FUND AND PROGRAM.— 
(1) FUND
ESTABLISHED.—There is established in the 
Treasury of the United States a fund to be known as the 
‘‘Small Business Lending Fund’’, which shall be administered 
by the Secretary. 
(2) PROGRAMS AUTHORIZED.—The Secretary is authorized 
to establish the Small Business Lending Fund Program for 
using the Fund consistent with this subtitle. 
(b) USE OF FUND.— 
(1) IN GENERAL.—Subject to paragraph (2), the Fund shall 
be available to the Secretary, without further appropriation 
or fiscal year limitation, for the costs of purchases (including 
commitments to purchase), and modifications of such purchases, 
of preferred stock and other financial instruments from eligible 
institutions on such terms and conditions as are determined 
by the Secretary in accordance with this subtitle. For purposes 
of this paragraph and with respect to an eligible institution, 
the term ‘‘other financial instruments’’ shall include only debt 
instruments for which such eligible institution is fully liable 
or equity equivalent capital of the eligible institution. Such 
debt instruments may be subordinated to the claims of other 
creditors of the eligible institution. 
(2) MAXIMUM PURCHASE LIMIT.—The aggregate amount of 
purchases (and commitments to purchase) made pursuant to 
paragraph (1) may not exceed $30,000,000,000. 
(3) PROCEEDS USED TO PAY DOWN PUBLIC DEBT.—All funds 
received by the Secretary in connection with purchases made 
pursuant to paragraph (1), including interest payments, divi-
dend payments, and proceeds from the sale of any financial 
instrument, shall be paid into the general fund of the Treasury 
for reduction of the public debt. 
(4) LIMITATION ON PURCHASES FROM CDLFS.— 
(A) IN GENERAL.—Not more than 1 percent of the max-
imum purchase limit of the Program, pursuant to para-
graph (2), may be used to make purchases from community 
development loan funds. 
(B) ELIGIBILITY
STANDARDS.—The Secretary, in con-
sultation with the Community Development Financial 
Institutions Fund, shall develop eligibility criteria to deter-
mine the financial ability of a CDLF to participate in 
the Program and repay the investment. Such criteria shall 
include the following: 
(i) Ratio of net assets to total assets is at least 
20 percent. 
(ii) Ratio of loan loss reserves to loans and leases 
90 days or more delinquent (including loans sold with 
full recourse) is at least 30 percent.
H. R. 5297—83 
(iii) Positive net income measured on a 3-year 
rolling average. 
(iv) Operating liquidity ratio of at least 1.0 for 
the 4 most recent quarters and for one or both of 
the two preceding years. 
(v) Ratio of loans and leases 90 days or more 
delinquent (including loans sold with full recourse) 
to total equity plus loan loss reserves is less than 
40 percent. 
(C) REQUIREMENT
TO
SUBMIT
AUDITED
FINANCIAL 
STATEMENTS.—CDLFs participating in the Program shall 
submit audited financial statements to the Secretary, have 
a clean audit opinion, and have at least 3 years of operating 
experience. 
(c) CREDITS
TO
THE FUND.—There shall be credited to the 
Fund amounts made available pursuant to section 4108, to the 
extent provided by appropriations Acts. 
(d) TERMS.— 
(1) APPLICATION.— 
(A) INSTITUTIONS
WITH
ASSETS
OF
$1,000,000,000
OR 
LESS.—Eligible institutions having total assets equal to 
or less than $1,000,000,000, as reported in a call report 
as of the end of the fourth quarter of calendar year 2009, 
may apply to receive a capital investment from the Fund 
in an amount not exceeding 5 percent of risk-weighted 
assets, as reported in the call report immediately preceding 
the date of application, less the amount of any CDCI invest-
ment and any CPP investment. 
(B) 
INSTITUTIONS
WITH
ASSETS
OF
MORE
THAN 
$1,000,000,000 AND LESS THAN OR EQUAL TO $10,000,000,000.— 
Eligible institutions having total assets of more than 
$1,000,000,000 but less than $10,000,000,000, as of the 
end of the fourth quarter of calendar year 2009, may apply 
to receive a capital investment from the Fund in an amount 
not exceeding 3 percent of risk-weighted assets, as reported 
in the call report immediately preceding the date of applica-
tion, less the amount of any CDCI investment and any 
CPP investment. 
(C) TREATMENT OF HOLDING COMPANIES.—In the case 
of an eligible institution that is a bank holding company 
or a savings and loan holding company having one or 
more insured depository institution subsidiaries, total 
assets shall be measured based on the combined total assets 
reported in the call report of the insured depository institu-
tion 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 assets of the 
insured depository institution subsidiaries as reported in 
the call report immediately preceding the date of applica-
tion. 
(D) TREATMENT OF APPLICANTS THAT ARE INSTITUTIONS 
CONTROLLED BY HOLDING COMPANIES.—If an eligible institu-
tion that applies to receive a capital investment under 
the Program is under the control of a bank holding company 
or a savings and loan holding company, then the Secretary 
may use the Fund to purchase preferred stock or other
H. R. 5297—84 
financial instruments from the top-tier bank holding com-
pany or savings and loan holding company of such eligible 
institution, as applicable. For purposes of this subpara-
graph, the term ‘‘control’’ with respect to a bank holding 
company shall have the same meaning as in section 2(a)(2) 
of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841(2)(a)(2)). For purposes of this subparagraph, the term 
‘‘control’’ with respect to a savings and loan holding com-
pany shall have the same meaning as in 10(a)(2) of the 
Home Owners’ Loan Act (12 U.S.C. 1467a(a)(2)). 
(E) REQUIREMENT
TO
PROVIDE
A
SMALL
BUSINESS 
LENDING
PLAN.—At the time that an applicant submits 
an application to the Secretary for a capital investment 
under the Program, the applicant shall deliver to the appro-
priate Federal banking agency, and, for applicants that 
are State-chartered banks, to the appropriate State banking 
regulator, a small business lending plan describing how 
the applicant’s business strategy and operating goals will 
allow it to address the needs of small businesses in the 
areas it serves, as well as a plan to provide linguistically 
and culturally appropriate outreach, where appropriate. 
In the case of eligible institutions that are community 
development loan funds, this plan shall be submitted to 
the Secretary. This plan shall be confidential supervisory 
information. 
(F) TREATMENT OF APPLICANTS THAT ARE COMMUNITY 
DEVELOPMENT LOAN FUNDS.—Eligible institutions that are 
community development loan funds may apply to receive 
a capital investment from the Fund in an amount not 
exceeding 5 percent of total assets, as reported in the 
audited financial statements for the fiscal year of the 
eligible institution that ends in calendar year 2009. 
(2) CONSULTATION
WITH
REGULATORS.—For each eligible 
institution that applies to receive a capital investment under 
the Program, the Secretary shall— 
(A) consult with the appropriate Federal banking 
agency or, in the case of an eligible institution that is 
a nondepository community development financial institu-
tion, the Community Development Financial Institution 
Fund, for the eligible institution, to determine whether 
the eligible institution may receive such capital investment; 
(B) in the case of an eligible institution that is a 
State-chartered bank, consider any views received from 
the State banking regulator of the State of the eligible 
institution regarding the financial condition of the eligible 
institution; and 
(C) in the case of a community development financial 
institution loan fund, consult with the Community Develop-
ment Financial Institution Fund. 
(3) CONSIDERATION OF MATCHED PRIVATE INVESTMENTS.— 
(A) IN
GENERAL.—For an eligible institution that 
applies to receive a capital investment under the Program, 
if the entity to be consulted under paragraph (2) would 
not otherwise recommend the eligible institution to receive 
the capital investment, the Secretary, in consultation with 
the entity to be so consulted, may consider whether the
H. R. 5297—85 
entity to be consulted would recommend the eligible institu-
tion to receive a capital investment based on the financial 
condition of the institution if the conditions in subpara-
graph (B) are satisfied. 
(B) 
CONDITIONS.—The 
conditions 
referred 
to 
in 
subparagraph (A) are as follows: 
(i) CAPITAL SOURCES.—The eligible institution shall 
receive capital both under the Program and from pri-
vate, nongovernment investors. 
(ii) AMOUNT OF CAPITAL.—The amount of capital 
to be received under the Program shall not exceed 
3 percent of risk-weighted assets, as reported in the 
call report immediately preceding the date of applica-
tion, less the amount of any CDCI investment and 
any CPP investment. 
(iii) TERMS.—The amount of capital to be received 
from private, nongovernment investors shall be— 
(I) equal to or greater than 100 percent of 
the capital to be received under the Program; and 
(II) subordinate to the capital investment 
made by the Secretary under the Program. 
(4) INELIGIBILITY OF INSTITUTIONS ON FDIC PROBLEM BANK 
LIST.— 
(A) IN
GENERAL.—An eligible institution may not 
receive any capital investment under the Program, if— 
(i) such institution is on the FDIC problem bank 
list; or 
(ii) such institution has been removed from the 
FDIC problem bank list for less than 90 days. 
(B) CONSTRUCTION.—Nothing in subparagraph (A) 
shall be construed as limiting the discretion of the Sec-
retary to deny the application of an eligible institution 
that is not on the FDIC problem bank list. 
(C) FDIC PROBLEM BANK LIST DEFINED.—For purposes 
of this paragraph, the term ‘‘FDIC problem bank list’’ 
means the list of depository institutions having a current 
rating of 4 or 5 under the Uniform Financial Institutions 
Rating System, or such other list designated by the Federal 
Deposit Insurance Corporation. 
(5) INCENTIVES TO LEND.— 
(A) REQUIREMENTS ON PREFERRED STOCK AND OTHER 
FINANCIAL
INSTRUMENTS.—Any preferred stock or other 
financial instrument issued to Treasury by an eligible 
institution receiving a capital investment under the Pro-
gram shall provide that— 
(i) the rate at which dividends or interest are 
payable shall be 5 percent per annum initially; 
(ii) within the first 2 years after the date of the 
capital investment under the Program, the rate may 
be adjusted based on the amount of an eligible institu-
tion’s small business lending. Changes in the amount 
of small business lending shall be measured against 
the average amount of small business lending reported 
by the eligible institution in its call reports for the 
4 full quarters immediately preceding the date of enact-
ment of this Act, minus adjustments from each quar-
terly balance in respect of—
H. R. 5297—86 
(I) net loan charge offs with respect to small 
business lending; and 
(II) gains realized by the eligible institution 
resulting from mergers, acquisitions or purchases 
of loans after origination and syndication; which 
adjustments shall be determined in accordance 
with guidance promulgated by the Secretary; and 
(iii) during any calendar quarter during the initial 
2-year period referred to in clause (ii), an institution’s 
rate shall be adjusted to reflect the following schedule, 
based on that institution’s change in the amount of 
small business lending relative to the baseline— 
(I) if the amount of small business lending 
has increased by less than 2.5 percent, the divi-
dend or interest rate shall be 5 percent; 
(II) if the amount of small business lending 
has increased by 2.5 percent or greater, but by 
less than 5.0 percent, the dividend or interest rate 
shall be 4 percent; 
(III) if the amount of small business lending 
has increased by 5.0 percent or greater, but by 
less than 7.5 percent, the dividend or interest rate 
shall be 3 percent; 
(IV) if the amount of small business lending 
has increased by 7.5 percent or greater, and but 
by less than 10.0 percent, the dividend or interest 
rate shall be 2 percent; or 
(V) if the amount of small business lending 
has increased by 10 percent or greater, the divi-
dend or interest rate shall be 1 percent. 
(B) BASIS OF INITIAL RATE.—The initial dividend or 
interest rate shall be based on call report data published 
in the quarter immediately preceding the date of the capital 
investment under the Program. 
(C) TIMING OF RATE ADJUSTMENTS.—Any rate adjust-
ment shall occur in the calendar quarter following the 
publication of call report data, such that the rate based 
on call report data from any one calendar quarter, which 
is published in the first following calendar quarter, shall 
be adjusted in that first following calendar quarter and 
payable in the second following quarter. 
(D) RATE
FOLLOWING
INITIAL
2-YEAR
PERIOD.—Gen-
erally, the rate based on call report data from the eighth 
calendar quarter after the date of the capital investment 
under the Program shall be payable until the expiration 
of the 41⁄2-year period that begins on the date of the invest-
ment. In the case where the amount of small business 
lending has remained the same or decreased relative to 
the institution’s baseline in the eighth quarter after the 
date of the capital investment under the Program, the 
rate shall be 7 percent until the expiration of the 41⁄2- 
year period that begins on the date of the investment. 
(E) RATE FOLLOWING INITIAL 41⁄2 -YEAR PERIOD.—The 
dividend or interest rate paid on any preferred stock or 
other financial instrument issued by an eligible institution 
that receives a capital investment under the Program shall 
increase to 9 percent at the end of the 41⁄2-year period
H. R. 5297—87 
that begins on the date of the capital investment under 
the Program. 
(F) LIMITATION
ON
RATE
REDUCTIONS
WITH
RESPECT 
TO CERTAIN AMOUNT.—The reduction in the dividend or 
interest rate payable to Treasury by any eligible institution 
shall be limited such that the rate reduction shall not 
apply to a dollar amount of the investment made by 
Treasury that is greater than the dollar amount increase 
in the amount of small business lending realized under 
this program. The Secretary may issue guidelines that 
will apply to new capital investments limiting the amount 
of capital available to eligible institutions consistent with 
this limitation. 
(G) RATE ADJUSTMENTS FOR S CORPORATION.—Before 
making a capital investment in an eligible institution that 
is an S corporation or a corporation organized on a mutual 
basis, the Secretary may adjust the dividend or interest 
rate on the financial instrument to be issued to the Sec-
retary, from the dividend or interest rate that would apply 
under subparagraphs (A) through (F), to take into account 
any differential tax treatment of securities issued by such 
eligible institution. For purpose of this subparagraph, the 
term ‘‘S corporation’’ has the same meaning as in section 
1361(a) of the Internal Revenue Code of 1986. 
(H) REPAYMENT
DEADLINE.—The capital investment 
received by an eligible institution under the Program shall 
be evidenced by preferred stock or other financial 
instrument that— 
(i) includes, as a term and condition, that the 
capital investment will— 
(I) be repaid not later than the end of the 
10-year period beginning on the date of the capital 
investment under the Program; or 
(II) at the end of such 10-year period, be sub-
ject to such additional terms as the Secretary shall 
prescribe, which shall include a requirement that 
the stock or instrument shall carry the highest 
dividend or interest rate payable; and 
(ii) provides that the term and condition described 
under clause (i) shall not apply if the application of 
that term and condition would adversely affect the 
capital treatment of the stock or financial instrument 
under current or successor applicable capital provisions 
compared to a capital instrument with identical terms 
other than the term and condition described under 
clause (i). 
(I) REQUIREMENTS ON FINANCIAL INSTRUMENTS ISSUED 
BY
A
COMMUNITY
DEVELOPMENT
FINANCIAL
INSTITUTION 
LOAN FUND.—Any equity equivalent capital issued to the 
Treasury by a community development loan fund receiving 
a capital investment under the Program shall provide that 
the rate at which interest is payable shall be 2 percent 
per annum for 8 years. After 8 years, the rate at which 
interest is payable shall be 9 percent.
H. R. 5297—88 
(6) ADDITIONAL INCENTIVES TO REPAY.—The Secretary may, 
by regulation or guidance issued under section 4104(9), estab-
lish repayment incentives in addition to the incentive in para-
graph (5)(E) that will apply to new capital investments in 
a manner that the Secretary determines to be consistent with 
the purposes of this subtitle. 
(7) CAPITAL PURCHASE PROGRAM REFINANCE.— 
(A) IN GENERAL.—The Secretary shall, in a manner 
that the Secretary determines to be consistent with the 
purposes of this subtitle, issue regulations and other guid-
ance to permit eligible institutions to refinance securities 
issued to Treasury under the CDCI and the CPP for securi-
ties to be issued under the Program. 
(B) PROHIBITION ON PARTICIPATION BY NON-PAYING CPP 
PARTICIPANTS.—Subparagraph (A) shall not apply to any 
eligible institution that has missed more than one dividend 
payment due under the CPP. For purposes of this subpara-
graph, a CPP dividend payment that is submitted within 
60 days of the due date of such payment shall not be 
considered a missed dividend payment. 
(8) OUTREACH TO MINORITIES, WOMEN, AND VETERANS.— 
The Secretary shall require eligible institutions receiving cap-
ital investments under the Program to provide linguistically 
and culturally appropriate outreach and advertising in the 
applicant pool describing the availability and application 
process of receiving loans from the eligible institution that 
are made possible by the Program through the use of print, 
radio, television or electronic media outlets which target 
organizations, trade associations, and individuals that— 
(A) represent or work within or are members of 
minority communities; 
(B) represent or work with or are women; and 
(C) represent or work with or are veterans. 
(9) ADDITIONAL TERMS.—The Secretary may, by regulation 
or guidance issued under section 4104(9), make modifications 
that will apply to new capital investments in order to manage 
risks associated with the administration of the Fund in a 
manner consistent with the purposes of this subtitle. 
(10) MINIMUM
UNDERWRITING
STANDARDS.—The appro-
priate Federal banking agency for an eligible institution that 
receives funds under the Program shall within 60 days issue 
guidance regarding prudent underwriting standards that must 
be used for loans made by the eligible institution using such 
funds. 
SEC. 4104. ADDITIONAL AUTHORITIES OF THE SECRETARY. 
The Secretary may take such actions as the Secretary deems 
necessary to carry out the authorities in this subtitle, including, 
without limitation, the following: 
(1) The Secretary may use the services of any agency 
or instrumentality of the United States or component thereof 
on a reimbursable basis, and any such agency or instrumen-
tality or component thereof is authorized to provide services 
as requested by the Secretary using all authorities vested in 
or delegated to that agency, instrumentality, or component.
H. R. 5297—89 
(2) The Secretary may enter into contracts, including con-
tracts for services authorized by section 3109 of title 5, United 
States Code. 
(3) The Secretary may designate any bank, savings associa-
tion, trust company, security broker or dealer, asset manager, 
or investment adviser as a financial agent of the Federal 
Government and such institution shall perform all such reason-
able duties related to this subtitle as financial agent of the 
Federal Government as may be required. The Secretary shall 
have authority to amend existing agreements with financial 
agents, entered into during the 2-year period before the date 
of enactment of this Act, to perform reasonable duties related 
to this subtitle. 
(4) The Secretary may exercise any rights received in 
connection with any preferred stock or other financial 
instruments or assets purchased or acquired pursuant to the 
authorities granted under this subtitle. 
(5) Subject to section 4103(b)(3), the Secretary may manage 
any assets purchased under this subtitle, including revenues 
and portfolio risks therefrom. 
(6) The Secretary may sell, dispose of, transfer, exchange 
or enter into securities loans, repurchase transactions, or other 
financial transactions in regard to, any preferred stock or other 
financial instrument or asset purchased or acquired under this 
subtitle, upon terms and conditions and at a price determined 
by the Secretary. 
(7) The Secretary may manage or prohibit conflicts of 
interest that may arise in connection with the administration 
and execution of the authorities provided under this subtitle. 
(8) The Secretary may establish and use vehicles, subject 
to supervision by the Secretary, to purchase, hold, and sell 
preferred stock or other financial instruments and issue obliga-
tions. 
(9) The Secretary may, in consultation with the Adminis-
trator of the Small Business Administration, issue such regula-
tions and other guidance as may be necessary or appropriate 
to define terms or carry out the authorities or purposes of 
this subtitle. 
SEC. 4105. CONSIDERATIONS. 
In exercising the authorities granted in this subtitle, the Sec-
retary shall take into consideration— 
(1) increasing the availability of credit for small businesses; 
(2) providing funding to minority-owned eligible institutions 
and other eligible institutions that serve small businesses that 
are minority-, veteran-, and women-owned and that also serve 
low- and moderate-income, minority, and other underserved 
or rural communities; 
(3) protecting and increasing American jobs; 
(4) increasing the opportunity for small business develop-
ment in areas with high unemployment rates that exceed the 
national average; 
(5) ensuring that all eligible institutions may apply to 
participate in the program established under this subtitle, with-
out discrimination based on geography; 
(6) providing transparency with respect to use of funds 
provided under this subtitle;
H. R. 5297—90 
(7) minimizing the cost to taxpayers of exercising the 
authorities; 
(8) promoting and engaging in financial education to 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 Deepwater Horizon and small businesses in communities 
that have suffered negative economic effects as a result of 
that discharge with particular consideration to States along 
the coast of the Gulf of Mexico. 
SEC. 4106. REPORTS. 
The Secretary shall provide to the appropriate committees of 
Congress— 
(1) within 7 days of the end of each month commencing 
with the first month in which transactions are made under 
the Program, a written report describing all of the transactions 
made during the reporting period pursuant to the authorities 
granted under this subtitle; 
(2) after the end of March and the end of September, 
commencing September 30, 2010, a written report on all pro-
jected costs and liabilities, all operating expenses, including 
compensation for financial agents, and all transactions made 
by the Fund, which shall include participating institutions and 
amounts each institution has received under the Program; and 
(3) within 7 days of the end of each calendar quarter 
commencing with the first calendar quarter in which trans-
actions are made under the Program, a written report detailing 
how eligible institutions participating in the Program have 
used the funds such institutions received under the Program. 
SEC. 4107. OVERSIGHT AND AUDITS. 
(a) INSPECTOR GENERAL OVERSIGHT.—The Inspector General 
of the Department of the Treasury shall conduct, supervise, and 
coordinate audits and investigations of the Program through the 
Office of Small Business Lending Fund Program Oversight estab-
lished under subsection (b). 
(b) OFFICE OF SMALL BUSINESS LENDING FUND PROGRAM OVER-
SIGHT.— 
(1) ESTABLISHMENT.—There is hereby established within 
the Office of the Inspector General of the Department of the 
Treasury a new office to be named the ‘‘Office of Small Business 
Lending Fund Program Oversight’’ to provide oversight of the 
Program. 
(2) LEADERSHIP.—The Inspector General shall appoint a 
Special Deputy Inspector General for SBLF Program Oversight 
to lead the Office, with commensurate staff, who shall report 
directly to the Inspector General and who shall be responsible 
for the performance of all auditing and investigative activities 
relating to the Program. 
(3) REPORTING.— 
(A) IN GENERAL.—The Inspector General shall issue 
a report no less than two times a year to the Congress 
and the Secretary devoted to the oversight provided by 
the Office, including any recommendations for improve-
ments to the Program.
H. R. 5297—101 
Congressional Record by the Chairman of the Senate Budget Com-
mittee, provided that such statement has been submitted prior 
to the vote on passage. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.